FTC eyes social-media ads with perks

On May 30, the Federal Trade Commission holds a workshop that will look at how companies should disclose incentives on social-media "platforms that allow only short messages or a simple sign of approval," says FTC advertising practices chief Mary Engle.

Incentives for consumers to "like" companies on Facebook fall into a "gray area" that depends on whether the number of likes a company has influences consumers in choosing their products, Engle says. The FTC's advertising endorsement guidelines require compensation to be disclosed, as with Twitter hashtags such as "#paid," she says. The National Consumers League's Sally Greenberg, who is testifying at the FTC workshop, says consumers on social media need the same protections as with traditional advertising. Consumers need to be protected "from false and deceptive advertising" in "new media," says Greenberg.