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Virtual influencers now regulated by the FTC

Technology for Lawyers

Published: September 1, 2023

Virtual, AI-generated influencers can have millions of followers but they have been generally unregulated. Until now.
To review, an “influencer” is, according to the Cambridge English Dictionary, a “person who is paid by a company to show and describe its products and services on social media, encouraging other people to buy them.”
Obviously, the Federal Trade Commission regulates influencers as advertisers. If, you know, they’re human. But if they’re robots?
Several AI-generated “influencers” have millions of followers on TikTok and other social media platforms.
To this point, they have enjoyed an Internet 1.0-type of freedom from regulation. But that just ended, at least in the U.S. (most AI-generated influencers are not based here).
The Federal Trade Commission dropped a hammer on AI-generated influencers, holding them to the same endorsement standards as their flesh and blood counterparts.
In its new, updated endorsement guides and related commentary clarifies that any influencer regs also apply to virtual influencers, and that when these strange AI things are endorsing products they have to follow the regular endorser rules.
So now, when an AI-generated influencer makes statements about a product that is not clearly an advertisement, that statement must follow the endorser rules.
Virtual influencers come in all shapes and sizes—they may be fronting brands (like a virtual Barbie), or they may have become brands themselves like numerous South Korean and Japanese virtuals (think: Max Headroom).
The virtuals are bound now to rules that include: Avoiding making direct statements or implying that the virtual influencer had its own personal experience with the product (cause it can’t have experiences); use whatever hashtags, but make sure that they reflect the advertiser’s name; don’t use hashtags that imply that the virtual is a human (faking a so-called “material attribute” of the influencer) and comply with ongoing guidance from the brand (don’t go rogue).
The FTC is a little late to this game.
India already regulated virtual influencers, for instance.
And platforms are jumping into the game, as well. TikTok itself threw some rules down around artificial beings pretending to be real.
So we haven’t quite been replaced yet. Or have we?
Thanks to InfoLaw Group via Lexology for the heads up.