In the rapidly evolving world of social media marketing, content creators are an invaluable asset for brands seeking to reach a larger audience. Influencers effectively assist brands in showcasing brand values, gaining exposure, building trust, and ultimately generating sales. It is vital for content creators to understand that they are not just a marketing tool, rather, influencers are a pivotal business resource for brands. Indeed, content creators are a brand and a business in their own right.
All businesses, including influencers, have legal responsibilities. Content creators are subject to the same laws as larger corporations. Therefore, it is critical for influencers to recognize business obligations to avoid legal pitfalls. This article will discuss the three most common mistakes content creators make and how to avoid them.
Influencer Issue Number One: Copyright Infringement
Influencers often use trending music, images, and videos in posts. While some materials may be available for free public use, many are protected by copyright law, requiring permission from the copyright holder. Improper use of music, images, or videos can cost content creators thousands of dollars.
Copyrights are a specific type of intellectual property right over an original work of authorship, providing the creator with the exclusive right to reproduce, distribute, adapt, and publicly display the work. 17 U.S. Code § 101. Copyrights protect music, images, videos, and tangible, creative expressions of ideas. Improper understanding of copyright law can create major legal issues for influencers.
Music
Influencers commonly utilize music in content creation. But improper use of music, such as in an Instagram “reel,” can be a costly mistake. For example, while influencers can use “suggested music” on Meta’s Instagram, they cannot utilize “suggested music” in posts that were created as paid partnerships with brands. This is because Meta’s music library includes both royalty-free music and music which requires a licensing agreement with the copyright holder. Thus, while a content creator may be able to utilize a song for non-commercial use with no issues, utilization of that same song for a commercial purpose would likely constitute copyright infringement, subjecting the content creator to legal liability, including litigation for copyright infringement and an obligation to financially compensate the copyright holder.
Photos and Videos
Influencers also use photos and videos in content creation. Generally, the copyright holder is the individual who created the image or video or has acquired rights to the image or video from the copyright holder. Influencers frequently assume that image and video content found on the internet is publicly available for use, however, this is usually not the case. Influencers should be careful when utilizing images and videos in posts, taking care not to infringe on the copyright rights of others.
Fair Use
Content creators seeking to grow should seek guidance from an attorney to ensure posts are compliant with copyright law. Copyright law can be challenging, especially in determining whether copyright infringement legally applies or the fair use exception to copyright law. The fair use exception permits use of copyrighted materials under certain circumstances such as use for commentary, criticism, or teaching, amongst other purposes. It is a nuanced area of law that requires a lawyer to effectively provide guidance and help navigate ways to avoid use of one’s work without permission. Lawyers will help content creators effectively navigate these issues at cost-effective rates which in turn will help grow and protect the content creator’s brand through strategic business practices that will avoid unnecessary scandals that could tarnish a content creator’s brand.
Influencer Issue Number Two: Improper Disclosure of Brand Partnerships
Successful influencers create branded content that seems organic because it fosters trust, engagement, and authenticity. However, paid partnerships and advertisements from influencers must follow the same rules which govern advertisements. Both companies and influencers alike have an obligation to advertise truthfully and disclose paid partnerships.
Paid Partnerships
The Federal Trade Commission (FTC) requires influencers to disclose any material connection to a brand, including whether they have received compensation. Compensation includes monetary payment, free products, and other incentives such as revenue sharing or brand ambassadorships. 15 U.S.C. § 45. Failing to make proper disclosures can result in legal action by the FTC, including fines of up to $50,000 for a single violation and forfeiture of profits. Additionally, FTC actions publicly available, tarnishing a content creator’s reputation.
To encourage FTC compliance, most social media platforms also require content creators to disclose paid partnerships via their terms and conditions. Failure to disclose paid partnerships can result in the banning of account handles, which would obviously be crippling to a content creator who relies on that handle to conduct business. Consulting with a lawyer to ensure compliance with basic advertising regulations can help influencers safeguard their hard-earned reputations and account handles.
Misleading or Accidental Misstatements in Brand Promotion
The FTC prohibits deceptive advertising practices under the FTC. These statements also violate the Lanham Act’s strict language against deceptive and false advertising. FDA, USDA, and state consumer protection laws also apply to misleading statements about a product or service.
It is crucial for Content creators to understand what kind of statements they can and cannot make as the FTC does not permit content creators to make bold, unsupported statements for the promotion of products and services. Businesses commonly find themselves in hot water over misleading statements about the effectiveness of diet programs, hair care products (Organix (OGX) multi-million-dollar settlement for mislabeling products as “natural”) and skincare products (Estee Lauder’s false advertising and corrected advertising surrounding its anti-aging products).
Likewise, influencers cannot make unsubstantiated claims about promoted products or services. For example, an influencer cannot say a product is “all natural” unless the company states the product is “all natural” within all proper regulatory guidelines.
While influencers can speak about personal experiences and opinions with products and services, influencers must also ensure statements comport with statements made by the brand. Understanding advertising obligations is critical for a successful career in content creation, as influencers are fully liable for FTC violations and will be held accountable by each social media platform for any terms and conditions violations. Consulting with a lawyer can help influencers understand these laws and comply with platform terms and governing agencies.
Influencer Issue Number Three: Working Without a Proper Contract
Successful influencers have strong contracts. Contracts are crucial because they provide a clear, legally enforceable framework for agreements between parties. They protect the interests of all parties involved and establish mutual obligations, reducing the likelihood of disputes. Relying on invoice transactions, emails, or text message communications as a contract will inevitably damage your business and cost you thousands of dollars.
Additionally, content creators should be mindful about signing agency contracts without a lawyer. Agency contracts tend to be extremely one-sided, providing agencies with exclusive rights to content with little to no recourse for influencers in the event of a breach or a reputational emergency.
Content creators should specifically consider clauses regarding ownership of content, payment terms, non-disparagement, and jurisdiction in the event of a breach. For more information, please check out our article on contract considerations for influencers.
Influencers are Business Owners
Influencers are online business owners, and all business owners must protect intellectual property, follow FTC guidelines, and have strong contracts to ensure success. Any dispute over poor business practices, intellectual property, or transparency has the potential to completely destroy your business. By working with a lawyer, content creators can better navigate legal landmines, avoid accidental missteps, and increase revenue opportunities by focusing on what they do best: driving consumer attention to brand partnerships.
If you are a content creator and you are interested in learning what a lawyer can do to help you protect and scale your brand, contact Ali Arko ala@kjk.com or Hannah Albion hra@kjk.com, or schedule a consultation by calling us at 216.716.5631. Be sure to ask for more information about our Influencer Turnkey Package program.