Are you certain the influencers you work with know the rules—and are you confident they are following them? In today’s complex social media environment, even famous influencers can struggle to navigate the legal and ethical landscape. The larger audience an influencer have on social media, the more responsibility they carry.
Navigating the legal jungle as an influencer is not so easy, particularly when influencers are unaware of the restrictions governing their statements about brands and products in specific markets. For brands and agencies, it’s critical to recognize that in social media marketing, one of the key principles is ensuring that advertising is honest and truthful. This principle isn’t limited to local regulations; it is a global standard that brands must adhere to when working with influencers.
Recent case studies have underscored the importance of accountability within social media marketing, emphasizing that influencers must exercise caution in their communications to avoid making statements that could potentially harm both brands and consumers. Although the case studies come from diverse markets, they reveal commonalities in the influencer marketing world, reinforcing that the integrity of brand-influencer partnerships is a universal concern. For agencies and brands, understanding these legal and ethical challenges is essential to maintaining credibility and avoiding potentially costly missteps.
Protected sectors with clear expectations
In certain sectors, you may need a license or have some sort of connection to the product/service you are speaking of. For instance, a fashion influencer may not be the most reliable person to take advise on when it comes to fitness and nutrition. Meanwhile, even if you are a fitness personality, you cannot say whatever you think if it does not have supportive ground. When it comes to financial promotions and advertising, in certain countries, if you are not approved by a financial body, you may even be committing a criminal offense if promoting on social media. Let's dig a little deeper into this.
Consider this: If your brand operates in regulated industries, are you confident that your influencer partners are advertising it in compliance with regulations and backing up their claims with evidence required to avoid legal trouble?
Partnering with influencers who are not aware of the legal responsibilities could expose your brand to legal action, reputational damage, and financial penalties. Sometimes, even judicial courts notices that the influencers are not really authorised to say whatever they want.
A notable illustration of this principle can be found in the recent case before the Delhi High Court (Zydus Wellness Products Limited v. Mr. Prashant Desai), in which the court ruled against an influencer who disseminated false and disparaging information regarding a company's nutritional drink.
The court underscored that the influencer lacked the necessary qualifications as a professional, dietitian, or nutritionist, and had no formal affiliation with the industry. As a result, the unverified and unsupported claims made by the influencer were deemed misleading and irresponsible. This case serves as a good example, emphasizing the importance of verifying information before posting, as influencers can significantly impact both brand integrity and their own legal standing when engaging in potentially defamatory commentary. For brands, it is important to know which influencers they choose to engage with to ensure the influencers are aware of the rules. Especially in certain sectors such as health and nutrition or financial advice.
Case studies explains the difficulties of advertising in the health sector
Continuing with one of the most common areas where influencers encounter challenges in advertising and content dissemination—health and nutrition—there is a notable case from the Swedish Patent and Market court. The Patent and Market Court ruled against an influencer with a substantial following (150.000) for content she posted regarding "fish oil" (omega-3), in which she claimed that it boosts the immune system and protects against the COVID-19 disease. This post was published on March 14, 2020 (case PMT 5929-20).
The Court specifically emphasized that there is no scientific evidence to support these claims, rendering them dishonest and misleading. Furthermore, the Court characterized the marketing as aggressive, noting that the influencer exploited consumers' impaired capacity to make informed decisions during a pandemic. This exploitation is particularly concerning, as consumers may struggle to make sound choices in such circumstances, making claims about fish oil's protective effects against COVID-19 not only misleading but also unlawful.
In a similar incident, the Swedish Consumer Authority criticized another prominent influencer in Sweden with a following of 1.4 million for promoting a brand of menstrual tampons (full decision in Swedish here). The influencer claimed that these tampons were superior and implied that other brands risked leaving undesirable residues. The Swedish Consumer Authority concluded that the influencer lacked the necessary expertise to make such claims and that her statements were not backed by scientific evidence. These cases can serve as crucial reminders of the responsibility influencers hold in ensuring that their health-related claims are substantiated by credible research. This highlights the fact that influencers carry a quite big responsibility while advertising in this sector and brands must ensure that the influencers they are engaging with promote truthful and honest content.
The growth of “Finfluencers”
Another sector that has seen substantial growth in recent years due to the rising popularity of cryptocurrencies is advertising financial advice on social media. This sector is typically subject to regulation in most jurisdictions. Multiple court cases have been launched against influencers who spread misleading information about purchasing Bitcoin and influencers advertising about companies involved in cryptocurrency. This is demonstrated by legal actions taken in France and the United Kingdom. In France, a reality TV influencer was fined 20.000 EUR for misleading consumers as well as spreading wrong information regarding investments in cryptocurrency (case in French here). As we know by now, France is one of the first countries to implement a specific “Influencer Law“ governing the status of influencers (Law No. 2023-451 of 9 June 2023 “aiming at regulating commercial influence and combating the abuses of influencers on social networks”). This shows the importance of regulation this area as well as for influencer to keep up to date of relevant regulations.
Even famous celebrities have mad the mistake of fallen in this trap. In 2022, Kim Kardashian was fined 1.26 million USD for failure to disclose that she was paid $250,000 by crypto company EthereumMax to publish an Instagram post about its EMAX tokens. According to U.S. law, individuals who promote a specific stock or cryptocurrency must disclose that they are being compensated for their endorsements, including details about the payment amount, source, and type of compensation. This is important because the purpose of the regulations is to protect the investing public. This rule allies on everyone, whether the advertiser is a celebrity, influencer or anyone promoting such activities (read full article here). Likewise in the UK, where British reality TV-stars were charged with promoting unauthorised trading schemes on Instagram face a trial in 2027. They have allegedly offered financial advice on trading high-risk foreign exchange without authorisation (full article here). Brands and agencies involved in this sector must therefore also inform the influencers they are collaborating with that they are under strict rules and that disclosure and honest information is essential.
In the UK, individuals who are not authorized, such as influencers, may be committing a criminal offense if they promote financial products or services that fall under regulatory oversight without the approval of an individual authorized by the Financial Conduct Authority (FCA). This regulatory framework serves to protect consumers from potentially harmful financial advice and to maintain the integrity of the financial markets (the “financial promotion restrictions” in section 21 of the Financial Services and Markets Act 2000). You can find the full guide from FCA here.
What can we learn from this?
As social media's influence grows, so does the responsibility of influencers, particularly in regulated sectors like health, nutrition, and finance. For brands and agencies, it’s crucial to recognize that influencers’ statements can have significant legal and reputational consequences—not just for the influencers themselves, but also for the brands they represent and the consumers who rely on their recommendations.
Keeping track of regulatory requirements can be challenging, and influencers must ensure their claims are accurate and supported by credible evidence. High-profile cases in Sweden and India have illustrated the serious consequences of influencer marketing gone wrong with false information or non-supportive grounds when promoting certain products, underscoring the importance of possessing the appropriate expertise when discussing specific topics. Brands also need to ensure that only qualified voices are promoting their products in these sectors.
In the financial sector, influencers who promote products without proper authorization may face severe legal penalties. Recent cases in France and the UK show that financial advice is closely monitored and that there are strict rules in place to protect consumers.
For brands, working with influencers who understand their legal obligations and prioritize transparency is essential. By ensuring influencers operate within established frameworks, brands can protect both their reputation and the trust of their audience. As influencers engage with their extensive followings, agencies and brands must ensure they do so responsibly, given the substantial impact they have in today’s digital marketplace. The rules apply universally, whether the promotion comes from a celebrity, a micro-influencer, or any brand’s partner in these sensitive sectors.
