Revolve, a Los Angeles-based fashion retailer that curates apparel and accessories for millennial and Gen Z consumers, is facing a $50M lawsuit alleging that the brand's social media marketing tactics deceived at least one million consumers by operating an advertising scheme in which influencers disguised paid product endorsements as genuine recommendations in order to boost the company's sales.
The lawsuit claims that for many years, the company “used its position, payments, and free merchandise to entice influencers to endorse and promote its products while failing to disclose any material relationship with the brand.”
Lead plaintiff Ligia Negreanu said that if she had known the influencers' posts were sponsored, she would not have purchased products at the prices she paid, which were at times up to 40% higher than those of other retailers selling the same items.
Okay, I understand the lawsuit over lack of paid influencer disclosure (which is against the law), but how did that impact whether Negreanu decided on her own free will to purchase items at a higher cost on Revolve? She could've just enjoyed the video from the influencer, learned about a new product, and bought it elsewhere.
Apparently she was too dumb innocent to understand that influencers have incentive to create videos about products, but then suddenly developed such an acute understanding of the industry that she's able to spearhead a class-action lawsuit over the matter. Smells like a money grab to me.
That being said, companies have a responsibility to follow FTC guidelines when working with affiliates.
Kimberly DeCarrera of Springboard Legal wrote:
“The responsibility for proper disclosures isn’t just on the influencer. In fact, the brand has a very big part in the disclosures. Brands, like Revolve, should be educating their influencers, ambassadors, and affiliates, to ensure that they are aware of the disclosure requirements… While it is not required that they monitor 100% of the posts and catch every time that a disclosure isn’t made properly, every brand should have a habit of regularly reviewing and enforcing disclosure requirements.”
DeCarrera went on to note that In the lawsuit, the plaintiffs allege that Revolve not only abdicated this responsibility, they actively tried to avoid disclosure and create a marketing campaign that didn't comply with the law — being not just negligent, but intentionally deceptive to increase clicks and purchases.