Annika Jordan Cole
The Legal Side of a Social Media Influencer Business
When the occupation of social media influencer comes to mind, most people think it is simply someone snapping photos of products and making tons of money from their posts. Truthfully, there is more that goes into being an influencer and most people don’t think of the legal side of the career. There are guidelines, rules and regulations, contracts, and more influencers must know and follow to be successful. Just like any business, it is important to know the legal side to make sure you and your business are protected.
There are rules and regulations when it comes to marketing as a social media influencer. It is essential that influencers understand these rules and regulations, both regionally and nationally, so that they are working well within the guidelines. Another important note is that these laws can vary depending on the country they are marketing towards. For instance, The United States, Canada, and the United Kingdom all have different guidelines when it comes to advertising. This means that if an influencer lives in the US but is marketing toward the UK as well as the US, they must follow the guidelines of both countries.
Most companies look at social media influencers as contractors. They are signing an agreement with a company to promote said company’s product. These contracts cover what the influencer is promoting, how they are promoting it, and what they are getting paid. When looking over a contract from a company, it is imperative that influencers understand the contract because often companies are looking to protect themselves. However, contracts done well will protect both the company and the influencer. It can even be helpful to have a business law attorney look over it to make sure that the contract doesn’t have any ambiguous language.
The most common way influencers make money is through advertisements. An integral part of doing an advertisement is ensuring that the influencer's audience knows when the content is an ad. In fact, advertisers are required to clearly label ads. This is to avoid misleading advertising or accusations of such a thing. An effortless way to clearly label an ad is to use hashtags such as #ad#ad, #advertisement#advertisement, or #sponsored#sponsored. When posting a video that is an advertisement or sponsored, verbal confirmation works. It is important to note that disclaimers must be directly on the post or page of the upload; influencers can’t post a link that leads to a different page containing the disclaimer.
A crucial part of endorsing a product is maintaining honesty towards the audience. Making false claims that the influencer knows are untrue is prohibited in most countries. This may seem like an easy rule to follow but there are several types of false claims. The most obvious is outright falsehoods, this is when an influencer just lies about a product. A less obvious type of false claim is called unrepresentative testimonials. For an influencer, this means that they can’t share an experience they have had with a product if it doesn’t show a fair representation of the product or its effectiveness. Lastly, an influencer can’t make claims about a product if they have not used it. These are known as unsubstantiated claims.
Sometimes influencers use someone else’s work such as music, images, or content. This can become an issue if they are not using the proper citation or permission. Without using the proper citation or permission, an influencer can easily get into legal trouble. The content that they are posting can be removed and the influencer may even get sued. It is important that influencers are using something from the internet that is either free to use or that they are giving the correct credit.
TAKING CARE OF BUSINESS
There are a few things that influencers can do to protect their business. The first is to make sure that if they are making enough money, influencers are doing their taxes. Being a social media influencer can start off as a side hustle they enjoy but it is important that when influencers start making money, they treat it like a business. Income from being an influencer counts just like any other income and should be reported to the IRS. Another thing influencers can do is form register their protected marks and intellectual property as well as form an LLC.
The legal side of having a social media influencer business is complicated. Influencers must make sure that when advertising, they completely understand the product. They must have clear disclosures so their audience can easily recognize their advertisements. A code of honesty is also needed when being sponsored or using other people’s work. Lastly, they must understand the social media policies that each company sponsoring them has and know how to protect their business.
Dye Culik PC is a business law firm in Charlotte, North Carolina. Our attorneys work with all types of businesses and love working with social media influencer businesses to make sure the business owner and business are protected and operating safely. If you would like to set up a consultation to discuss your business, contact us or drop a note in our Instagram DMs at @dyeculik.com. We’re here to help!