Influencer marketing leads to deceptive advertising practices
Farrah Zerola | May 7, 2026
Marketing–a familiar concept and one that many have watched evolve over the past few decades from magazine ads and billboards to TV commercials and digital advertising. One of the most recent fads in this space has been the use of influencer marketing, which is actively reshaping modern advertising through platforms like Instagram, TikTok and YouTube. What began as informal product endorsements by online personalities has evolved into a multi-billion dollar industry, but not without legal concerns.
While the current U.S. advertising disclosure rules apply to influencer marketing, there is a question of whether they remain sufficient in an environment where persuasive content pops up at what feels like every other scroll or click. The Federal Trade Commission’s (FTC) Endorsement Guides require that influencers “clearly and conspicuously” disclose “material connections” with brands, including payments, gifts, or sponsorship agreements. Despite this, disclosures are often vague, hidden, or entirely omitted. In other words, influencer relationships with brands have to be easily noticeable and understandable by the typical consumer in sponsored posts.
Just one example of this misleading marketing can be seen in the case FTC v. Teami (2020), where the FTC charged Teami–a tea company–and influencers for deceptive health claims and undisclosed endorsements. Teami claimed that their products could help with weight loss, fight cancer, treat sickness and perform other medical miracles without scientific evidence. The FTC was able to return more than $930,000 to consumers who bought the products.
In another case, the Securities and Exchange Commission (SEC) charged Kim Kardashian in 2022 for failing to disclose her paid relationship with EthereumMax, a crypto company she promoted in an Instagram post. The Kardashian was fined $1.26 million and agreed to not promote any crypto asset securities for three years. Given her status as a high-profile celebrity, there are many regulatory eyes watching Kim Kardashian, but there are too many influencers for government agencies to oversee them all. In fact, about 13 million people in the US say that social media content creation is their full-time job. This makes accountability and updated legal frameworks all the more important.
Consumer protection is also crucial, especially due to the demographic reach of influencer marketing. Empirical research from Pew Research Center shows that younger audiences are particularly susceptible to influencer persuasion, and 54% of 18- to 29-year-old social media users say influencers impact their purchasing decisions “a lot or a little.” Given that deceptive marketing is just that–deceptive–individuals under 18 may struggle even more with distinguishing between organic content and paid endorsements. A concern that is reflected in the Children’s Advertising Review Unit (CARU) guidelines, protections for youth-targeted advertising are emphasized. When disclosures are subtle, abbreviated (e.g. “#sp”) or embedded in dense captions, the risk of a child misunderstanding increases.
Beyond domestic regulations, other countries have their own ways of handling the influencer marketing regime. In the United Kingdom, the Advertising Standards Authority requires explicit labeling of paid content, and mandating that the tag be highlighted in some fashion. The UK was one of the first countries to extend advertising laws to this line of work, and it has been illegal to post paid content without noting so since 2008. In 2022, the Competition and Markets Authority enacted guidelines for influencers who do these paid promotions, and requires that social media platforms have the necessary tools to label them.
In 2023, France passed the most comprehensive influencer regulation in the world, “requiring influencers to have a written contract for every payment or gift of a certain value” (Harvard Business Review). Other things are banned completely from any kind of promotion, like betting, cosmetic surgery, tobacco and even crypto. France treats influencer marketing as a regulated economic activity rather than just content creation, introducing strict liability for influencers, agencies and platforms.
Comparatively, in the U.S. as of 2023–the first major update since 2009–the FTC provided a definition of “clear and conspicuous,” addressed fake likes and followers to create perceived online influence, specified that companies should not suppress negative reviews “or create an incentive program that favors positive reviews,” and clarified that the Endorsement Guides also apply to intermediaries like “advertising agencies, public relations firms and reputation management companies” (Quarles).
Ultimately, influencer marketing exposes a hole in U.S. advertising law. While flexibility and innovation are important, transparency and consumer protection must remain at the forefront of the conversation about online selling and safety. The FTC has taken steps to modernize its guidance, but enforcement challenges show that the regulatory framework has yet to evolve to keep up with today’s marketplace.
Sources
https://www.ftc.gov/news-events/topics/truth-advertising/advertisement-endorsements
https://www.ftc.gov/business-guidance/resources/ftcs-endorsement-guides-what-people-are-asking
https://www.asa.org.uk/advice-online/recognising-ads-social-media.html
https://www.sec.gov/newsroom/press-releases/2022-183
https://www.ftc.gov/legal-library/browse/cases-proceedings/182-3174-teami-llc
https://hbr.org/2024/05/why-the-influencer-industry-needs-guardrails
