Andrew Lustigman and Morgan Spina Publish Article in Law360 on How Influencer Marketing Partnerships Face Rising Litigation Risk

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group, and Branding Department associate Morgan Spina published an article in Law360 entitled “Influencer Marketing Partnerships Face Rising Litigation Risk.” In the article, Andy and Morgan discuss how social media marketing has matured and how brands and influencers are dealing with an increase of lawsuits due to their failure to meet legal disclosure requirements. Robust compliance measures must be implemented to meet Federal Trade Commission (FTC), Better Business Bureau and other relevant laws and guidelines to protect a company’s business development and marketing initiatives. Notably, the authors explain, there has been a rise in class action lawsuits filed by private plaintiffs that target both influencers and the brands that engage them based on the disclosure obligations mandated under the FTC’s and NAD’s guides. As a result, both brands and influencers can face significant legal risk and economic exposure when they fail to disclose a material relationship. “The central theory of these lawsuits is that the brands and influencers mislead consumers by creating the impression that influencer endorsements were organic and unpaid, while concealing material connections that could influence purchasing decisions,” Andy and Morgan note. They go on to highlight that, “…disclosure of any material connection between an influencer and a brand remains a critical requirement, regardless of how familiar influencer marketing may seem to today’s digital audience.” Andy and Morgan recommend compliance measures such as: clear and visible disclosures at the top of social media posts and captions, adding wording that shows the relationship between a company and influencer, outlining necessary disclosures in influencer contracts and briefs, and requiring disclosure and compliance training for marketing teams and influencers. It is also essential for companies to create a monitoring process to ensure influencer compliance with disclosure requirements, project management workflows for internal team reviews, and avoiding fake reviews and followers and AI-generated false content. “When armed with strategic guidance and efficient resources, all sides can adapt to government regulations more smoothly and swiftly,” Andy and Morgan explain. “This helps brands and influencers maintain a competitive edge where their reputations and marketing initiatives are safeguarded.”