Influencer marketing is booming, with global spending expected to hit around $32.5 billion this year. But as the industry grows, so do the legal risks for both content creators and the brands that work with them. Recent high-profile cases have shown just how costly these legal battles can be, often involving huge sums of money.
The main legal issues influencers and brands face fall into three areas: copyright infringement, defamation, and failure to properly disclose sponsorships.
Copyright problems are the most common and expensive. This is especially true for short videos on platforms like TikTok and Instagram Reels, where popular music and visuals play a big part in the content. For example, Warner Music Group recently sued Designer Shoe Warehouse (DSW). The complaint says DSW used over 200 copyrighted songs in influencer videos without getting permission. If Warner wins, DSW could owe up to $150,000 per song, adding up to more than $30 million.
Chris Cooper, senior vice president at QBE North America, explains the issue with music use. Social media platforms have broad licenses for personal use, like TikTok dances, but these don’t cover commercial content made for brands. So if influencers use trending songs without proper clearance, it’s a copyright violation. To avoid this, brands and influencers should use only songs from official commercial-use libraries and make sure no copyrighted artwork shows up in videos. Cooper even cautions against having famous art like Andy Warhol prints in the background, saying it may not look great but it can prevent legal trouble.
Defamation is another concern, especially when influencers go off script. If they make false claims about competitors, that could spark legal action. Earlier this year, an influencer named Avery Cyrus was sued by her former manager for allegedly making damaging statements during a TikTok livestream. This case shows how quickly casual remarks can turn into lawsuits. Cooper suggests brands provide training for influencers to avoid such risks and discourage content that criticizes competitors.
Disclosure of sponsorships is also a major focus, with the Federal Trade Commission (FTC) stepping up enforcement. Influencers have to clearly say when they’re paid or given products for free, but many don’t. People often think only money counts, but even free items need to be disclosed. Courts are starting to crack down on vague or hidden sponsorship disclosures. For instance, class actions have been filed in California against brands like Celsius, Shein, and Revolve, accusing them and their influencers of burying or making disclosure hashtags hard to read. These cases seek hundreds of millions in damages.
Insurance plays a big role in handling these risks. According to Cooper, brands often find out too late that their influencers don’t have insurance to cover legal claims. QBE created a special influencer marketing policy after seeing many last-minute legal defenses. Without coverage, brands can end up paying for lawsuits themselves.
Choosing the right influencers is important too. Cooper advises brands to align influencer content with their values. For example, a brand focused on family-friendly products should pick influencers with similar audiences and content. Working with someone just because they’re popular could lead to problems if their tone doesn’t match the brand.
As influencer marketing grows, understanding and managing these risks will be key for brands and creators alike. Keeping music, messaging, and disclosures clean can save a lot of trouble down the road.