How Not to Get Sued as a Social Media Influencer

There are many ways to make money as an influencer, from making sponsored posts, endorsements, affiliate marketing, or selling ads on social media platforms. And while influencer marketing is profitable, you should brush up on your business law and avoid legal issues.

So before you make that next Instagram post, review the following areas where many influencers get into trouble.

False Advertising

When you promote a product, you should be careful of what you claim the product can do. False claims or deceptive advertising can land you in hot water. The FTC settled a $1 million lawsuit with a marketer of tea drinks alleging that they used influencers to make false claims of health benefits of drinking Profit Tea and Relax Tea. The FTC also warned the influencers about needing to make clear disclosures about their relationships with paid sponsors.

Know the law about endorsements. The Federal Trade Commission (FTC) has guidelines for endorsements and promotions. Merely connecting the brand sponsor to a hashtag in your post is not enough to alert your fans that you are being compensated for promoting a product. You should inform your audience that the company is paying you to discuss the product. According to FTC guidelines, you do not have to reveal how much you were paid but must disclose that you received compensation or have a relationship with the sponsor. This is a hot issue with the collapse of the cryptocurrency exchange FTX run by Sam Bankman-Fried, and the celebrities he paid to promote crypto as an investment without disclosing they were paid.

Defamation

Defamation is a statement that is untrue, published, and harmful to someone's reputation. Slander is defamation that is spoken. Libel is defamation that is published like a written piece or video.

In 2022, a court awarded Cardi B $1.25 million in a defamation lawsuit against YouTuber Tasha K and her channel, unWinewithTashaK. Tasha K, or Latasha Kebe, made videos alleging the singer used cocaine, had herpes, and engaged in prostitution. Truth is a defense to a defamation lawsuit. However, in court, Kebe admitted she knew or likely knew these allegations were false.

Fraud

Fraud is a crime when you deceive someone for personal gain. And influencers can be hit with fraud claims. In December of 2022, the SEC charged eight social media influencers who used Twitter and Discord to allegedly run a stock manipulation scheme called “pump and dump." They claimed the influencers promoted certain stocks, such as Game Stop, to generate interest, encouraging viewers to buy them, which drove up the stock price. Then, they would sell their shares for profit.

Copyright Infringement

A copyright is a legal protection for intellectual property that is an expression in fixed form. For example, you can copyright a book, screenplay, movie, or song. If someone uses that work without permission, they are liable for copyright infringement. So, if you want to use a song by Taylor Swift, you need permission first.

When you post a video with music, you must either use your own music or have permission from the artist (or the social media channel that has a license with the artist). TikTok, Instagram, and others have libraries that allow you to use their licensed content.

Inciting Riot

When Twitch influencer Kai Cenat hosted a giveaway in New York City, he was charged with unlawful assembly and inciting a riot. He alerted his followers that he would be giving away Gameboy5s, other electronics, and gifts from a truck in Union Square. In a short span, the area was flocked with thousands of people who became disorderly resulting in arrests. The problem? He didn't have a permit and failed to let the police know about the need for crowd control.

How to Protect Yourself

When making social media posts, content creators should ask:

• Is the content true or accurate?
• Am I disclosing paid relationships with companies?
• Is my disclaimer clear?
• Am I infringing on someone else's intellectual property rights?
• Am I defaming someone else?
• Could I cause damage to people or property (i.e., inciting a riot)?

At the very least, consider forming a limited liability company (LLC) to keep your personal assets separate from any business claims or lawsuits.

Related Resources:

• Does a Social Media Influencer Need an LLC? (FindLaw's Law and Daily Life)
• Is Your TikTok Video Violating Copyright Laws? (FindLaw's Law and Daily Life)
• Business Formation Made Simple (FindLaw Legal Forms and Services)