Compliance & Legal

Understand legal requirements, FTC guidelines, brand safety, and best practices for compliant influencer marketing.

Table of Contents

  1. FTC Disclosure Requirements
  2. Brand Safety
  3. Contracts & Agreements

FTC Disclosure Requirements

Overview of FTC Guidelines

The Federal Trade Commission (FTC) requires clear disclosure of material connections between brands and creators. Both brands and creators are responsible for compliance.

Key Principle: If there's a material connection between a creator and a brand that could affect how people evaluate the endorsement, it must be clearly disclosed.

Material Connection Includes:

  • Payment for content
  • Free products
  • Discounts or special deals
  • Employment or business relationship
  • Family relationship
  • Any other consideration

Your Responsibilities as a Brand

Brand Obligations:

  • Educate creators about disclosure requirements
  • Include disclosure requirements in contracts
  • Provide clear guidance on compliant disclosure
  • Monitor creator content for compliance
  • Have a process to address non-compliance
  • Maintain records of instructions given

You Can Be Held Liable If:

  • You don't instruct creators to disclose
  • You instruct creators to hide the relationship
  • You're aware of non-disclosure and don't address it
  • You create incentives that discourage disclosure

Disclosure Requirements for Sponsored Content

When Disclosure Is Required:

  • Any paid partnership
  • Free products provided
  • Affiliate links used
  • Any compensation received
  • Special access or perks given

When Disclosure May Not Be Required:

  • Unpaid, unsolicited reviews
  • Creator purchased product themselves
  • No material connection exists
  • General industry expertise (not specific to your brand)

Proper Disclosure Formats

Platform-Specific Guidelines:

Instagram:

  • Use built-in "Paid Partnership" tag (best practice)
  • Or clear disclosure in caption
  • Must be visible without "more" click
  • #ad or #sponsored at beginning of caption
  • Not acceptable: buried in hashtags, unclear language

Good Examples:

"Paid partnership with @BrandName"
"#ad I'm excited to partner with @BrandName..."
"Sponsored: Check out this amazing product from @BrandName"

Bad Examples:

"Thanks @BrandName!" (ambiguous)
"... [20 hashtags] #partner #ad" (buried)
"sp" or "spon" (not clear enough)

YouTube:

  • Check "Includes paid promotion" box (required)
  • Verbal disclosure in video (recommended)
  • Written disclosure in description (required)
  • Should be in first 3 lines of description
  • Clear and conspicuous

Good Examples:

Verbal: "This video is sponsored by BrandName"
Description: "This video is sponsored by BrandName. All opinions are my own."

TikTok:

  • Use "Paid Partnership" label (toggle in settings)
  • Clear disclosure in caption or video
  • Verbal mention recommended
  • Visible without clicking

Good Examples:

"#ad Check out this product from @BrandName!"
Verbal in video: "Thanks to BrandName for sponsoring this video"

Blog/Website:

  • Clear disclosure before or at beginning of post
  • Not buried in footer or sidebar
  • Specific to the content
  • Clear and conspicuous

Good Example:

"Disclosure: This post is sponsored by BrandName. I received compensation
for writing this review. All opinions are my own."

International Considerations

Different Countries, Different Rules:

United Kingdom (ASA Guidelines):

  • Use #ad prominently
  • Must be upfront and unmistakable
  • "Ad" or "Advertisement" clearly stated

European Union (GDPR Considerations):

  • Clear disclosure required
  • Different rules by country
  • Consult local regulations

Canada (Ad Standards):

  • Similar to FTC
  • Clear and prominent disclosure
  • Material connection must be disclosed

Australia (AANA Code):

  • Clearly distinguishable as advertising
  • Multiple clear indicators
  • Unambiguous language

Your Responsibility: Know the rules in markets where:

  • Your brand operates
  • Creators are located
  • Target audiences are located

Brand Safety

Content Approval Processes

Establish Clear Review Process:

Step 1: Initial Brief

  • Clear brand guidelines
  • Prohibited content list
  • Brand safety standards
  • Examples of good/bad content

Step 2: Pre-Production Review

  • Review creator's content plan/script
  • Approve concept before production
  • Catch issues early
  • Provide feedback

Step 3: Content Submission

  • Creator submits draft
  • Full review against guidelines
  • Check brand safety
  • Verify compliance

Step 4: Revision (if needed)

  • Clear, specific feedback
  • Constructive criticism
  • Reasonable requests only
  • Fast turnaround

Step 5: Final Approval

  • Confirm all requirements met
  • Final brand safety check
  • Approve for publication
  • Document approval

Brand Safety Guidelines

Create Comprehensive Guidelines:

Content Standards:

  • Appropriate language (no profanity, hate speech)
  • Suitable imagery (no violence, sexual content)
  • Positive brand representation
  • Accurate information
  • Authentic presentation

