If you want to become one of them, don’t overlook the legal risks
So you’ve noticed your social media channel is taking off. Your Instagram, Tik Tok, YouTube or another account is receiving hundreds, or even thousands, of “likes” or views, and your online following is blossoming.
And not only that, but a few businesses selling products related to your posts have left comments, hoping to draw some of your followers in their direction. You glance at your inbox and, behold, there are a couple of offers to pay you actual money for product endorsements. You’re becoming an outright influencer!
This all seems terrific, right? You can post to social media and make a few dollars, or maybe many dollars, while presenting yourself to the online world in a way that you enjoy — perhaps offering critiques of craft beer or showing off innovative dance routines. What could go wrong here?
The truth is, this is great news. For generations, celebrities have reaped financial dividends for endorsing products. Famous athletes, actors and other well-known people not only bring attention to a product, but their endorsements lend credibility to product value. Think Michael Jordan endorsing brand underwear, or untold numbers of sweaty professional athletes chugging down Gatorade, or the popular actress Jennifer Garner pitching a certain credit card company. Today, cultural stars like Venezuela’s Lele Pons, with nearly 44 million followers on Instagram (@lelepons), are fully created on the internet. You’re about to join their ranks as a paid influencer.
But just as there are legal considerations for these celebrities, there are potential legal ramifications to think about and study if you choose to become an online influencer. Government regulations regarding the internet are still being written and debated and adjudicated in the courts. But pre-existing laws and regulations do apply to social media influencers, just as established laws are applied to other paid product endorsers. In short, endorsing products online presents some legal risks.
The FTC
The federal regulator you need to be most concerned with is the Federal Trade Commission (“FTC”). The FTC promotes fairness and transparency in advertising by regulating anti-competitive, deceptive, and unfair business practices. The FTC enforces a variety of laws, the most prominent of which is the eponymous Federal Trade Commission Act (15 U.S.C. 45), and can initiate enforcement actions against those it deems in violation of these practices.
The FTC requires that online advertising, whether direct or through influencers, comply with the same consumer protection laws that apply to commercial activities in any other media. Any disclosures required to prevent an ad from being misleading must be “clear and conspicuous.” Also, you must openly disclose your relationship to the brand you’re endorsing.
In fact, in 2017, the FTC looked critically at internet content — by bloggers. The commission began cracking down on bloggers who promoted products while receiving “freebies” or other compensation but without providing their audience with the knowledge of this compensation. Bloggers and influencers are not journalists, and they don’t always adhere to the same ethical rules as professional media, so they came under government scrutiny.
Sponsored posts by influencers must adhere to the FTC’s regulations, and so the FTC has released a variety of guidelines to facilitate compliance. There is a helpful resource center for the topic. Online influencers should also familiarize themselves with the FTC’s .com Disclosure guidelines and the particular Do’s and Don’ts highlighted by the FTC. If reading all these materials sounds daunting, the FTC has even gone to great lengths to create videos.
The various FTC guidance materials themselves are not law, but they indicate how the FTC intends to use its powers to enforce laws in this area. The guidelines tend to be updated whenever there’s a court decision that definitively impacts an issue covered by the guidelines. Almost all contracts between sponsors and influencers require the influencer to comply with the FTC’s guidelines (as well as the sponsor’s own guidelines).
While the vast majority of the FTC’s enforcement actions have been against sponsors, third-party marketers such as influencers can also land in hot water. Furthermore, because brands are really an influencer’s clients, failure to pay attention to clients’ needs can dry up opportunities. The resources provided by the FTC should be the starting point for every influencer doing business in the U.S.
Right of Publicity Laws
Influencers should be aware of relevant right of publicity laws that apply to their operations. No federal right of publicity law exists, so each state has its own laws — whether statutes or common law — that govern rights of publicity. (A good publicly available secondary resource that provides a 50-state survey of right of publicity laws is Rothman’s Roadmap to the Right of Publicity.)
Right of publicity relates to how a person’s identity is used for commercial purposes. Most right of publicity laws have explicit exceptions allowing use of identity for non-commercial and some commercial uses. These exceptions primarily relate to First Amendment rights, and most influencer posts fall within these exceptions.
Content that is purely a commercial or advertisement, however, is usually excluded from the exceptions. This means that using an individual’s identity in content that advertises a product or service can still lead to liability under the relevant state right of publicity statutes or common law. This is relevant for all sponsored content, which would almost certainly be construed as advertising.
