Influencer Marketing Expansion Attracts Federal Regulators

By Katherine D. Bishop June 15, 2020Business

The “influencer” marketing industry, which is predicted to become a $15 billion industry by 2022, is rapidly expanding, and with COVID-19 ramping up e-commerce, brands are increasingly turning to this marketing strategy. Influencers are people with varying amounts of online followers who promote and advertise products and services on YouTube, Twitter, Facebook, Snap Chat, Instagram, TikTok and blogs. Influencers can be celebrities, industry experts, or everyday people who have built a reputation for being knowledgeable on a specific topic. A successful influencer generates a large following of engaged people who trust and pay close attention to the influencer’s views and recommendations.

Businesses that utilize influencer marketing should be cautious of the legal risks. Consumer protection regulators, including the Federal Trade Commission (the “FTC”) and more recently the Food and Drug Administration (the “FDA”), are targeting deceptive influencer practices that could mislead consumers. Brands, media outlets, and influencers are legally obligated to disclose any social media post that was created from “material connections” between a brand and an influencer, and can all be held liable if the law is not observed. The FTC has stated that “material connections” could include a paycheck or gift in exchange for an endorsement, a family connection to a company, or an ownership stake in the company. Despite the requirements for disclosures on social media posts, many posts and influencers continue to not properly disclose.

To decrease the legal risks of influencer marketing, a business should consider implementing these practices:

  • Develop an influencer contract or terms of service which address the contractual terms necessary to properly create an influencer marketing campaign;
  • Monitor the continuous regulatory developments to ensure your business and influencers are complying with applicable law;
  • Provide your influencers with a set of guidelines as to what they must disclose and how they should disclose “material connections”; and
  • Develop active monitoring programs that monitor your influencers and vendors.

If you have questions about your organization’s influencer marketing policy and related legal issues, call Attorney Katherine D. Bishop at 401-824-5100 or email kbishop@pldolaw.com.

 

Disclaimer: This blog post is for informational purposes only. This blog is not legal advice and you should not use or rely on it as such. By reading this blog or our website, no attorney-client relationship is created. We do not provide legal advice to anyone except clients of the firm who have formally engaged us in writing to do so. This blog post may be considered attorney advertising in certain jurisdictions. The jurisdictions in which we practice license lawyers in the general practice of law, but do not license or certify any lawyer as an expert or specialist in any field of practice.

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Katherine D. Bishop is an Associate with Pannone Lopes Devereaux & O’Gara LLC. She focuses her practice on providing legal support across the firm’s practice areas, including as a member of the Litigation Team, assisting in client representation in all stages of litigation from pre-trial investigation and discovery, to motions and pleadings preparation through trial, settlement and the appeal process.

Attorney Bishop is an experienced legal researcher and skilled writer with significant work in the public and private sectors. Prior to joining PLDO, Attorney Bishop served as a Judicial Law Clerk for the Honorable Associate Justice Richard A. Licht of the Rhode Island Superior Court.  While in law school, she was a Judicial Intern for the Honorable Chief Justice Paul A. Suttell of the Rhode Island Supreme Court and for the Honorable Magistrate Judge Patricia A. Sullivan of the United States District Court for the District of Rhode Island. She also worked as a Research Assistant for a Roger Williams law professor and as a Law Clerk in the Office of Corporate Counsel for IDC, Inc. – The Newport Experience.

Attorney Bishop earned her J.D. from Roger Williams School of Law, magna cum laude.  She was the Editor-in-Chief of the Roger Williams University Law Review and CALI Award winner in Criminal Law, Contracts II, Legal Practice II, and SEM: Senior Abuse, Neglect, and Injuries.  She received her B.A. in Political Science from the University of Vermont. Attorney Bishop is licensed to practice law in Rhode Island and Massachusetts. To contact Attorney Bishop, please call 401-824-5510 or email kbishop@pldolaw.com.

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