By Lindsay Gehman and Saachi S. Gorinstein
Our June 2026 article “AI, Influencers, and Liability: What Marketing Agencies Need to Know Before Deploying AI Tools,” surveyed the legal risks organizations face when they use or develop GenAI, including risks under consumer fraud and unfair and deceptive acts and practices (UDAP) laws and under state rights of publicity.
Since then, the legal landscape for AI-generated marketing content has changed considerably. Federal enforcement priorities have shifted, a federal executive order has targeted state AI regulation, New York has adopted the first state law requiring disclosure of AI-generated performers in advertising, digital replica protections have expanded in several states, and the EU AI Act’s transparency obligations now apply.
This article updates and expands the earlier discussion as it applies to advertising and endorsements. It focuses on the rules most relevant to brands, marketing agencies, and influencers that use GenAI to create or modify marketing content, including more details on federal endorsement and review rules.
GenAI is used in influencer marketing in three principal ways:
This article sets out the legal framework that applies across all three categories.
A recurring question runs through that framework: when must consumers be told that AI was used? There is currently no general federal rule requiring disclosure solely because AI was used to create or edit advertising content. However, existing consumer protection law applies regardless of whether content is created by a human, an AI system, or both. Under federal law, the more relevant question is whether the use of AI changes what consumers are likely to believe about an advertisement, particularly its source, its authenticity, or the experience of the person making an endorsement. AI-specific disclosure obligations are also beginning to emerge in state law, platform policies, and the EU AI Act.
The most significant developments include:
Section 5 of the FTC Act prohibits unfair or deceptive acts or practices in or affecting commerce (15 U.S.C. § 45(a)(1)). A representation, omission, or practice is deceptive if it is likely to mislead consumers acting reasonably under the circumstances and is material (FTC Policy Statement on Deception, appended to Cliffdale Assocs., Inc., 103 F.T.C. 110, 174 (1984)). Courts evaluate the net impression an advertisement creates, so a communication can be deceptive even if it contains truthful disclosures (FTC v. Cyberspace.com LLC, 453 F.3d 1196, 1200 (9th Cir. 2006); Kraft, Inc. v. FTC, 970 F.2d 311, 314 (7th Cir. 1992)).
Advertisers must also have a reasonable basis for objective claims before disseminating them. Claims that state or imply a specific level of support, such as “clinical research proves,” require at least that level of substantiation (FTC Policy Statement Regarding Advertising Substantiation, appended to Thompson Med. Co., 104 F.T.C. 648, 839 (1984), aff’d, 791 F.2d 189 (D.C. Cir. 1986); see also FTC, Health Products Compliance Guidance (Dec. 2022)). These obligations apply equally to claims drafted or suggested by GenAI. A GenAI tool may produce confident but unsupported statements, and the fact that a claim originated with AI does not reduce the advertiser’s substantiation obligation.
The FTC has repeatedly stated that existing law applies to AI-enabled conduct and has taken action against organizations that use AI, or claims about AI, to deceive consumers (see, for example, FTC: FTC Announces Crackdown on Deceptive AI Claims and Schemes (Sept. 25, 2024)). In April 2025, the FTC announced a proposed order requiring Workado, LLC to stop advertising the accuracy of its AI content detection products unless it has competent and reliable evidence to support those claims, and the FTC later finalized the order (FTC: FTC Order Requires Workado to Back Up Artificial Intelligence Detection Claims (Apr. 28, 2025)).
Under its current leadership, however, the FTC has framed AI enforcement as applying existing fraud and deception law rather than creating AI-specific obligations. The July 2025 AI Action Plan directed the FTC to review prior AI-related investigations, orders, and consent decrees that may unduly burden AI innovation (The White House, Winning the Race: America’s AI Action Plan (July 2025)). Consistent with that directive, in December 2025 the FTC reopened and set aside its 2024 consent order against AI writing-tool provider Rytr LLC, concluding that the complaint did not adequately allege a Section 5 violation and that the order unduly burdened AI innovation (FTC: FTC Reopens and Sets Aside Rytr Final Order in Response to the Trump Administration’s AI Action Plan (Dec. 22, 2025)). The 2024 order had barred Rytr from offering a service that generated consumer reviews and testimonials. Its vacatur signals that the FTC is less likely to pursue AI tool providers based on the potential for downstream misuse, but it does not affect the liability of businesses that actually use AI to create or disseminate fake reviews. On the same day it vacated the Rytr order, the FTC sent warning letters to companies regarding potential violations of the Consumer Reviews and Testimonials Rule (see Consumer Reviews and Testimonials Rule).
