On September 8, LeBron James posted a video to X promoting Polymarket. The caption ended with the words “In partnership with Polymarket,” placed after a joke and a string of emojis. Within hours, other users appended a Community Note pointing out that X’s policy calls for the platform’s official Paid Partnership label rather than caption text alone. The post has since drawn well over fifteen million views.
Whether that particular post crossed a line is a fact-specific question, and a Community Note is not a regulatory finding. But it shows the trap clearly. A sponsored post answers to two sets of rules at the same time. The platform decides what you have to click. The Federal Trade Commission decides what your audience has to understand. Satisfying one does not satisfy the other, and both the creator and the brand can be held to both.
What X Requires
X treats a post as a paid partnership whenever a brand gives you something of value for it. That includes cash, free or gifted product, commissions earned through an affiliate link or discount code, and ambassador arrangements. Gifted product counts even when no one told you what to say about it.
The requirement itself is mechanical. If a paid partnership is published as an ordinary post, the Paid Partnership disclosure has to be switched on in the Content Disclosure settings, and X then applies the label automatically. A hashtag buried in the caption is not a substitute for the toggle.
Enforcement is not limited to the creator. X can require post removal, place an account in read-only mode, suspend accounts whose sole purpose is violating the policy, and take action against the official brand or sponsor for repeated violations. A brand whose creators skip the toggle is putting its own account at risk.
What the FTC Requires
The FTC asks a different question. Not whether you used a particular feature, but whether the audience actually got the message. Where a connection between the endorser and the seller might materially affect how much weight the audience gives the endorsement, and the audience would not already expect that connection, it has to be disclosed clearly and conspicuously.
The Guides define that phrase. A disclosure has to be difficult to miss and easily understandable to ordinary consumers. If the pitch is visual, the disclosure has to appear in the visual portion; if it is spoken, in the audio; if both, in both. On social media it has to be unavoidable, and nothing else in the post can undercut it.
Three consequences follow, and each one has a familiar shortcut behind it. A disclosure the viewer has to tap “more” to see is not unavoidable, which puts any disclosure sitting at the end of a long caption at risk. Relying only on a platform label can fail where the label is small, briefly displayed, or competing with other text on screen, so the toggle is a floor rather than a defense. And a paid video post featuring a well-known athlete is an endorsement whenever viewers can identify the brand, even if the athlete never says a word about the product. Staying quiet is not a shield.
Both Sides Are Exposed
The most common misunderstanding on each side of these deals is that the risk sits with the other one. It does not.
Creators can be liable in their own right for failing to disclose a material connection. Brands can be liable for the same failure, and the Guides expect them to give creators guidance, monitor what actually gets posted, and fix problems when they surface. The Commission is explicit that doing so is not a safe harbor, only a way to improve the odds. Agencies and other intermediaries can be liable for hiring and directing creators who do not disclose. And a brand that reposts a creator’s endorsement needs its own disclosure if the original one does not carry through.
That the law reaches both sides does not mean a contract will divide the loss evenly. Most influencer agreements contain an indemnity, and it usually runs one direction. If the brand controls the script, the format, and where the disclosure goes, a creator should not be absorbing the cost of a disclosure failure the brand designed.
Categories That Carry Extra Risk
Gambling, crypto, and financial products draw more scrutiny than most, and the rules are not uniform. X places financial products and gambling on its prohibited list only for Australia, the European Union, and the United Kingdom, not globally, so a category that is off limits for one audience may be permitted for another. Anyone working in these areas should check the live policy before signing.
Prediction markets are the current example. A suit filed in June against Polymarket in the District of Columbia names not only the companies but the chief executive and the chief marketing officer personally, alleging that paid creators posted without disclosing the payments and that others filmed winning bets on a simulated copy of the platform. The allegations are unproven. The lesson for both sides of a deal is that in a category already under a microscope, a disclosure problem rarely stays a disclosure problem. Several state gaming regulators separately treat these products as unlicensed wagering, which is a different exposure again.
If You Are the Creator
- Ask what you are actually receiving. Free product, an affiliate code, early access, and a chance at future work are all material connections. Payment is not the only trigger.
- Use the toggle and say it anyway. Turn on the Paid Partnership label and put a plain disclosure in the content itself.
- Put it early and put it on screen. Before the caption truncates, and for video, in the video rather than only underneath it.
- Read the indemnity before you sign. Know whether you are agreeing to cover the brand for a disclosure failure, and negotiate it where the brand controls the creative.
- Keep the brand’s instructions. If a dispute arises, what you were told to do matters.
If You Are the Brand
- Write the disclosure into the contract. A clause requiring the creator to “comply with FTC guidelines” offers little protection. Specify the language, the placement, and the platform tools.
- Require both. The native label and an in-content disclosure above the truncation point, in the visual portion for video.
- Monitor and keep records. Guidance, monitoring, and remediation are what the Guides contemplate, and contemporaneous records are what make them worth something later.
- Screen the category and the market. Platform rules vary by country, and state regulators may view the underlying product differently than federal ones do.
- Handle your own reposts. Amplifying creator content carries its own disclosure obligation.
The distance between a compliant post and a noncompliant one is usually a few seconds of attention at the moment of publishing. What makes it worth attention in advance is that when it goes wrong, it goes wrong for everyone whose name is on the deal.
Contact
For questions concerning social media platforms and their content policies, or for review of sponsorship agreements and content contracts, please contact KJK eCommerce attorneys Kyle Stroup (KDS@kjk.com) or Alex Jones (AEJ@kjk.com).