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Laws Regulating Influencers: What Influencers and Business Relying on them Need to Know

By October 14, 2021 No Comments

Companies and firms are now hiring influencers with a large social media following to promote products and services through their own personal media accounts.

75% of marketers use influencer marketing to advertise their promotion strategy, according to the 2017 survey by the Association of National Advertisers. 

The growth and popularity of this industry have not been without challenges. Back in 2018, the Competition and Markets Authority (CMA) investigated the practices of celebrities and online stars in relation to their brand marketing and advertising practices. In January of 2019, the investigation resulted in highlighting the issue of disclosure and compliance with consumer protection legislation.

In other words, the CMA findings summarized that the industry is not so simple in relation to posting a selfie in exchange for compensation, as most would assume. As an influential and highly-recognized investigation, the CMA advertised a clear message to the industry, alerting firms and companies in this sector to duly note the complex understanding of legal and commercial laws that surround this type of industry.

As the influencer marketing industry grows, laws and regulations are also trying to catch up.   In 2017, The Federal Trade Commission (FTC) released an endorsement guideline. A publication that releases information on inquiries about the use of endorsements, including social media. These guidelines help alleviate problematic concerns that naturally derive from this evolving industry.

For example, a common guideline from the FTC indicates that influencers must show proof of relationship with the said brand when posted on their social media accounts. This alleviates the question of followers seeing an ad or an organic post via influencer.

Influencers choosing not to abide by these guidelines can result in fines, penalties, and legal action. Reviewing and understanding CMA and FTC regulations can help you use influencer marketing in a compliant manner.

For more information about laws regulating influencers, contact attorney an influencer attorney at Ayala Law PA, or email attorney Eduardo A. Maura at eduardo@ayalalawpa.com or call our office at 305-570-2208

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