Influencer Marketing Under the Microscope: Recent Developments and Best Practices for Compliance

As brands gear up for the holiday season — a peak period for influencer-driven campaigns — it is critical for companies to keep the rules governing influencer marketing top of mind. Misleading or non-compliant practices can trigger risk from multiple avenues, including regulatory enforcement, litigation, and challenges before the National Advertising Division (NAD) of BBB National Programs.

For example, as part of its recent “crackdown” on misleading direct-to-consumer pharmaceutical advertisements, the U.S. Food and Drug Administration has indicated it is gearing up to tackle misleading practices on social media. The agency emphasized that “[a]n increasing reliance on digital and social media channels, including undisclosed paid influencer promotion, has blurred the lines among editorial content, user-generated media and pharmaceutical advertising, making it increasingly difficult for patients to distinguish between evidence-based information and promotional material.”

Earlier this year, multiple consumer class action lawsuits were filed against brands and their influencers — including Celsius, Revolve, and Shein — for alleged misleading influencer marketing practices. Plaintiffs in these cases alleged that the companies and social media influencers engaged in misleading advertising of their products because they failed to disclose or adequately disclose that the influencers were paid for their endorsements. Alleging violations of state consumer protection laws and the Federal Trade Commission (FTC) Act, Plaintiffs argue that they purchased the products at a premium due to the misleading advertising and that they would not have bought or paid as much for the products had the influencers properly disclosed their material connections. While the Eleventh Circuit affirmed the dismissal of a similar case against Luli Fama Swimwear in August, most of the cases are ongoing.

The NAD also continues to closely examine influencer-based advertising. In recent decisions, the NAD has emphasized that material connections do not need to be financial to require disclosure and that platform-created tools alone are generally insufficient. For example, in a challenge against Agendia, Inc., the NAD determined that although a physician featured in Agendia’s social media posts did not receive direct compensation, her “closer-than-usual working relationship” with the company was material and required disclosure. In another case, involving dietary supplements, NAD found TikTok’s “creator earns commission” tag inadequate under the FTC’s Endorsement Guides, recommending clear and conspicuous disclosures in both audio and visual formats. By contrast, in a more recent case involving household products, NAD found TikTok’s automated disclosure sufficient where the influencer’s only connection was participation in TikTok Shop and receipt of a low-value free product, reasoning that additional disclosure would not materially enhance consumer understanding. However, NAD required extra disclosures or removal of posts when influencers had additional compensation or partnerships beyond TikTok Shop, highlighting the importance of context in evaluating whether a disclosure is adequate.

As artificial intelligence (AI)-generated content — including virtual influencers — proliferates, companies should also monitor emerging state legislation. For example, New York’s Synthetic Performer Disclosure Bill, passed in June and awaiting the governor’s signature, will require advertisers to conspicuously disclose when an ad features a “synthetic performer” — a digitally created asset generated using AI to simulate a human likeness or performance. Violations could result in civil penalties of $1,000 for a first offense and $5,000 for subsequent violations, with limited exemptions for audio-only ads and certain expressive works.

Importantly, the FTC makes clear in the preamble to its Endorsement Guides that “virtual endorsers” are subject to the same rules as human endorsers, including disclosure of any material connection that could affect consumer perception. Thus, if AI is used to simulate endorsements, the FTC requires disclosure of any such connection.

As influencer marketing faces increased attention from regulators, consumers, and competitors, companies should ensure compliance with the FTC’s Endorsement Guides and related advertising standards to reduce potential legal and reputational exposure. With the rise of platforms like TikTok Shop, brands are also increasingly relying on affiliate marketers — individuals who promote a brand’s products or services in exchange for a commission on resulting sales or leads. Companies should keep in mind that these affiliate relationships are considered material connections under the FTC’s Endorsement Guides and must also be clearly and conspicuously disclosed. Whether partnering directly with influencers or utilizing affiliate networks, brands should consider providing clear do’s and don’ts at the outset of any campaign to help set expectations and mitigate the risk of non-compliant practices.

Below are key requirements to keep in mind when designing influencer or affiliate marketing campaigns:

• Disclose Material Connections Clearly and Conspicuously: Any financial relationship, gift, affiliate link, or other tie between influencers and brands must be disclosed in a way that is unavoidable and easy to understand — for example by using plain language (e.g., “Ad,” “Sponsored,” “I earn a commission”), placed upfront in captions, and integrated into the content (verbal and on-screen for videos). Remember, platform tools like Meta’s “Paid Partnership” or TikTok’s “creator earns commission” alone are typically not sufficient.
• Ensure Truthful Endorsements: Influencer statements must reflect the honest opinions and experiences of the influencer.
• Substantiate All Claims: Advertisers are responsible for ensuring influencer claims are truthful, non-misleading, and supported by competent and reliable evidence.
• Typical Results Disclosure: If influencers share atypical outcomes, the FTC requires that the advertiser clearly and conspicuously disclose what consumers can generally expect.
• Monitor Influencer Content: The FTC also expects brands to actively oversee influencer campaigns to ensure compliance.
• Treat Virtual or AI-generated Endorsers/Influencers as You Would Human Ones: If using AI-generated influencers, ensure material connections are disclosed and claims are substantiated. In light of emerging state legislations, consider also including clear and conspicuous disclosures that content is AI-generated.

If you have questions about structuring compliant influencer campaigns or navigating these evolving standards, please reach out to the authors or any member of Arnold & Porter’s Consumer Protection & Advertising team.

© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.