In 2009, the FTC revised its Guides Concerning the Use of Endorsements and Testimonials in Advertising to including social media. The guidance is not legally binding.
The guide helps advertisers and endorsers comply with Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices in commerce, according to the commission.
The FTC has also issued several "closing letters" announcing that it was closing (without bringing charges) investigations of companies that used social media endorsements in their marketing.
The FTC also has some excellent consumer and business education pieces on the revised endorsement guides.
Business education materials from the FTC:
FTC news releases on endorsements:
Revised endorsement guide – legal document
Tips for disclosing financial connection: