Social media influencing is an estimated $30 billion annual global industry, with brands increasingly electing to partner with influencers over traditional marketing channels.
But, while social media and influencer marketing is as prevalent as ever, a recent putative class action lawsuit seeking $50 million from Revolve reminds companies and influencers of the importance of disclosing material connections with respect to their influencer marketing and advertising practices.
InNegreanu v. Revolve Group, et. Al.No. 2:25-cv-03186 (C.D. Cal.), the lead plaintiff (on behalf of herself and other similarly situated consumers) claims that Revolve allowed influencer endorsements to be posted on social media without adequately disclosing the relationship with Revolve, and that this alleged omission misled customers into purchasing products that they would not have if they had known about the undisclosed relationship.
FTC Guidance Requires Disclosure of Influencer Relationships
In light of explosive industry growth over the last 5-10 years, the FTC has issued various guidance for disclosing influencer relationships, requiring any material connection, which includes, for example, payment or free products, to be clearly and conspicuously disclosed whenever making an endorsement, including social media posts. The FTC’s guidance states that these disclosures, e.g., #ad or #sponsored, should appearbeforea consumer has to click any link, including the “more” button in Instagram captions.
Revolve Complaint Alleges Company and Influencers Failed to Disclose their Relationship
In the Revolve complaint, the alleged class includes every purchaser of Revolve products in the U.S. from March 2021 through present. The complaint alleges that the defendants failed to adequately disclose that influencers were compensated by Revolve in violation of theFTC Act, 15 U.S.C. § 45(a).
The list of defendants includes not just Revolve Group, Inc., FWRD LLC,Alliance Apparel, and other related entities (collectively, “Revolve”), but also individual influencers. The complaint also claims that Negreanu and Revolve shoppers nationwide believed the undisclosed endorsements were honest and uncompensated reviews, which induced shoppers to pay “a premium” for products that “proved to be of a lower value than the price paid,” and the plaintiffs believe the “difference in price can be attributed exclusively to the undisclosed endorsements.”
Rise in Consumer Class Actions Alleging Undisclosed Influencer Relationships
The Revolve class action lawsuit was filed on the heels of two other recent filings with similar allegations, against the companies Celsius (Dubreu v. Celsius Holdings, Inc. et al.No. 5:25-cv-00180 (C.D. Cal., Jan. 22, 2025) and Shein (Begochei et al. v. eaters al.No. 1:25-cv-01402 (N.D. Ill., Feb. 10, 2025), along with their undisclosed influencer partners. These lawsuits, which together seek nearly $1 billion in damages, underscore how important it is for businesses to understand the FTC Act and the responsibilities of both the companies and their advertisers regarding their social media posts and influencer marketing, even amid general shifts in FTC enforcement priorities.
We previously flagged a failure to adequately disclose material connections as a way in which a company can face liability in connection with social media. For other ways in which your social media presence could create liability for your business, see our earlieralerton the topic.
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