By: Helen Vu,

Those familiar with the social media world may recall the disaster that was the inaugural Fyre Festival. The music festival was slated to take place during a weekend in April 2017 on the island of Great Exuma, in the Bahamas.[1] Organized by an entrepreneur named Billy McFarlane, Fyre Festival was framed as “Coachella in the Caribbean”[2] and was promoted almost exclusively through social media platforms such as Instagram, Facebook, and Twitter.[3] Organizers paid celebrities and social media influencers, such as Jeffrey “Ja Rule” Atkins, Bella Hadid, and Kendall Jenner, to upload posts promoting the event onto their Instagram accounts.[4] These influencers, who have millions of followers, convinced their fans to hand over thousands of dollars for tickets to a lavish music festival on a tropical island.[5]

Unfortunately, the event turned into more of a dumpster fire than a Fyre Festival. The organizers were woefully unprepared for the actual event, had barely anything set up, and cancelled the festival as people were boarding planes from Miami to the Bahamas.[6] A large group of individuals received the news too late and ended up stuck on an island with not enough departing flights.[7] These unlucky attendees had to wait a day to find a flight back to the United States.[8] Meanwhile, instead of staying in the beachside villas promised, they had to find shelter in half-built tents.[9] At mealtime, organizers handed festivalgoers cheese sandwiches rather than the world-class cuisine they paid for.[10] Social media lit up with discussions of how the Fyre Festival had turned into such a nightmare and how the organizers had known for at least a month that there was no feasible way that the event could occur.[11] Eventually the failed festival became old news but as the furor died down, legal consequences for the festival organizers and promoters began rolling in.[12]

Several individuals brought class action lawsuits on behalf of other festivalgoers, alleging fraud, breach of contract, and negligent misrepresentation.[13] While these complaints all name the main organizer, Mr. McFarlane, as a defendant, it is noteworthy that some of the claimants attempt to hold the influencers who promoted the Fyre Festival accountable as well.[14] A suit filed in the United States District Court for the Central District of California included claims against 50 unnamed individuals, alleging that these defendants made misrepresentations to their followers to induce them into purchasing tickets to the event.[15] Another suit was brought in the Los Angeles County Superior Court against 100 unnamed individuals, claiming false and misleading advertising.[16] It is unclear whether the Fyre Festival ticketholders have a valid claim against the promoters who advertised the event on their social media accounts. After all, attendees purchased their tickets from the organizers rather than the promoters. In addition, these celebrities likely did not have much more knowledge of the event than the attendees did. They merely posted promotional content with a tap of a finger in exchange for compensation.

As social media developed and its use grew exponentially, users who had extremely high numbers of followers found a way to take advantage of the influence they had over so many individuals. Brands and companies commonly pay popular users to post material on their social media accounts promoting goods and services. These sponsored posts are often couched as recommendations from the influencer to her followers rather than as outright advertisements. Thus, users view these sponsored posts as more authentic than regular ads posted by the companies themselves.[17] As this business-savvy practice grows, steps should be taken to ensure that these promoters post truthful material or, at the least, do diligent research on the products they advertise. The companies who pay for these posts have regulations they must follow themselves when they advertise directly to consumers.[18] Instagram influencers should have similar regulations as well. Otherwise, little stops them from posting false advertising for the company that pays the most.

The Federal Trade Commission (“FTC”) is a federal agency that protects consumers from unfair, deceptive, and fraudulent practices in the marketplace by regulating advertising and marketing.[19] While the bulk of the work that the FTC does involves traditional methods of advertising, it has gotten more involved with social media marketing as online influencers play an increasingly larger role in promoting products and services. The FTC recently sent more than 90 letters to influencers and online marketers reminding them that they are required to disclose to their followers which social media posts they are being paid to upload as a promotion or endorsement.[20] This signals a shift from holding only the brands responsible for advertising violations to making the influencers accountable as well.[21]

While the Fyre Festival is arguably the most well known social media marketing failure, it is only a part of the bigger picture involving promotional posts, influencers, and fraud. Internet users will find more and more innovative ways of using social media not just to connect with friends but also to make money. How will we ensure that those making financial gains off an inherently untrustworthy medium are held responsible for their actions? Does the FTC have the power to strictly regulate anyone who gets compensated for his or her posts, even if the posts are on a forum for self-expression? Influencer marketing fraud is a growing area of concern not just for the consumers who may fall prey to deceptive advertising, but for the influencers who may be held liable for their sponsored posts as well.[22]

 

[1] See Bryan Burrough, Fyre Festival: Anatomy of a Millennial Marketing Fiasco Waiting to Happen.  Vanity Fair, Aug. 2017, https://www.vanityfair.com/news/2017/06/fyre-festival-billy-mcfarland-millennial-marketing-fiasco.

[2] Id.

[3] See id.

[4] See id.  

[5] See id.

[6] See id.

[7] See Burrough, supra note 1. 

[8] See id.

[9] Jung v. McFarland, No. 2:17-cv-03245 (D. Cal. filed Apr. 30, 2017).

[10] See id. 

[11] Burrough, supra note 1.

[12] See Jeff John Roberts, Celebrity Influencers Face Moment of Truth in Fyre Festival Lawsuit, Fortune (May 7, 2017), http://fortune.com/2017/05/07/fyre-festival-lawsuit/.

[13] See The Fyre Festival is Facing 9 Lawsuits, FBI Investigation, Organizer Arrested, The Fashion Law (July 3, 2017), http://www.thefashionlaw.com/home/a-list-of-all-of-the-fyre-festival-lawsuits-that-have-been-filed-so-far.

[14] See id.

[15] See Jung, No. 2:17-cv-03245.

[16] See Chinery v. Fyre Media, Inc., No. BC659938 (Super. Ct. Cal. filed May 2, 2017).

[17] See Shareen Pathak, Cheatsheet: what you need to know about influencer fraud, Digiday (Nov. 3, 2017), https://digiday.com/marketing/cheatsheet-need-know-influencer-fraud/.

[18] Federal Trade Commission, Advertising and Marketing on the Internet (Sept. 2009), https://www.ftc.gov/system/files/documents/plain-language/bus28-advertising-and-marketing-internet-rules-road.pdf.

[19] Federal Trade Commission, What We Do, https://www.ftc.gov/about-ftc/what-we-do (last visited Nov. 21, 2017).

[20] Federal Trade Commission, FTC Staff Reminds Influencers and Brands to Clearly Disclose Relationship (Apr. 19, 2017), https://www.ftc.gov/news-events/press-releases/2017/04/ftc-staff-reminds-influencers-brands-clearly-disclose.

[21] Roberts, supra note 12.

[22] See id.

Image Source: http://www.iamwire.com/2016/05/influencer-marketing-strategy/135280.

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