Grace Buczak

Associate Editor 

Loyola University Chicago School of Law, JD 2027

Influencer marketing has become a global industry, projected to exceed $24 billion in 2025, with the United States representing one of its largest and most dynamic markets. Influencers have become key cultural and commercial figures, often blurring the line between entertainment and advertising. This rise has brought with it serious concerns about transparency, deception, and consumer protection. The Federal Trade Commission (FTC), the primary regulator of advertising in the United States, has increasingly turned its attention to influencer marketing and the legal obligations it entails.

FTC regulations

At the core of the regulatory framework lies Section 5 of the FTC Act, which prohibits “unfair or deceptive acts or practices.” To explain how the rules apply to endorsements, the FTC created its Endorsement Guides. These guidelines, which have been revised several times, were most recently updated in July of 2023. The revisions addressed issues particularly relevant to social media, broadening the definition of “endorsement” to cover influencer content and social media tags, emphasizing the risks of advertising aimed at children, and clarifying that both advertisers and intermediaries may face liability for deceptive practices.

Despite this regulatory clarity, compliance across the influencer industry remains inconsistent. A recurring issue is the failure to make disclosures that are “clear and conspicuous.” Influencers often bury disclosures within long strings of hashtags, use ambiguous phrases like “partner” or “ambassador” rather than the more explicit “ad” or “sponsored,” or they rely on formats such as Instagram Stories that disappear within 24 hours, making monitoring difficult. Additionally, the practice of brands sending complimentary products to influencers further complicates the distinction between advertising and personal content, as influencers frequently post about these products to maintain business relationships, but there is no required quid pro quo.

The FTC has repeatedly warned that such practices fall short of legal requirements. In April of 2017,the agency sent more than 90 letters to Instagram influencers and brands reminding them of their disclosure obligations. Enforcement has not been limited to warnings. In 2022, the FTC reached a $9.4 million settlement with Google and iHeartMedia for deceptive influencer ads in which radio personalities promoted a smartphone they had never actually used. At the same time, other regulators have stepped into the space. The Securities and Exchange Commission (SEC), for example, brought a high-profile action against Kim Kardashian in 2022 for failing to disclose compensation in connection with a crypto asset promotion, resulting in a $1.26 million settlement.

Compliance challenges

The compliance challenge is compounded by the role of social media platforms themselves. Platforms such as Instagram and TikTok now provide branded content tools, including “paid partnership” tags, intended to facilitate disclosure. While these tools reflect an effort to self-regulate, they do not replace legal obligations under the FTC Act. The FTC has stressed that disclosures must be unavoidable, easily understood by ordinary consumers, and placed in a manner consistent with how people actually view digital content. A disclosure that is hidden in a collapsed caption or obscured by platform design, may not satisfy these standards, regardless of whether the platform has supplied a technical feature for it.

Apart from the efforts of formal regulators in regards to influencer advertising, additional efforts arise from the informal regulator: the audience consuming the content. Consumers tend to notice inauthentic product pushing, and often catch on to brand gifting when several influences appear to be using the same products from certain brands. The sheer scale of influencer marketing and the speed of technological change make comprehensive oversight difficult. Effective regulation will require not only enforcement but also continued education, collaboration with platforms, and perhaps new statutory authority.

In addition to regulatory efforts, Congress has considered legislative proposals that would impose statutory requirements on influencer marketing beyond current FTC guidance. From a compliance perspective, all involved parties must play an active role in taking on responsibility for disclosures. Brands must implement robust monitoring systems to ensure influencer partners make proper disclosures. Agencies must train creators in what constitutes “clear and conspicuous” language. Influencers themselves must take responsibility for transparency, recognizing that failure to disclose is not merely a reputational risk but a potential legal violation. This could look like verified creators taking certification courses, or even platforms offering to host trainings on their ad disclosure platforms and tools.