"Consumers increasingly rely on social-media personalities to recommend products and signal what to buy, avoid, and trust. This relationship rests on a fragile premise: that influencer opinions reflect genuine experience, not undisclosed commercial orchestration. While early regulatory attention focused on covert product promotion, a parallel practice has quietly taken hold. Brands are now deploying influencers to undermine competitors by casting doubt or discouraging purchase under the guise of independent opinion."
"Whether an influencer is paid to praise one product or disparage another, the legal question is the same: Are consumers being misled about the source and motivation of the message they are receiving? Regulatory Landscape The Federal Trade Commission's responded to influencer-driven marketing in 2023 when it revised its Guides Concerning the Use of Endorsements and Testimonials in Advertising. Influencers and advertisers now must disclose any "material connection"-including compensation, free products, affiliate revenue, family ties, or ambassador status-in a "clear and conspicuous" manner."
"This standard is platform-agnostic. Disclosures must be unavoidable in the context in which the endorsement appears, not buried in truncated captions or behind "see more" prompts. The 2023 revisions also address practices that previously occupied regulatory gray areas. Fake reviews, deceptive testimonials, endorsements delivered by virtual or AI-generated influencers, and statements that imply independence despite financial ties are all now prohibited."
Influencer marketing shapes consumer choices by leveraging perceived authenticity, with followers relying on personalities to recommend, avoid, and trust products. Brands have begun employing influencers not only to praise products but also to disparage competitors under the guise of independent opinion, a tactic called "negative influencing." Both paid praise and covert disparagement raise the same legal concern: consumers may be misled about the source and motivation of messages. In 2023 the Federal Trade Commission revised endorsement guides requiring disclosure of any "material connection" in a clear, conspicuous, platform-agnostic manner. The revisions also prohibit fake reviews, deceptive testimonials, and AI-driven or otherwise deceptive endorsements.
Read at Bloomberglaw
Unable to calculate read time
Collection
[
|
...
]