Easy-to-follow dances and eerily accurate deepfakes aren't the only things going viral on social media these days—class action lawsuits over deceptive influencer marketing are starting to trend too.

In just the last six months, courts in the United States have seen a sharp rise in class action filings targeting both influencers and the brands they promote. Most recently, a US$150 million lawsuit was filed against Alo Yoga and several of its influencers. These filings offer valuable insights into how consumers in Canada may follow suit.

As influencer marketing continues to grow in scale and influence, now is the time to ensure your strategy is first in class—not caught up in a class action.

A quick recap: The rules governing influencer marketing

In both Canada and the United States, influencer marketing is subject to the general federal prohibitions against false and misleading advertising.

In Canada, these are set out in Canada’s federal Competition Act. Although the Competition Act does not contain provisions that specifically address influencer marketing, the Competition Bureau (the federal regulator responsible for enforcing the Competition Act) has taken the position that influencer content that promotes a business, product, or service, must disclose any material connection between the brand and the advertiser if one exists.

This is because the Competition Bureau and Ad Standards (Canada’s advertising industry self-regulatory body), take the position that it must be clear to consumers that the influencer is receiving some form of compensation in exchange for the post or review. In other words, influencer marketing becomes problematic when the content is presented as being entirely organic.

It’s therefore critical for influencer content to clearly disclose that the person has been compensated for this content. This can be achieved by using widely recognized hashtags such as #ad, #sponsored, or #XYZ_Partner, by explicitly stating that the content is a paid partnership, or by other methods. Both Ad Standards and the Competition Bureau have published helpful guidelines to assist influencers and brands in navigating these requirements. These resources provide detailed best practices to ensure that disclosures are clear, prominent, and easily understood by consumers.

Very similar rules and regulatory approaches exist in the United States. There, the Federal Trade Commission (FTC), the US equivalent to Canada’s Competition Bureau, has published several guidance documents, including Disclosures 101 for Social Media Influencers as a tool to help ensure compliance with relevant laws.

As is the case in Canada, the guidance available is not binding and it is not considered law; rather, it represents the regulator’s application of the law to this context. While deceptive marketing practices involving influencers have been typically been enforced and investigated by the regulators, consumer class actions are certainly on the rise in the United States.

Understanding the American lawsuits

Until recently, noncompliant influencer marketing was typically the domain of regulatory enforcement action on both sides of the border. That began to change this past January.

So far in 2025, at least five class action lawsuits have been filed in the US against major brands, including Celsius Holdings, a company that produces a range of energy beverages, Revolve Group, an online clothing retailer and, most recently, athleisure apparel brand Alo Yoga.

Celsius Holdings

The first of these class action lawsuits was filed in California in January 2025 against Celsius Holdings and three social media influencers for failing to adequately disclose the material connection between the brand and the influencer. Specifically, the plaintiff on behalf of herself and the proposed class, alleged that:

“[N]one of the influencers use the “paid partnership” label suggested by the FTC or buried a small disclosure so it would be almost impossible for a social media user to discern the fact that the post was sponsored.”

It is worth noting however, that despite omitting the “paid partnership” hashtag, in at least one of the examples provided in the complaint the defendant influencer included the hashtag #Celsiusbrandpartner. In addition to inducing the plaintiff to purchase the Celsius products, according to the complaint, these deceptive marketing practices also explain why the defendant company has been able to price their beverages at roughly 10-15 per cent more than the average energy drink of equal size. 

The proposed class action representative is seeking to represent a nationwide class of consumers who purchased Celsius products in the United States from January 2021 to the present, regardless of whether the purchaser was influenced by or exposed to the advertisement. 

Revolve and Alo Yoga

The lawsuits against Revolve and Alo Yoga feature very similar allegations. The plaintiff claimed that she was influenced to purchase clothes at a premium price as a result of an influencer’s post and that they would not have purchased the defendant company’s products had they known that the influencer was compensated to make that post.

In the Revolve case, it is alleged that identical products offered on competitor sites were typically offered at 10-40 per cent less than those on the Revolve site—a pricing strategy that was only made possible due to the persuasiveness of the influencer posts. As with the Celsius case, the plaintiff is seeking to represent a nationwide class of consumers who purchased Revolve clothing products during the class period. The plaintiff, on behalf of the proposed class of members, is seeking US$50 million in damages.

In the complaint against Alo Yoga, the plaintiff similarly claimed that she was persuaded by influencers’ posts to purchase clothes at a premium price. Again, the Alo products were estimated to be priced at 10-40 per cent more than those of their competitors for the same quality. However, in this case, the plaintiffs are seeking a notable, US$150 million in damages.

What this means in Canada

While the success of these cases remains to be seen, this sudden surge of cases serves as an important reminder that influencer marketing can be challenged by private litigation, not only by regulators.

Although this trend has yet to influence consumers to initiate similar class actions in Canada, given the similarities between the rules in both countries, it would not be surprising to see similar class action lawsuits brought in Canada.

In the meantime, marketers and influencers should take special care to ensure that any influencer marketing content is in line with the Competition Act prohibitions against false and misleading advertising.

Three key principles to remember when engaged with influencer marketing

To help make sure your brand is trending for the right reasons, here are three practical reminders to keep your influencer marketing compliant.

  1. When in doubt, disclose
    If you’re not sure whether or not a material connection exists or if a disclosure statement is required, remember that a material connection may exist outside of the classic influencer-marketer relationship. Ad Standards recommends including a disclosure even where the influencer is not contractually obligated to create a post (i.e. where an influencer has received a free gift from the brand).
  2. Make sure disclosures are clear, unambiguous and visible
    There are a few disclosure hashtags that are typically well understood by the public (e.g. #ad #paidpartner). Influencers and brands should be cautious when veering off the beaten hashtag path as there is always a risk that certain hashtags will not be understood by the general public. Further, hashtags should not be buried in the caption of a post.
  3. Remember to stay accountable
    These lawsuits serve as an important reminder that allegations may be made against the brand and the influencer. As a brand, you should ensure that influencers are:
    1. Aware of the requirements.
    2. Contractually obligated to the brand to meet their disclosure obligations.

    As an influencer, you should ensure that you are meeting these requirements, even if the brand has reviewed the asset, approval from the brand will not necessarily protect you from a claim of deceptive marketing practices.

For further guidance on your influencer marketing practices or disclosure strategies, do not hesitate to contact the Gowling WLG Advertising, Marketing and Product Regulatory team.