In July 2026, as directed by Executive Order 14365, the FTC issued a proposed policy statement on the application of Section 5 to AI systems. The proposed statement takes the position that AI companies that steer their systems’ outputs toward undisclosed objectives, rather than the objectives users set or reasonably expect, are likely to deceive consumers, and that state laws requiring such alterations may be preempted (FTC, Proposed Policy Statement Concerning the Suppression of Accuracy in Artificial Intelligence Systems (July 1, 2026)). The proposed statement is directed principally at AI developers rather than advertisers, but it confirms that the FTC views the deception framework as fully applicable to AI outputs.
The FTC has not adopted any rule or guidance requiring disclosure solely because GenAI was used to create or edit advertising content.
The FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising (Endorsement Guides) were most recently revised in 2023 (16 C.F.R. Part 255; 88 Fed. Reg. 48092 (July 26, 2023)). The Endorsement Guides are administrative interpretations of Section 5 rather than binding rules, but practices inconsistent with them may result in enforcement action (16 C.F.R. § 255.0(a)). The earlier article noted that the FTC treats fictional customer testimonials as inconsistent with the Endorsement Guides. The provisions most relevant to AI-generated influencer content are:
For FTC staff guidance on influencer disclosures, see FTC, Disclosures 101 for Social Media Influencers (Nov. 2019) and FTC, FTC’s Endorsement Guides: What People Are Asking (2023).
The FTC’s Trade Regulation Rule on the Use of Consumer Reviews and Testimonials took effect on October 21, 2024 (16 C.F.R. Part 465; 89 Fed. Reg. 68034 (Aug. 22, 2024)). The rule prohibits businesses from writing, creating, or selling consumer reviews, consumer testimonials, or celebrity testimonials that materially misrepresent:
(16 C.F.R. § 465.2(a).) The rule also prohibits businesses from purchasing such reviews or disseminating such testimonials when they knew or should have known of the misrepresentation (16 C.F.R. § 465.2(b)). The rule’s text does not mention AI, but in announcing the rule the FTC specifically identified AI-generated fake reviews as within its scope (FTC: Federal Trade Commission Announces Final Rule Banning Fake Reviews and Testimonials (Aug. 14, 2024)).
Because it is a trade regulation rule, violations may result in civil penalties where the violator had actual knowledge, or knowledge fairly implied, that the conduct was prohibited by the rule (15 U.S.C. § 45(m)(1)(A)). Whether a particular influencer statement is a consumer testimonial or celebrity testimonial under the rule’s definitions requires case-by-case analysis (16 C.F.R. § 465.1). The rule is a meaningful addition to the framework discussed in the earlier article because it gives the FTC a direct civil penalty remedy for fabricated testimonials, including those generated by AI or delivered through a synthetic persona.
The FTC’s Trade Regulation Rule on Impersonation of Government and Businesses took effect on April 1, 2024 (16 C.F.R. Part 461; 89 Fed. Reg. 15017 (Mar. 1, 2024)). The rule prohibits impersonating government entities, businesses, and their officials, and misrepresenting affiliation with or endorsement by them, but it does not reach impersonation of private individuals.
In 2024, the FTC proposed extending the rule to impersonation of individuals and adding means-and-instrumentalities liability that could reach providers of AI tools (89 Fed. Reg. 15072 (Mar. 1, 2024)). The FTC later decided not to proceed with the means-and-instrumentalities proposal. It held an informal hearing on the individual-impersonation proposal in January 2025 but, as of October 2026, had not finalized it. In October 2026, the FTC separately issued an advance notice of proposed rulemaking asking whether the rule should address platform advertising tools used in impersonation scams (FTC, Rule on Impersonation of Government and Businesses, Advance Notice of Proposed Rulemaking (Oct. 1, 2026)).
Even if the individual-impersonation provision is finalized, it would principally address unauthorized impersonation, such as deepfake celebrity endorsements, rather than an influencer-approved digital replica.
UDAP statutes are in force in all states and the District of Columbia, provide broad prohibitions against unfair or deceptive conduct, and sometimes exceed federal standards. Many direct courts to be guided by FTC and federal court interpretations of Section 5 (see, for example, Mass. Gen. Laws ch. 93A, § 2(b); Fla. Stat. § 501.204(2)).
