Social media has turned influencers into powerful marketing partners for brands. A single post can introduce a product to thousands and sometimes even millions of potential customers. For many social media influencers, sponsored content is their primary source of income, and some even run fully fledged influencer businesses. However, as with any business, there are responsibilities. As an influencer, you are not just casually posting online; you are engaging in commercial advertising. That means your content must follow the same legal standards that apply to traditional marketing campaigns. Below, we discuss the legal risks influencers often overlook.

Failing to Disclose Sponsored Relationships

One of the common legal risks influencers often overlook is failing to disclose sponsorships properly or not disclosing at all. The Federal Trade Commission requires influencers to clearly reveal when they have a financial relationship with a brand. This includes payments, free products, affiliate commissions, and any other form of compensation.

When you post content that involves a paid relationship, your followers should immediately know that it is promotional. Using hashtags such as #ad or #sponsored can satisfy disclosure requirements, as long as it is easy for viewers to see and understand.

Issues arise when influencers try to appear neutral while, in reality, they are actually promoting a product and getting compensated for it. If you mislead your audience into believing the recommendation is independent, regulators may view the post as deceptive advertising.

Making False or Exaggerated Claims

Another legal risk is making a product claim that cannot be backed by evidence. Even if a brand handed you marketing statements to use in your content, you must verify the accuracy of those statements. This is because if the claim turns out to be misleading, such as promising unrealistic results, you could face scrutiny from regulators. Investigators can review your entire content history if there are controversies. That means if older posts lacked proper disclosure or contained questionable claims, you may have just created a new problem.

Using Copyrighted Content

While the focus is on growing your audience, you cannot overlook copyright law. Music, photos, logos, and video clips are typically protected by copyright, meaning you cannot use them freely without permission. For example, if you include a popular song in a video without realizing it isn’t licensed for commercial use, the copyright owner could pursue legal action.

Assuming Content Qualifies as “Fair Use”

Some influencers assume that short clips or edited versions of copyrighted content qualify as fair use. However, the reality is more complicated. Fair use allows limited use of copyrighted material for commentary, criticism, or education. Sponsored posts, especially those that involve commercial promotion, are less likely to fall within fair use protections.

Breach of Contract With Brand Partners

Influencers sometimes ignore or misunderstand their brand agreements, such as exclusivity clauses, approval requirements, or usage rights. Posting a competing product or brand, missing deliverables, or publishing unapproved content can violate the contract and expose you to financial penalties, repayment demands, or legal disputes with the sponsoring brand.

FTC Disclosure Failures: The Risk Influencers Often Underestimate

The FTC’s endorsement disclosure requirements apply to influencers personally, not just to the brands that hire them. Under Section 5 of the FTC Act, 15 U.S.C. § 45, posting sponsored content without a clear and conspicuous disclosure of the material connection to the brand is a deceptive practice. The FTC’s updated Endorsement Guides, 16 C.F.R. Part 255 (revised 2023), make explicit that individual creators are subject to these rules whenever they receive compensation—including free products, travel, event access, or affiliate commissions—in exchange for posting. The guides specify that disclosure must be “clear and conspicuous,” meaning it must stand out from surrounding content, appear before the audience engages with the endorsement, and use unambiguous language.

Many influencers believe that using platform-native disclosure tools—Instagram’s “Paid Partnership” label, TikTok’s “Promotional Content” toggle—satisfies their legal obligations. The FTC’s position is that these tools are helpful but may not be sufficient standing alone, particularly when the platform label appears only in small text that a viewer might not notice before engaging with the content. For video content, the FTC expects both an on-screen text disclosure and a verbal statement near the beginning of the video. For stories, the disclosure must appear within the story itself, not linked to a bio or relegated to a subsequent story. Influencers who rely entirely on platform tools without accompanying verbal or caption disclosure carry higher FTC risk than they realize.

Intellectual Property Ownership Disputes With Brands

One of the most common post-deal legal disputes between influencers and brands involves who owns the content created for a sponsored campaign. Under the Copyright Act, 17 U.S.C. § 201, the author of a work owns the copyright. In the context of influencer marketing, the creator is typically the author—and therefore the initial copyright owner—of the photos, videos, and written content they produce. However, most brand contracts include IP assignment or broad license clauses that transfer copyright to the brand or grant the brand extensive rights to use, modify, and repurpose the content across any channel and in perpetuity.

Disputes arise most often when a brand uses influencer-created content in ways that were not contemplated in the original deal: repurposing an Instagram post in a television commercial, using a creator’s image in out-of-home advertising, creating a brand ambassador campaign using content the creator thought was a one-time post, or whitelisting the creator’s account to run paid ads without the creator’s ongoing consent. If the contract language does not define the scope of the usage license with specificity—platforms, duration, formats, channels—the brand may argue that a broadly worded “all rights” clause covers these additional uses. The creator’s argument that the parties only intended Instagram use faces an uphill battle against unambiguous contract language.

