Consumers Sue Brand and Influencers for Lack of Disclosure – Tricia Meyer
by Tricia
My posts may include paid links for which I earn a commission. I often discuss FTC disclosure guidelines and affiliate marketing, including updates on relevant news and actions. There’s no distinction in the rules between affiliates and influencers, so this post will primarily focus on influencers. Keep in mind that these guidelines apply to anyone who earns money by endorsing products online or through social media.
In a Nutshell
Brands and influencers face legal repercussions not just from the FTC but also from consumers filing lawsuits under state laws mirroring the FTC Disclosure Guidelines. If consumers win these class-action suits, it could encourage even more consumers to take action against influencers or affiliate marketers who don’t disclose their compensation transparently.
Case Details: Blue Ice Vodka (Sava v. 21st Century Spirits, LLC)
This ongoing court case involves several influencers promoted by Blue Ice Vodka without disclosing their paid partnerships. Consumers bought the products based on these endorsements but later claimed they wouldn’t have purchased them had they known about the payments. The case raises significant concerns for affiliate marketers:
- Plaintiffs: Individual consumers, not government agencies.
- Lawsuit Grounds: Under Florida, Illinois, and California consumer protection statutes (the “Little-FTC Acts”).
- Influencer Campaign: The suit focuses on an influencer campaign where the brands pay influencers to promote their products without proper disclosure.
Understanding the Little FTC Acts
These are state laws modeled after federal FTC rules, allowing individual consumers or competitors to sue for deceptive marketing practices, including lack of disclosure. The Blue Ice Vodka court ruling states that these state laws incorporate the FTC Act and its guidelines, potentially leading to interpretations of the FTC disclosure rules in civil cases.
Implications for Affiliate Marketing
While brands and influencers worry about FTC actions, they should also consider potential class-action lawsuits from consumers misled by undisclosed endorsements. This case, though not yet fully decided, highlights a significant point regarding transparency in influencer marketing.