Utah has clarified that it is not a defense to a violation of a statute enforced by its Division of Consumer Protection that GenAI made the violative statement, undertook the violative act, or was used in furtherance of the violation. This provision, enacted in 2025, is codified at Utah Code § 13-77-102.
State attorneys general have long pursued fabricated endorsements and false authenticity signals under their general consumer protection authority. For example, in 2013 the New York Attorney General announced settlements with 19 companies following an investigation into fake online reviews, and in 2019 the New York Attorney General reached a settlement with Devumi LLC over its sale of fake social media followers and engagement, some of which used accounts copying real people’s profiles (see N.Y. Gen. Bus. Law §§ 349 to 350). These are traditional deception matters rather than AI-specific precedent, but they apply by analogy to AI-generated reviews and personas.
Several states have enacted AI-specific disclosure requirements relevant to influencer marketing.
New York requires advertisements that include a synthetic performer to disclose that fact conspicuously (N.Y. Gen. Bus. Law § 396-b (signed Dec. 11, 2025; effective June 9, 2026)). A synthetic performer is a digitally created asset, generated or modified by AI or a software algorithm, that is intended to create the impression of a human performer who is not an identifiable real person. The disclosure obligation applies to persons who produce or create advertisements, and only where they have actual knowledge that a synthetic performer is used. The law includes exceptions, including for audio-only advertisements and certain uses in connection with expressive works, and does not apply to media outlets that merely carry advertising. Civil penalties are $1,000 for a first violation and $5,000 for each subsequent violation.
The New York law is the first state law to require disclosure of AI-generated performers in advertising and is directly relevant to brands that use fully synthetic influencers in campaigns reaching New York audiences.
It is unlawful to use a bot to communicate or interact online with a person in California with the intent to mislead the person about its artificial identity in order to incentivize a purchase or sale of goods or services, unless the bot’s nature is clearly and conspicuously disclosed. A bot is an automated online account where all or substantially all of the actions or posts are not the result of a person (Cal. Bus. & Prof. Code §§ 17940 to 17943).
Utah requires a supplier that uses GenAI to interact with an individual in connection with a consumer transaction to disclose that the individual is interacting with GenAI rather than a human, if the individual clearly and unambiguously asks. Individuals providing services in certain regulated occupations must prominently disclose GenAI use at the outset of high-risk AI interactions, such as those involving sensitive personal information or personalized financial, legal, medical, or mental health advice. The law provides a safe harbor for compliant disclosures (Utah Code §§ 13-77-101 to 13-77-106).
California requires providers of GenAI systems with more than one million monthly users to offer free AI detection tools and to include provenance disclosures in AI-generated image, video, and audio content (Cal. Bus. & Prof. Code § 22757 et seq.). The Act became operative on August 2, 2026, after AB 853 (2025) delayed its original January 1, 2026 operative date. AB 853 also adds provenance-related obligations for large online platforms and other entities beginning in 2027. The law regulates AI providers and platforms rather than advertisers, but AI-generated campaign assets may carry machine-readable provenance data that platforms can detect and label.
These laws operate against an unsettled federal backdrop. Executive Order 14365 directs the Attorney General to establish an AI Litigation Task Force to challenge state AI laws deemed inconsistent with a minimally burdensome national AI policy framework, directs the Secretary of Commerce to identify such laws, and directs the FTC to issue the policy statement discussed above (Exec. Order No. 14365, Ensuring a National Policy Framework for Artificial Intelligence, 90 Fed. Reg. 58499 (Dec. 16, 2025)). The order does not itself invalidate any state law. Organizations should comply with state disclosure laws as enacted while monitoring for preemption challenges.
State statutory and common law rights of publicity are the most relevant protections against unauthorized use of a person’s identity, but there is no federal right of publicity and state laws vary considerably. These laws restrict the unauthorized commercial use of a person’s name, likeness, or voice (see, for example, Cal. Civ. Code § 3344; N.Y. Civ. Rights Law §§ 50 to 51). Courts have long applied them to imitations that evoke a person’s identity without using the person’s actual image or voice (see, for example, Midler v. Ford Motor Co., 849 F.2d 460 (9th Cir. 1988) (deliberate imitation of a singer’s distinctive voice in a commercial)).
These protections are now being tested against AI voice cloning. In Lehrman v. Lovo, Inc., voice actors sued an AI voice company for creating and selling clones of their voices. The court dismissed the plaintiffs’ federal trademark claims and most of their copyright claims but allowed their claims under New York’s right of publicity statute, New York consumer protection law, and breach of contract to proceed (Lehrman v. Lovo, Inc., No. 1:23-cv-08269, 2025 WL 1902547 (S.D.N.Y. July 10, 2025)). The decision suggests that, at least for now, state publicity and consumer protection laws are more effective than federal intellectual property law against unauthorized AI voice replicas.