Notably, the consent required by many state statutes must be in writing. In Illinois, that would be the Illinois Right of Publicity Act (765 ILCS 1075/1 et seq.). Therefore, the common practice for YouTubers to get consent only on video would not be sufficient under many of these statutes. Furthermore, most contracts between influencers and sponsors will require the influencers to represent and warrant that they have obtained all necessary consents from all third parties. So, in effect, these contractual provisions would require the influencers to have obtained written consent from any third parties that are identifiable — whether by name, voice, likeness, etc. — in the influencers’ sponsored content.
Copyright Laws
The U.S. Copyright Act is often implicated for influencers, who are presumably creating original content on a regular basis.
The statute and the case law throughout the country is consistently relevant for influencers as they navigate incorporation of others’ content into their own — and, just as importantly, vice versa. Take as an example the 2017 case of two YouTubers in Hughes v. Benjamin in the Southern District of New York. Akilah Hughes, a liberal writer and comedian, sued another YouTuber, British right-winger Carl Benjamin. A strident anti-feminist, Benjamin used a portion of Hughes’ footage from a Hillary Clinton election party. In the end, the New York court deemed Benjamin’s use of Hughes’ video was fair and not in violation of copyright law, because Benjamin used the footage as the subject of commentary and criticism. (Using a work as the subject of commentary, criticism, news reporting, or teaching should be distinguished from using a work as a tool in commenting or criticizing something else, or teaching about something else. While it’s still possible that something like that would still be fair use, it is less likely.)
There is a significant amount of case law relating to copyright, and these laws may differ by jurisdiction. So influencers must pay attention to determine which law would technically apply to them, and which case law wouldn’t cover their activities directly but very well could apply if a case ever arose against the influencer.
Also, almost all influencer-related work is on the Internet and digital in nature, so the Digital Millennium Copyright Act (DMCA) is usually going to be relevant. While the DMCA is an American law, it comes up regularly even outside the U.S., and other countries’ analogous laws that govern content on the Internet may apply to influencers regardless of where the influencers are located.
Lanham Act
The Lanham Act is the federal law governing trademarks, but it also relates to a variety of other consumer protection and prevention of false advertising measures. While only government agencies can enforce the FTC Act and many other consumer protection statutes, the Lanham Act provides a private cause of action. This means that a business’ consumers and competitors can similarly initiate proceedings against individuals and companies that have engaged in actionable conduct. Given that influencers are often either engaging in sponsored activities or are reviewing goods and services provided by various brands, influencers should familiarize themselves with the extent to which they can identify and discuss/criticize those brands.
Privacy Concerns
If a social media influencer has clients, customers, or employees, and the influencer wants to share information about those people or reshare something one of them has already posted, the influencer needs to obtain advance permission. Furthermore, because an influencer’s business is in large part built on amassing a contact list, influencers need to be careful in soliciting their contacts. Federal laws such as Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003 (CAN-SPAM) and the Telephone Consumer Privacy Act (TCPA), as well as a bevy of state-specific regulations, may come into play in relation to using personal information to contact subscribers. Influencers should seek to receive explicit permissions from customers and followers for subsequent contacts that may include sponsored materials. For simplicity, the permissions can be obtained electronically through a clickwrap agreement (such as terms of use on a website, or through disclaimers when someone is about to subscribe to a mailing list). Without obtaining explicit permission, however, the influencer could open herself up to litigation not just from regulators, but also from private parties.
YouTube Controls the Message
Our country is founded on principles of free speech and free expression, but that doesn’t extend to privately run social media sites. This is the reality: Social media networks like Facebook, Instagram, YouTube, or Twitter can dictate the behavior of their users.
While the U.S. Supreme Court has said that these networks are important public platforms to exercise First Amendment rights, they are still privately held entities that have control over any messages that influencers might try to convey. See, generally, Biden v. Knight First Amendment Inst. at Columbia Univ., No. 20-197 (Apr. 5, 2021) (Thomas J. concurring). Legal arguments have been put forward that social media sites should not be permitted to restrict content, but so far these arguments have all been quashed in the courts.
A Final Word
These are the main areas of legal concern that we have identified. There are, however, various other aspects of the law that could come into play for social media influencers than what we’ve already mentioned here. Depending on the industry, other regulators may get involved, such as DJ Khaled and Floyd Mayweather Jr.’s experience with the Securities and Exchange Commission when touting cryptocurrencies. In addition to regulators, as Kim Kardashian found out, watch groups are on the lookout for naughty influencer behavior as well. Also, law regarding internet behavior is evolving, and cases involving social media activity continue to mount in the courts. The final word on the legal parameters surrounding social media influencing has yet to be fully written. Stay tuned!