2022 0510 - Comment - IMG to FTC - Integrity Marketing Group - Deceptive or Unfair Earnings Claims - [2022-0020-1575]
- 2022 0510 - Comment - IMG to FTC - Integrity Marketing Group - Deceptive or Unfair Earnings Claims - [2022-0020-1575] --- [BonkNote] --- [16p-link]
- Authority - Actual Authority, Apparent Authority
- (p2) - Integrity’s nearly 5,500 employees work with more than 420,000 independent agents and advisors who serve over 10 million clients annually.
- In 2021, Integrity helped carriers place more than $7 billion in new sales and oversaw more than $20 billion of assets under management and advisement through its RIA and broker-dealer platforms.
- While Integrity has a wide network of partners and independent agents, it has very little control over the day-to-day activities of the independent agents.
- (p14-15) - Importantly, courts have held that the FTC may hold companies liable for actions taken by individual agents if the agents act “within the actual or apparent scope of [their] authority.” Goodman v. Federal Trade Commission, 244 F.2d 584, 592 (9th Cir. 1957).
- Here, individuals who post about their own earnings (which can come from multiple sources because they are independent contractors) on social media do not act within the actual or apparent scope of Integrity’s authority or any other third-party company with which they may be contracted.
- Individual agents do not have actual authority to broadcast earnings claims on behalf of Integrity.
- Actual authority “exists only where the agent may reasonably infer from the words or conduct of the principal that the principal has consented to the agent’s performance of a particular act.” Id. (citing Restatement § 7 cmt. b) (emphasis added).
- Integrity has not consented to agents’ discussions of earnings on social media.
- Nor do individual agents have apparent authority when they post on social media.
- “Apparent authority arises from the written or spoken words or any other conduct of the principal which, reasonably interpreted, causes [a] third person to believe that the principal consents to have [an] act done on his behalf by the person purporting to act for him.” Dinaco, Inc. v. Time Warner, Inc., 346 F.3d 64, 69 (2d Cir. 2003) (quotation marks and citation omitted).
- -- Tiktok --
- And when an individual posts about her personal experiences on her own social media account, a viewer generally does not attribute those posts to anyone else. Indeed, precisely for that reason, the FTC has strict rules requiring advertisement disclosure so that users can learn who is sponsoring a particular post. Disclosures 101 for Social Media. Without these rules, a viewer would not attribute a post to a corporate sponsor but rather to the individual. See id.
- Because agents have neither actual nor apparent authority to post earnings claims on social media, FTC should not—and cannot—hold Integrity (or any third-party company that the agents may be doing business with) liable.