Diligent Influence

Social media influencers wield astonishing marketing power. While influencing may be innocuous in some respects, scholars have argued that influencer marketing—which is uniquely high-touch, individualized, and intimate—raises novel consumer safety concerns. These concerns, in turn, beg crucial questions of risk allocation. In her excellent Note, Under the Influence: Duties, Deception, Disclosures, and Due Diligence of Social Media Influencers, Arianna Kiaei describes the psychological and economic impacts of social media influencing and makes a compelling case for influencer accountability. Kiaei argues that current regulations focus too narrowly on the companies promoting their products through influencers; instead, Kiaei suggests that the robust accountability required to protect influenced consumers cannot adequately be achieved without focusing on influencers themselves. To encourage influencer accountability, Under the Influence proposes a diligence solution: Influencers should assess products through personal use and independent research before posting about their experiences on social media platforms. Kiaei borrows from Delaware corporate law to submit that influencers who comply with established due diligence processes might satisfy a duty of oversight reminiscent of that owed by directors and officers as part of the fiduciary duty of loyalty. In theory, in the event of a regulatory crackdown, an influencer’s good faith implementation of investigative systems and monitoring of risks in their social media activities (i.e., diligence) could satisfy any oversight duties courts might impose on them.

Kiaei’s ex ante approach to influencer accountability convincingly weaves together observations of influencer credibility, audience trust, and consumer safety to make a case for a strengthened regulatory regime and duty-based compliance. This Comment builds upon Kiaei’s novel contributions. More can be done to incentivize influencer accountability, as Kiaei demonstrates. More can also be done to incentivize companies and third parties to require such accountability. Drawing on contract law, contract theory, and a flourishing body of research on influencer marketing, this Comment contemplates the role of private ordering in social media influencing and considers how companies’ influencer policies might impact major corporate transactions such as mergers and acquisitions (“M&A”).

Part I of this Comment considers the use and efficacy of morality clauses in social media influencer contracts. Part II zooms out, using M&A as a framing device to spotlight the signaling functions of private ordering in social media influencing and arguing that this signaling is consequential to companies’ business prospects and financial success. This Comment concludes by revisiting Kiaei’s proposal and joining the call for diligent influence.