Navigating Compliance Issues In Ecommerce Influencer Marketing

What the Revolve Lawsuit Means for Brands, Retailers & Influencers: Transparency is now a legal requirement, not just a best practice. Shortly after sharing my guide to the Dos and Don’ts for the new FTC Rules on Reviews and Testimonials, we are already seeing the impact. The recent class action lawsuit against Revolve and several influencers is a powerful reminder that the FTC’s updated guidelines are being enforced and the consequences are significant. 𝗛𝗲𝗿𝗲 𝗶𝘀 𝘄𝗵𝗮𝘁 𝗵𝗮𝗽𝗽𝗲𝗻𝗲𝗱 Revolve is facing allegations for running an influencer campaign where paid endorsements appeared as genuine recommendations. The lawsuit claims that influencers did not use clear disclosures such as "#ad" or “paid partnership,” leaving many consumers alleging that they were unaware of the commercial relationship behind the posts. As a result, consumers may have paid higher prices, believing these were unbiased endorsements. 𝗧𝗵𝗲 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆 𝗶𝘀 𝘀𝘁𝗿𝗮𝗶𝗴𝗵𝘁𝗳𝗼𝗿𝘄𝗮𝗿𝗱 If you use reviews and testimonials or work with influencers, you are responsible for making sure every material connection is disclosed clearly and prominently. The FTC requires that any relationship, whether it involves payment, free products, or other perks, must be made obvious to the consumer before they interact with the content. Anything less can be considered deceptive and can result in legal action. 𝗪𝗵𝗮𝘁 𝘆𝗼𝘂 𝘀𝗵𝗼𝘂𝗹𝗱 𝗱𝗼 𝗿𝗶𝗴𝗵𝘁 𝗻𝗼𝘄 ✓ Review your influencer and review programs to identify any gaps in transparency or undisclosed relationships. ✓ Provide training for your team and partners so everyone understands and follows the rules. ✓ Ensure you are publishing only authentic and balanced reviews, without filtering out negative feedback or presenting a false impression. ✓ Make all disclosures clear and impossible to miss if there is any compensation, free product, or material connection. The Dos and Don’ts PDF is attached to this post for a practical guide to help your brand stay compliant and maintain consumer trust. 𝗧𝗵𝗲 𝗙𝗧𝗖’𝘀 𝗻𝗲𝘄 𝗿𝘂𝗹𝗲𝘀 𝗺𝗮𝗸𝗲 𝗶𝘁 𝗰𝗹𝗲𝗮𝗿: 𝗲𝘃𝗲𝗿𝘆 𝗯𝗿𝗮𝗻𝗱, 𝗿𝗲𝘁𝗮𝗶𝗹𝗲𝗿, 𝗮𝗻𝗱 𝗶𝗻𝗳𝗹𝘂𝗲𝗻𝗰𝗲𝗿 𝗺𝘂𝘀𝘁 𝗯𝗲 𝘂𝗽𝗳𝗿𝗼𝗻𝘁 𝗮𝗯𝗼𝘂𝘁 𝗽𝗮𝗶𝗱 𝗽𝗮𝗿𝘁𝗻𝗲𝗿𝘀𝗵𝗶𝗽𝘀 𝗮𝗻𝗱 𝗺𝗮𝘁𝗲𝗿𝗶𝗮𝗹 𝗰𝗼𝗻𝗻𝗲𝗰𝘁𝗶𝗼𝗻𝘀, 𝗼𝗿 𝗿𝗶𝘀𝗸 𝘀𝗲𝗿𝗶𝗼𝘂𝘀 𝗽𝗲𝗻𝗮𝗹𝘁𝗶𝗲𝘀 𝗮𝗻𝗱 𝗹𝗼𝘀𝘀 𝗼𝗳 𝗰𝗼𝗻𝘀𝘂𝗺𝗲𝗿 𝘁𝗿𝘂𝘀𝘁. Consumers are more discerning than ever, and they can spot insincerity from a mile away. Brands and retailers that embrace full disclosure and genuine endorsements will not only stay compliant, but also build stronger, lasting relationships with their audiences. Now is the time to treat transparency as your most valuable asset: because trust is earned, not engineered. If you have questions about the new FTC guidelines or want to discuss how these changes could impact your business, The Desire Company is ready to help you navigate this evolving landscape.

