Paid Partnership Problems: Uptick In Influencer Class Actions And NAD Scrutiny

As influencer marketing continues to dominate social media, the legal risks are catching up. In two recent class action lawsuits, companies and their social media influencers are facing allegations of deceptive advertising. Viewed in conjunction with a string of decisions coming out of the National Advertising Division (NAD), these cases reflect a trend of increasing scrutiny around influencer promotion and the question of whether consumers are being properly informed of these partnerships.

One class action complaint filed in California federal court, Dubreu v. Celsius Holdings, Inc. et al.,involves claims against an energy drink company. The complaint also names three of the brand's influencers as defendants. The lawsuit alleges that the influencers violated federal and state law by promoting the company's products on social media without properly disclosing that they were paid by the brand.