In mid-April, fashion brand Revolve was hit with a class-action lawsuit alleging that the company and its influencer partners had failed to disclose paid partnerships. The lawsuit alleged that this gave consumers the false impression that endorsements of Revolve by various influencers were organic rather than paid.
In recent months, similar lawsuits have hit other fashion brands, like Shein. But Revolve’s was notable because the company actually acknowledged the risks in its influencer model in its 2023 annual earnings report. The company stated that failure to abide by regulations could “subject us to regulatory investigations, class action lawsuits, liability, taxes, fines or other penalties, and have a material adverse effect on our business, financial condition and operating results.”
But what are those regulations? And how can brands avoid violating them? Glossy spoke with influencer marketing and legal experts about exactly what the rules are for disclosing influencer partnerships and what brands can do to avoid a class-action lawsuit or other detrimental effects of failing to meet them.
A term that comes up frequently in the FTC’s official rules on the disclosure of paid endorsements is “clear and conspicuous.” According to Aaron Messing, a lawyer and shareholder in Messing Law, a law firm that regularly works with influencers and brands on such partnerships, just using an “#ad” label in the caption of a social media post isn’t enough.
“Disclosures should be prominent, easily understandable and in close physical proximity to all comments by the endorser and the sponsor and/or its products or services,” Messing said. “Any content created by the endorser must reflect the endorser’s honest opinions, findings, beliefs, or experiences, and may not contain any statements or representations that are not true or are deceptive.”
Those disclosures must also be unavoidable, meaning they can’t be buried in the caption or disguised among a bevy of other hashtags. Additionally, the disclosure itself should match the content. If the endorsement takes the form of a written blog post, the disclosure should be an unmissable part of the text. If it’s a video on social media, the disclosure should be in the video itself.
While those rules may sound strict, the FTC will normally accept them in many forms, not requiring hyper-specific language as long as the “clear, conspicuous and unavoidable” criteria are met. While that open-endedness can be a benefit for a brand or creator’s creative expression, it also leads to some murkiness.
“Unfortunately, the FTC does not provide bright-line rules defining disclosure, but instead highlights the nuances and ambiguities in that determination, emphasizing the blurred lines that arise with social media endorsements,” Messing said. “This requires a case-by-case analysis, and for that reason, there can be significant rule-breaking — even if unintentional — due to the complexity of the analyses.”
There is added complexity around gifting compared to paid partnerships, as well as the category of product the brand is selling, according to Sarah Bowden, vp of client services at influencer marketing agency Influencer.
“Some of our clients have to be more cautious,” Bowden said. “With supplements or anything healthcare-related, you have to be very careful because you cannot say a product does something that it hasn’t been clinically tested and proven to do.”
And the landscape is also shifting. While class-action lawsuits, like the ones against Revolve and Shein, are on the rise, it’s likely that FTC enforcement will lessen, thanks to the Trump administration’s broad directive to gut federal agencies and reduce regulations.
“While influencer disclosures were an important priority for the Biden FTC, they are not likely to be an important priority for the Trump FTC, given its agenda,” said Allison Fitzpatrick, a lawyer and partner in the advertising and marketing practice at the law firm Davis+Gilbert. “That does not mean influencers and brands should be ignoring the law, as other entities are taking the lead in enforcing the FTC Endorsement Guides. For example, the National Advertising Division, a self-regulatory organization whose goal is to build consumer trust in advertising, has brought several inquiries involving influencer disclosures.”
Fitzpatrick pointed to the NAD’s recent inquiry regarding posts from the influencer Brittany Mahomes about Skims. The posts were initially not marked as paid partnerships, but after an inquiry from the NAD, the posts were amended on Monday to include clearer disclosures.
The biggest risk for brands is that they can’t always control exactly what a creator says or does in a paid post. While some contracts may give the brand final approval of the exact wording an influencer uses in a post, others don’t. In that scenario, Bowden said it is a brand’s responsibility to make sure the influencer is aware of the legal repercussions of not disclosing a partnership. But both brand and influencer can be subject to the consequences. Three influencers are being sued in the Revolve class-action lawsuit alongside the brand, for example.
“From our side, we have multiple touchpoints throughout the campaign to make sure we’re reinforcing that [requirement],” Bowden said. “We bring it up to the creator in the briefing, it goes into the contract, and is written super clearly there. Then once we’re executing, we approve all content and captions, so there are a lot of safeguards.”
She said gifting campaigns are the most challenging since the brand often doesn’t get final approval. But her agency can reach out to an influencer after a post is made and request an amendment if no disclosure was made.
But for brands that send out lots of free products to influencers, only a certain level of diligence is required.
“My experience is that the FTC is pretty reasonable,” Bowden said. “They don’t expect you to monitor the feeds of every creator you’ve sent a sample to until the end of time. They’re more looking for a pattern of behavior. And they’re more likely to come after a brand with multiple offenses over time.”