Prohibited Content:

  • Illegal activities
  • Dangerous behaviors
  • Discriminatory content
  • Misleading information
  • Controversial political/religious content
  • Competitive products
  • Inappropriate contexts

Example Brand Safety Checklist:

☑ No profanity or offensive language
☑ No controversial or polarizing topics
☑ No alcohol, tobacco, or drug references
☑ Appropriate for all ages (or specified age group)
☑ FTC disclosure present and compliant
☑ Product shown accurately
☑ Brand name/logo used correctly
☑ No false claims made
☑ Competitors not mentioned
☑ Safe environment/context
☑ Aligns with brand values

Dealing with Problematic Content

If Creator Posts Non-Compliant Content:

Immediate Actions:

  1. Contact creator immediately
  2. Request correction or removal
  3. Document the issue
  4. Assess damage
  5. Take corrective action

Correction Options:

  • Add proper FTC disclosure
  • Remove false claims
  • Update misleading information
  • Re-edit problematic sections
  • In severe cases: request removal

Your Rights:

  • Most contracts allow brand approval
  • Can withhold payment for non-compliant content
  • Can request revisions
  • Can terminate agreement in severe cases

Example Issue Resolution:

Issue: Creator posted without FTC disclosure

Response:
"Hi [Creator], 

We noticed the sponsored content was published without the required #ad
disclosure. Per FTC guidelines and our agreement, this needs to be added
immediately.

Can you please update the caption to include #ad at the beginning? This is
required by law and protects both of us.

Please make this change within 24 hours and send confirmation.

Thanks for your quick action on this."

Crisis Management

Prepare for Issues:

Potential Crisis Scenarios:

  • Creator involved in scandal
  • Content receives major backlash
  • Product issue goes viral
  • Misinformation spreads
  • Creator makes controversial statement
  • Platform removes content

Crisis Response Plan:

1. Monitor:

  • Set up social listening
  • Track brand mentions
  • Watch creator content
  • Monitor comments

2. Assess:

  • Evaluate severity
  • Determine impact
  • Identify stakeholders
  • Plan response

3. Respond:

  • Act quickly but thoughtfully
  • Be transparent
  • Take responsibility if appropriate
  • Correct misinformation
  • Communicate with creator

4. Resolve:

  • Address the issue
  • Make necessary changes
  • Prevent future occurrences
  • Document learnings

Creator Vetting

Pre-Partnership Screening:

Check:

  • Past content (12+ months)
  • Controversy history
  • Audience sentiment
  • Brand safety track record
  • Competitor relationships
  • Professional reputation

Red Flags:

  • History of controversies
  • Negative audience sentiment
  • Inconsistent content quality
  • Poor brand safety practices
  • Frequent FTC violations
  • Unprofessional behavior

Background Research:

  • Google their name + "controversy"
  • Read recent comments on their content
  • Check review sites
  • Industry reputation
  • Past brand partnerships
  • Professional references

Risk Assessment:

Low Risk:
- Established, professional creator
- Clean track record
- Brand-safe content
- FTC compliant
- Good reputation

Medium Risk:
- Some minor issues
- Addressable concerns
- Moderate vetting needed
- Extra oversight required

High Risk:
- Controversial history
- Frequent violations
- Poor reputation
- Brand safety concerns
- Probably avoid

Contracts & Agreements

Platform Agreements

Flexilocus Terms of Service:

  • Governs platform use
  • Defines responsibilities
  • Sets dispute resolution process
  • Outlines acceptable use
  • Describes limitations

Your Obligations:

  • Comply with terms
  • Treat creators professionally
  • Pay as agreed (where applicable)
  • Don't misuse platform
  • Follow community guidelines

Creator Obligations:

  • Deliver agreed content
  • Meet deadlines
  • Comply with FTC rules
  • Maintain quality standards
  • Professional conduct

Collaboration Agreements

Formal Agreements in Flexilocus:

Proposal = Contract:

  • Accepted proposal forms binding agreement
  • Terms clearly specified
  • Both parties agree
  • Platform facilitates
  • Enforceable

Key Contract Terms:

  • Deliverables specified
  • Compensation defined
  • Timeline established
  • Usage rights granted
  • Revision policy stated
  • Termination conditions

What's Legally Binding:

  • Accepted proposals
  • Written agreements in chat
  • Terms explicitly stated
  • Mutual agreement

Not Binding:

  • Preliminary discussions
  • Unaccepted proposals
  • Vague statements
  • Implied agreements

Usage Rights Documentation

Clearly Document Rights:

In Every Agreement, Specify:

  • What content brand can use
  • Which platforms brand can use it on
  • How long brand can use it (duration)
  • Geographic limitations (if any)
  • Whether editing is allowed
  • Attribution requirements
  • Exclusivity (if applicable)

Example Usage Rights Clause:

USAGE RIGHTS:

Grant: Creator grants Brand non-exclusive rights to use the Content as follows:

1. Organic Social Media: Brand may share Content on Brand's Instagram,
   Facebook, Twitter, and LinkedIn accounts for 12 months from publication date.

