False Influencing

• Published date: 01 October 2020
• Date: 01 October 2020

False Inf‌luencing

ALEXANDRA J. ROBERTS*

TABLE OF CONTENTS

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

I. INFLUENCER MARKETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

A. WHAT INFLUENCER MARKETING IS . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

B. HOW INFLUENCER MARKETING WORKS . . . . . . . . . . . . . . . . . . . . . . . 93

C. WHY INFLUENCER MARKETING SUCCEEDS . . . . . . . . . . . . . . . . . . . . . 96

D. WHEN INFLUENCER MARKETING HARMS. . . . . . . . . . . . . . . . . . . . . . . 98

II. FALSE INFLUENCING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

A. LANHAM ACT FALSE ADVERTISING . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

B. COMMERCIAL ADVERTISING OR PROMOTION . . . . . . . . . . . . . . . . . . . 103

C. FALSITY................................................ 107

1. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

2. Explicit False or Misleading Statements . . . . . . . . . . . . . 110

3. False or Misleading Visual Representations . . . . . . . . . . 112

4. False or Misleading Testimonials . . . . . . . . . . . . . . . . . . 114

5. Nondisclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

D. MATERIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

III. COMPLICATIONS AND APPLICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

A. LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

* Professor, University of New Hampshire Franklin Pierce School of Law; Fellow, Yale Law School

Information Society Project. © 2020, Alexandra J. Roberts. Thanks to Suneal Bedi, Roger Ford, Eric

Goldman, Jake Linford, Jess Miers, Elise Romberger, Zahr Said, Rebecca Tushnet, Julie Zerbo, and

participants in the 2019 Junior IP Scholars Association Workshop at GW School of Law, IP Scholars

Conference, American University School of Law Trademark Roundtable, Florida State University College

of Law IP Seminar, and University of Michigan IP Workshop for helpful feedback and to Ji Hye Hwang,

Derek Kaufman, Elise Romberger, Bailey Sanchez, Tabita Saraj, and the UNH Law librarians for research

assistance. Thanks also to the attorneys and inf‌luencer agents who shared sample agreements and to Federal

Trade Commission (FTC) Commissioner Rebecca Kelly Slaughter and FTC Attorney Mariel Goetz for

informative discussions. Thanks to Nicholson Price for support and accountability. Finally, thanks to the

members of The Georgetown Law Journal for their expert edits and enthusiasm.

81

B. CHALLENGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133

C. ALTERNATIVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

INTRODUCTION

Kendall Jenner launched Fyre Festival with a single post

1

to her more than

70 million Instagram followers

2

:

Fyre’s founders paid the reality star and model a cool $275,000 for the post,

3

which—as they boasted to investors—amassed 6 million unique impressions in

the f‌irst f‌ive weeks, driving “an exponential leap in website views and ticket pur-

chases.”

4

The festival would turn out to be an epic failure, marooning tickethold-

ers on an island without food or shelter, let alone entertainment from Jenner’s

1. See Kendall Jenner, Emily Ratajkowski, & Other Celebs Are Being Sued for Promoting Fyre

Festival, SPIN SOUTHWEST (Sept. 2, 2019, 10:40 AM), https://www.spinsouthwest.com/celeb/kendall-

jenner-emily-ratajkowski-celebs-sued-promoting-fyre-festival-900150 [https://perma.cc/SG5B-MV3K].

2. See Meet the 50 Top Instagram Inf‌luencers of 2016, IZEA (Jan. 10, 2017), https://izea.com/2017/

01/10/top-instagram-inf‌luencers-2016/#:�:text=5.,fashion%20model%3A%2071.8M%20followers

[https://perma.cc/QKF4-AARP].

3. Complaint at 19, Messer v. Jenner (In re Fyre Festival LLC), No. 17-11883 (MG) (Bankr. S.D.N.Y.

Aug. 28, 2019).

4. Nick Bilton, Exclusive: The Leaked Fyre Festival Pitch Deck Is Beyond Parody, VANITY FAIR

(May 1, 2017), https://www.vanityfair.com/news/2017/05/fyre-festival-pitch-deck [https://perma.cc/

3M87-5E7L] (slide 7).

82 THE GEORGETOWN LAW JOURNAL [Vol. 109:81

“G.O.O.D. Music Family.”

5

Although the festival organizers were primarily at

fault, and Fyre CEO Billy McFarland is currently serving concurrent prison terms

for fraud and was ordered to pay $26 million in forfeiture,

6

the company’s use of

“inf‌luencer marketing”—sponsored content that personalities with thousands or

millions of followers post to their social media feeds—played an exquisitely effec-

tive role in perpetuating that fraud. This Article advocates for private companies

to sue under Section 43(a)(1)(B) of the Lanham Act

7

when competitors engage in

“false inf‌luencing”—by disseminating deceptive claims via inf‌luencers—as Fyre

did through its partnership with Jenner.

