Influencer Marketing Can Cause Headaches With FTC, Creators’ NIL

Love it or hate it, influencer marketing looks like it’s not slowing down any time soon. Influencer Marketing Hub’s Influencer Marketing Benchmark Report 2025, released in April, indicated that the influencer marketing industry is expected to grow to a whopping $32.55 billion by the end of 2025, up a staggering 1,815% from its $1.7 billion market size in 2016, according to the report.

From the legal perspective of the marketer, successful management of influencer partnerships is ultimately about ensuring the protection of the brand. But that can mean a lot of different things.

There are two main categories of risk in influencer deals: legal and regulatory risks from third parties, and risks arising from the direct relationship between the brand and the influencer. These issues should be thoughtfully addressed in the company’s influencer agreements.

When representing the advertiser, it is also important to consider less-obvious legal risks—such as inadvertently creating an employee relationship with influencers and ownership and confidentiality of data derived from campaigns. It’s also important to consider business risks, such as potential reputational harm to the brand, and to ensure the agreement adequately addresses getting the metrics the brand needs to measure success and return on investment.

Companies should plan for several external risks as they engage with influencers for brand marketing. When a brand is using influencers to advertise, some of the biggest areas of potential legal exposure arise from potential violations of advertising and consumer protection laws, infringement of third-party intellectual property, and liability for violations of rights of publicity or privacy.

While brands should include indemnification clauses in their influencer agreements that protect the brand from potential third-party legal liability if the influencer violates any terms or laws, brands shouldn’t rely too heavily on such clauses for two reasons:

• The brand generally can’t shift the burden to the influencer in the case of regulatory enforcement or claims of secondary copyright infringement.
• Indemnity is only as good as the influencer’s pockets are deep; if the influencer can’t cover the defense, the brand will be stuck with the bill.

Regulatory Concerns

There are numerous avenues where regulatory challenges related to influencer marketing may arise. Influencer marketing is most notably regulated by the Federal Trade Commission under Section 5 of the FTC Act to protect consumers from deceptive advertising. Influencer marketing must comply with the same rules that govern other forms of advertising.

The FTC has published comprehensive guidance on endorsements by influencers, most recently updated in 2023, which sets forth straightforward guidelines on how and when to disclose material connections or relationships between the brand and the influencer that, if customers knew about it, might affect the credibility or independence of the endorsement.

The FTC has also released related guidance on advertising to children, solicitation of reviews, proper ad disclosure, deceptive marketing, and mislabeling. Along with other regulators and state agencies, the FTC can hold both brands and influencers responsible for compliance with laws regulating false advertising and other deceptive trade practices.

This includes not making deceptive or misleading claims or claims that aren’t backed up by evidence. Finally, posts by influencers can also give rise to brand liability for false advertising based on claims or challenges brought by competitors or consumers.

Third-Party IP Concerns

Another high-stakes liability concern is the risk that the content infringes the rights of a third party, particularly third-party IP or rights of publicity or privacy.

It’s important in all deals with influencers to make clear that all content must be original to and created solely by the influencer; doesn’t include the intellectual property of other parties, including any third-party music, photographs, artwork, trademarks, logos, or slogans; and doesn’t include the name, image, or likeness of any person other than the influencer unless the brand has provided prior written approval and has a signed release from the third party.

To mitigate the risks associated with unauthorized use of third-party intellectual property and rights of publicity or privacy issues, brands must set firm contractual expectations with influencers. But clear guidelines and contractual restrictions alone aren’t sufficient.

Brands should implement thorough review and approval processes to help protect both the brand and influencer from potential legal exposure, as well as ensure that the deal includes the right for the brand to require the influencer to promptly take down posted content, in case something slips through the cracks.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Cassidy Merriam is senior corporate counsel for Dish Network.

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