2. Website: Brand may display Content on Brand's website for 12 months.

3. Email Marketing: Brand may include Content in email campaigns for 6 months.

4. Paid Advertising: Additional compensation of $3,000 grants Brand right to
   use Content in paid advertising on social platforms for 6 months.

Restrictions:
- Brand may not edit Content without Creator's written approval
- Brand must credit Creator when sharing ("@CreatorHandle")
- FTC disclosures must remain intact
- Content remains on Creator's channel permanently

Creator retains all copyrights and ownership of Content.

Payment Terms

Clear Payment Agreements:

Define:

  • Total compensation
  • Payment schedule (upon acceptance, upon publication, net 30, etc.)
  • Payment method
  • Currency
  • Invoice requirements
  • Late payment penalties

Common Payment Structures:

Upon Publication:

Creator receives full payment within 30 days of content going live.

Milestone-Based:

- 50% upon agreement
- 50% upon publication

Performance-Based:

- Base fee: $2,000 (upon publication)
- Bonus: $500 if content reaches 100K views in 30 days
- Bonus: $1,000 if content generates 100+ conversions

Example Payment Terms:

PAYMENT TERMS:

Total Compensation: $5,000

Payment Schedule:
Brand will pay Creator the full amount of $5,000 within 30 days of content
publication, subject to content meeting all requirements outlined in this agreement.

Payment Method:
Payment will be made via [Bank Transfer / PayPal / Other] to Creator's provided
account information.

Invoice:
Creator will provide invoice to Brand upon content publication.

Late Payment:
Payments not made within 45 days will incur 5% late fee.

Dispute Resolution

If Issues Arise:

Step 1: Direct Communication

  • Discuss issue with creator
  • Try to resolve amicably
  • Document conversation
  • Seek middle ground

Step 2: Platform Mediation

  • Contact Flexilocus support
  • Request mediation
  • Provide documentation
  • Follow platform guidance

Step 3: Formal Dispute

  • If unresolved, may require legal action
  • Consult attorney
  • Review contract terms
  • Gather evidence

Prevent Disputes:

  • Clear contracts upfront
  • Document everything
  • Communicate regularly
  • Address issues early
  • Be professional and fair

Intellectual Property

Understanding IP Rights:

Creator Owns:

  • Original content created
  • Creative expression
  • Copyright by default
  • Personal brand/likeness

Brand Receives:

  • Usage rights (as specified)
  • License to use content
  • Not ownership (unless bought out)
  • Limited by agreement

Your Product:

  • You own your product/brand
  • Creator licenses right to feature
  • Creator can't claim ownership
  • Clear in agreement

Example IP Clause:

INTELLECTUAL PROPERTY:

1. Creator Ownership:
   Creator retains all rights, title, and interest in and to the Content,
   including all copyrights.

2. License Grant:
   Creator grants Brand a non-exclusive, worldwide license to use the Content
   as specified in the Usage Rights section.

3. Brand Property:
   Brand retains all rights to its trademarks, logos, products, and brand
   materials provided to Creator.

4. Creator Use:
   Creator may use Brand's trademarks and materials solely for creating the
   Content as specified in this agreement.

5. Portfolio Use:
   Creator may display Content in Creator's portfolio and use for self-promotion.

Best Practices

Legal Compliance

Stay Compliant:

  • Know FTC rules
  • Educate your team
  • Brief every creator
  • Monitor content
  • Keep records
  • Stay updated on regulations

Documentation:

  • Save all contracts
  • Keep communication records
  • Document approvals
  • Store creator agreements
  • Maintain compliance records

Ethical Partnerships

Build Trust:

  • Be transparent
  • Honor agreements
  • Pay promptly
  • Respect creative rights
  • Fair treatment
  • Professional conduct

Protecting Your Brand

Risk Management:

  • Vet creators thoroughly
  • Clear contracts
  • Monitor content
  • Brand safety guidelines
  • Crisis response plan
  • Legal counsel when needed

Resources

Helpful Links

FTC Guidelines:

  • FTC Endorsement Guides: ftc.gov/endorsement-guides
  • FTC Business Guidance: ftc.gov/business-guidance
  • Disclosures 101 for Social Media: ftc.gov/disclosures

Industry Organizations:

  • Word of Mouth Marketing Association (WOMMA)
  • Influencer Marketing Association
  • American Advertising Federation

Legal Resources:

  • Consult with advertising attorney
  • Review platform-specific policies
  • Stay updated on regulations

Next Steps

Compliance protects both you and creators. When in doubt, consult legal counsel and err on the side of transparency.