8

Inf‌luencer advertising has enjoyed a meteoric rise. The industry is projected to

reach $10–20 billion in 2020,

9

with close to 80% of brands participating.

10

Consumers follow inf‌luencers on social media, engage with the content

they post,

11

and buy what they endorse,

12

trusting the inf‌luencers they follow as

5. See Christina Prignano, The Fyre Festival in the Caribbean Has Turned into a Disaster, BOS.

GLOBE (Apr. 28, 2017, 12:01 PM), https://www.bostonglobe.com/arts/music/2017/04/28/this-high-end-

music-festival-carribean-has-turned-into-disaster/LIO2WDk5sgvjd90hiqM87O/story.html.

6. One of the prison terms was for an unrelated ticket-fraud scheme. Doha Madani, Fyre Festival

Organizer Billy McFarland Sentenced to 6 Years on Fraud Charges, NBC NEWS (Oct. 11, 2018, 5:13

PM), https://www.nbcnews.com/news/us-news/fyre-festival-organizer-billy-mcfarland-sentenced-6-years-

fraud-charges-n919086 [https://perma.cc/J46D-XVJR].

7. 15 U.S.C. § 1125(a)(1)(B) (2018).

8. A recent lawsuit alleged Jenner and other celebrities intentionally misled consumers about Fyre

Festival and promoted the event without disclosing they were paid to do so in violation of FTC

guidelines. Complaint, supra note 3, at 10, 19–20; Complaint at 9–10, 19, Messer v. DNA Model

Mgmt., LLC (In re Fyre Festival LLC), No. 17-11883 (MG) (Bankr. S.D.N.Y. Aug. 28, 2019). The story

of Fyre Festival is unlikely to give rise to the type of litigation this Article urges competitors to pursue; it

is included here only as an example of the ubiquity and power of inf‌luencer marketing.

9. Industry insiders report an impressive upward trajectory for the industry, with valuations

jumping from $1.7 billion in 2016 to a projected $6.5 billion in 2019 and $10–20 billion in 2020.

INFLUENCER MARKETING HUB, INFLUENCER MARKETING BENCHMARK REPORT 2020, at 7 (2020),

https://inf‌luencermarketinghub.com/Inf‌luencer_Marketing_Benchmark_Report_2020.pdf [https://

perma.cc/W6P2-3LPV]; Nathaniel J. Evans, Joe Phua, Jay Lim & Hyoyeun Jun, Disclosing Instagram

Inf‌luencer Advertising: The Effects of Disclosure Language on Advertising Recognition, Attitudes,

and Behavioral Intent, 17 J. INTERACTIVE ADVERT. 138, 139 (2017); Inf‌luencers: Frauds or the Future

of Online Commerce?, at 08:41–08:45, ATLANTIC: CRAZY/GENIUS (June 6, 2019), https://www.

theatlantic.com/ideas/archive/2019/06/inf‌luencers-frauds-or-the-future-of-online-commerce/591133.

According to a study from the Association of National Advertisers and PQ Media, brand spending on

inf‌luencer marketing is expected to hit $101 billion by 2020. Cara Kelly, Fyre Festival to Fashion

Week, How Do Instagram Inf‌luencers Make So Much Money?, USA TODAY (Feb. 13, 2019, 4:44 PM),

https://www.usatoday.com/story/news/investigations/2019/02/12/instagram-youtube-inf‌luencer-rates-fyre-

festival-fashion-week-money-rich-branding-ads-girls/2787560002/ [https://perma.cc/WHG5-9LKX].

10. Nearly 80% of brands surveyed intended to earmark a portion of their 2020 marketing budget to

spend on inf‌luencer partnerships. INFLUENCER MARKETING HUB, supra note 9, at 20–21.

11. See Christian Hughes, Vanitha Swaminathan & Gillian Brooks, Driving Brand Engagement

Through Online Social Inf‌luencers: An Empirical Investigation of Sponsored Blogging Campaigns, 83 J.

MARKETING 78, 80 (2019) (def‌ining engagement as a “customer’s cognitive, emotional, and behavioral

activities,” quantif‌iable in the form of “likes and comments on sponsored posts”).

12. A recent study reports that 93% of women who consider themselves “social media-savvy” have

purchased something because an inf‌luencer recommended it. Stefania Pomponi Butler, Social Media

and the Female Holiday Shopper (Infographic), BUSINESS 2 COMMUNITY (Nov. 15, 2012), https://www.

business2community.com/social-media/social-media-and-the-female-holiday-shopper-infographic-0332987

[https://perma.cc/U6QW-JF89].

2020] FALSE INFLUENCING 83