State Sales Tax Obligations on Influencer Income

Influencers who receive payment for sponsored content are providing services in interstate commerce and may have state tax filing obligations in states beyond their own. Most states tax service income earned by residents; some states also impose sales or use tax on certain digital services or advertising services. Influencers who receive substantial in-kind compensation—free products, travel, accommodations—must include the fair market value of those items in gross income for federal and state income tax purposes, which many creators overlook. The IRS treats barter transactions and in-kind compensation as taxable income equal to the fair market value of the goods or services received, and failure to report them is not a minor bookkeeping issue—it can constitute tax fraud if systematic and substantial.

The creator economy’s intersection with state sales tax law is unsettled and evolving. Following South Dakota v. Wayfair, Inc., 585 U.S. 162 (2018), states can require out-of-state sellers to collect sales tax based on economic nexus—without physical presence—which has prompted states to scrutinize whether digital advertising and influencer marketing services are taxable. Creators who derive income from multiple states through affiliate links, online courses, merchandise, or licensing deals should consult a tax professional familiar with multi-state sales tax nexus, particularly if their income involves goods as well as services, since the taxability analysis differs.

Right of Publicity Risks When Promoting Third-Party Products

Influencers should understand that the right of publicity—the right to control commercial use of one’s name, image, and likeness—protects other individuals as well as themselves. When sponsored content features other recognizable people—friends, family members, celebrities captured in a crowd, or minor public figures—without their consent, it creates right of publicity exposure. California Civil Code § 3344 requires written consent for the commercial use of a person’s name, voice, signature, photograph, or likeness. New York Civil Rights Law §§ 50–51 similarly prohibits commercial use of a living person’s name, portrait, picture, or voice without written consent. These statutes provide for actual damages, statutory damages, punitive damages, and attorney’s fees for knowing violations.

The right of publicity issue becomes particularly acute when brands instruct influencers to feature specific people in their content—a family member using a product, a friend reacting to a brand experience, or extras in a lifestyle video. If the people featured are identifiable and the content is commercial, written releases are required in California and New York and are advisable everywhere. AI-generated deepfakes of real people used in sponsored content without the depicted person’s consent create both right of publicity claims and potential DMCA liability issues. Several states have enacted or are advancing specific statutes addressing AI-generated likenesses without consent, with enhanced damages for commercial uses.

Product Liability Exposure in Sponsored Content

Influencers who promote products they genuinely use and endorse generally do not face product liability claims—that exposure rests primarily with the manufacturer and seller. But the analysis changes when an influencer makes specific claims about a product’s safety, efficacy, health benefits, or performance that go beyond what the brand authorized or what the evidence supports. FTC advertising substantiation doctrine requires that any objective product claim—”this supplement helped me lose 20 pounds,” “this cream cleared my acne in two weeks”—be supported by competent and reliable evidence. When an influencer makes personal testimonial claims that consumers are likely to treat as factual assertions rather than opinions, both the influencer and the brand can face FTC enforcement for inadequately substantiated claims.

Health and wellness products, dietary supplements, and financial products carry elevated risk. The FTC’s recent enforcement actions in these categories have targeted both brands and individual influencers who made specific, unsubstantiated health claims. For supplements, claims that imply disease treatment or prevention are regulated by the FDA under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 321 et seq., regardless of whether the product is classified as a dietary supplement or a drug. Influencers promoting supplements should review the specific health claims they intend to make against FDA guidance on structure-function claims, disease claims, and authorized statements—and should decline to make any claim the brand cannot support with credible evidence.

Contracts With Minors: Special Considerations

Minor influencers—creators under 18—present unique legal issues for both the creator’s family and the brands that engage them. Under common law, contracts entered into by minors are voidable at the minor’s election upon reaching the age of majority. This means that a brand deal signed by a 15-year-old (or their parent without court approval) may be unenforceable by the brand at the minor’s option. California has specific statutes governing entertainment contracts involving minors: California Family Code § 6750 requires court approval for minor performer contracts to be enforceable against the minor, and California Family Code § 6752 requires that a percentage of the minor’s earnings be set aside in a blocked trust account (the Coogan Law).

While the Coogan Law was enacted for traditional entertainment industry performers, its principles—protecting the financial interests of minor earners—are increasingly being discussed in the context of child influencers. Several states have passed or are advancing legislation specifically addressing minors who generate substantial income through social media, with provisions for parental accounting, trust set-asides, and disclosure requirements. Illinois enacted HB1591 in 2023 requiring parents who monetize their children’s appearances in social media content to set aside a portion of earnings for the child in a trust. Families managing minor influencers and brands that regularly engage minor creators should review applicable state law and structure contracts accordingly to avoid both unenforceability and potential fiduciary liability.

If you are an influencer navigating contract disputes, FTC compliance, or intellectual property issues with brand partners—or a brand dealing with a non-compliant creator—contact the internet law attorneys at Revision Legal through the form on this page or call (855) 473-8474. Our internet law practice advises influencers, brands, and agencies on contracts, FTC compliance, and IP disputes nationwide.