One of the most common hurdles in influencer marketing is the legal process. Protecting the brand is always priority #1. But, when legal gets too rigid, it slows things down and waters down the creative. These are the most common ways 𝗹𝗲𝗴𝗮𝗹 𝗰𝗮𝗻 𝗱𝗮𝗺𝗮𝗴𝗲 𝗮 𝗰𝗮𝗺𝗽𝗮𝗶𝗴𝗻: ⚠️ Scripts written like ad copy instead of creative guidance. The result feels stiff, and the connection with the audience drops ⚠️ Legal gets involved with feedback beyond identifying what’s incorrect or illegal ⚠️ Asking for the full formal product name in every mention. For instance, saying “Kentucky Fried Chicken 6-piece meal deal” every single time instead of “KFC.” It breaks the flow and makes the content feel scripted ⚠️ Banning any incidental, non‑competing logos in frame. Like, if an influencer is wearing a Nike hat with a swoosh on it. Most viewers wouldn’t notice it... until it’s blurred or awkwardly cut. And by the way, wearing that hat is totally fine legally given nominative fair use ⚠️ Long approval cycles with line‑by‑line rewrites. Timelines slip, and the creator’s energy fades 𝗜𝗳 𝘆𝗼𝘂 𝗹𝗲𝗮𝗱 𝗮 𝗯𝗿𝗮𝗻𝗱 interested in getting better results, these are the essentials to set up front with legal: ✅ Clarify legal’s role: avoid anything that’s factually incorrect, illegal, or puts a brand at risk ✅ Agree on the must‑protect items — claims, disclosures, competitor mentions ✅ Decide together what shorthand is acceptable for product names ✅ Be clear on how incidental logos will be handled ✅ Set realistic turnaround times and stick to them ✅ Define what’s a risk review vs. a tone change When legal and marketing work as partners, creators get room to work, campaigns perform better, and the content feels authentic. — 👋 I’m Brad. I help brands like Fiverr, AG1, and Whirlpool run impactful influencer campaigns. 💬 DM me if you want to talk creator partnerships.

Disclosing material connections is an important part of influencer and ambassador marketing, including when customers receive free products and post about them. Drunk Elephant, a well-known skincare brand, was recently targeted by the National Advertising Division (NAD) for alleged violations of their influencers and ambassadors not disclosing material connection. Here’s what we can learn. 👉 From NAD case: "A company influencer states “@Drunk Elephant you did it again – you guys know I’m obsessed with the bronzing drops… #drunkelephantpartner.” NAD goes on to state “The hashtag is on the fifth line and only visible if the viewer clicks on the hyperlink “more.” 🔹 Takeaway: Hiding material connection below the “more” section is not considered conspicuous and is therefore not compliant. Adding disclosures at the beginning of the post is always best. Also since this is a video post where the endorsement is made verbally the disclosure should be made verbally as well. 🔹Unpaid product is compensation: In this example the unpaid consumer who receives free product does not disclose material connection. If they would have said “Thanks for the free product” or “I love this free sample” that would be sufficient disclosure. 👉From NAD case: “The other TikTok video post was created by …  an unpaid influencer who received free product from the company. (The) video post did not feature a material connection disclosure. The text accompanying her post states “b-goldi illuminating drops are 10/10.” NAD noted that receiving free product constitutes a material connection that requires disclosure.” Generally speaking, there are two main types of NAD cases. 1) Challenge cases: This is when a competitor challenges the validity of another company’s claims. There is a cost associated with this and typically only larger companies participate in this. This is important to keep in mind if you are “poking the bear” of a large company. For example, saying a product works better than an incumbent product is a quick way to attract a challenge case. 2) Monitoring cases: NAD looks at different categories of claims and then finds claims to challenge. This Drunk Elephant example is a challenge case and since there is little enforcement of TikTok, I expect more NAD scrutiny of this platform. Read the full case here. https://lnkd.in/g-SuZDHT #WarningLetterWednesday #InfluencerMarketing