Several states have also enacted laws that specifically address digital replicas, including:
An influencer whose replica is used without authorization may also have a federal false endorsement claim under the Lanham Act (15 U.S.C. § 1125(a)(1)(A); Waits v. Frito-Lay, Inc., 978 F.2d 1093 (9th Cir. 1992)).
The No FAKES Act, which would create a licensable federal right in a person’s voice and visual likeness in digital replicas, was reintroduced in the 119th Congress as the NO FAKES Act of 2026, which adds a counter-notification process to its notice-and-takedown regime and would preserve state digital replica laws in existence as of January 2, 2025. The Senate Judiciary Committee approved the bill in June 2026, and as of October 2026 it remains pending on the Senate calendar (S. 4591, 119th Cong. (2026)). The TAKE IT DOWN Act, enacted in May 2025, addresses nonconsensual intimate imagery, including AI-generated imagery, rather than advertising (Pub. L. No. 119-12 (2025)).
These laws generally protect an individual’s control over their identity. They do not resolve whether consumers are being misled, which remains the central question under advertising law.
Major social media platforms require creators to label realistic AI-generated or materially altered content. For example:
These requirements are contractual terms rather than legal mandates, but noncompliance can result in content removal or account penalties. Platform policies change frequently and should be checked for each campaign.
The EU AI Act has extraterritorial reach and may apply to organizations outside the EU that produce AI system output used, or intended to be used, in the EU (Regulation (EU) 2024/1689 (EU AI Act)). Its transparency obligations require deployers of AI systems that generate or manipulate deepfake image, audio, or video content to disclose that the content has been artificially generated or manipulated (Article 50(4), EU AI Act).
Article 50 has applied since August 2, 2026 (Article 113, EU AI Act). The Digital Omnibus on AI, adopted in 2026, deferred the EU AI Act’s high-risk system obligations but did not defer Article 50, except for a grace period until December 2, 2026 for the Article 50(2) marking obligations of GenAI systems placed on the market before August 2, 2026. Campaigns that reach EU audiences and include AI replicas of real people, or synthetic content that could be mistaken for authentic, should account for these labeling requirements.
The legal significance of AI in influencer marketing depends less on whether AI was used than on what the AI does. Under federal advertising law, the key questions are whether AI creates or simulates a real person’s statements or experience, creates a fictional persona, or materially alters a product demonstration, and whether consumers would understand the advertisement differently if they knew. Separately, state, platform, and foreign rules may require AI disclosure regardless of the deception analysis.
In the first article in this series, “AI, Influencers, and Liability: What Marketing Agencies Need to Know Before Deploying AI Tools,” we explained that the key legal question for brands and agencies is not simply whether AI is being used in influencer marketing, but how it is being used. The developments discussed in this article reinforce that point. Federal law still does not require disclosure solely because AI was used, and the FTC has signaled that it will apply existing deception and substantiation principles to AI rather than create AI-specific obligations. Those principles apply fully to AI-generated content: endorsements must reflect genuine opinions and experiences, claims must be substantiated, and the Consumer Reviews and Testimonials Rule now gives the FTC a civil penalty remedy for fabricated testimonials, including those generated by AI.
At the same time, AI-specific obligations are emerging outside federal advertising law. New York now requires disclosure of synthetic performers in advertising, states continue to expand protections for digital replicas, platforms require labels for realistic AI content, and the EU AI Act’s deepfake disclosure requirements now apply. These rules operate against an unsettled federal backdrop, including Executive Order 14365’s challenge to state AI laws and the pending NO FAKES Act, so the requirements that apply to a given campaign may continue to shift.
Brands and agencies should comply with state disclosure laws as enacted, track platform and international requirements by campaign and audience, address AI use and digital replica rights expressly in influencer agreements, and monitor federal preemption efforts. Those that evaluate AI based on what it does, rather than simply whether it was used, will be better positioned to use GenAI effectively while minimizing legal and reputational risk.
Our next article, “AI-Assisted, Replicated, and Synthetic Influencers: Legal Risks and When to Disclose AI,” takes a closer look at each of the three ways AI is used in influencer marketing and offers a practical framework for deciding when AI use should be disclosed.
For further information and assistance, contact Lindsay Gehman or Saachi Gorinstein.
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