Following a public comment period, the Federal Trade Commission has approved a final consent order with national retailer Lord & Taylor, prohibiting it from failing to properly disclose paid native advertising and online endorsements for its products.
According to the FTC’s complaint, issued against the company in March 2016, Lord & Taylor deceived consumers by placing a seemingly objective “news” article in the online publication Nylon and creating a Nylon Instagram post, without disclosing that the placements actually were paid native advertisements for the company’s 2015 new Design Lab clothing collection.
The Commission’s complaint also charged that as part of the Design Lab rollout, the company paid 50 online fashion “influencers” to post Instagram pictures of themselves wearing a paisley dress from the new collection, but failed to disclose they had given each influencer the dress, as well as thousands of dollars, in exchange for their endorsement.
The consent order prohibits Lord & Taylor from misrepresenting that paid ads are from an independent source or that an endorser is an independent or ordinary consumer. In addition, the company must ensure that its endorsers clearly disclose when they have been compensated in exchange for their endorsements.
The Commission vote approving the final order and responses to the public commenters was 3-0. (FTC File No. 152-3181; the staff contact is Robin Rosen Spector, Bureau of Consumer Protection, 202-326-3740.)