When an influencer post breaks the rules, who's responsible? Brands, agencies and creator platforms
Written by For Founders Law, a Toronto firm licensed by the Law Society of Ontario. About us
In short
The Competition Act's misleading advertising rules apply to anyone who makes a representation to promote a product or business interest, so a non-compliant influencer post can expose the brand, the creator and an agency or platform that wrote or approved it. The Competition Bureau has said brands share responsibility for influencer posts. Since June 2025, private parties can also seek leave to bring deceptive marketing cases to the Competition Tribunal. Contracts allocate cost between the parties, but a documented compliance process is what protects each of them.
An influencer campaign usually involves several parties: the brand, an agency or creator marketplace, and the creator. When a post goes wrong, such as a missing disclosure or an unsupported claim, each party tends to assume someone else was checking. Canadian law doesn’t take that view.
This post is general information, not legal advice.
The laws that apply
The Competition Act. Section 74.01 makes it reviewable conduct to make a representation to the public that is false or misleading in a material respect, for the purpose of promoting a product or business interest, by any means. Section 52 makes knowingly or recklessly misleading representations a criminal offence. Both the literal meaning and the general impression of a post count, and the Act says it isn’t necessary to show anyone was actually misled.
Performance claims. Section 74.01(1)(b) covers claims about a product’s performance or efficacy that aren’t based on an adequate and proper test. The person making the claim has to show the test.
The Canadian Code of Advertising Standards. Ad Standards administers this self-regulatory code, and its Influencer Marketing Disclosure Guidelines, updated in October 2025, describe how to disclose paid, gifted and affiliate content, including content made with AI.
Is the brand responsible?
It can be. The Competition Bureau has said advertisers may be responsible for representations made through influencers, and has told brands and agencies that they share responsibility with influencers for social media ads. The most common failure is undisclosed paid content: the Bureau’s position is that it can be misleading not to make clear that content is advertising.
Is the creator responsible?
Yes. The Act applies to any “person,” which includes individual creators. A creator who repeats a brand’s script that a supplement “doubles your energy in a week” is making that claim to their audience. Creators are also expected to disclose their material connection to the brand, whether it’s a fee, free product, a commission or equity.
Agencies and creator platforms
Responsibility follows conduct, not job title. An agency that writes captions, chooses claims, approves content or runs ads through a creator’s account is closely involved in the representation. Ad Standards’ guidelines are written for brands, agencies, influencer marketing companies and influencers alike, and treat disclosure as a responsibility each of them carries.
For software founders, this matters if you build a creator marketplace, an affiliate network or an AI tool that writes briefs and captions. A neutral hosting service is in a different position from a platform that drafts scripts, auto-writes captions or manages campaigns. Design choices that help:
- disclosure prompts built into the briefing and posting flow;
- a requirement that brands upload support for any performance claim;
- clear allocation of responsibilities in your terms of service, with indemnities that match who controls what;
- a record of who approved each piece of content.
The penalties
Under section 74.1, for a corporation, an administrative monetary penalty for deceptive marketing can reach the greater of $10 million ($15 million for later orders) and three times the benefit derived, or 3% of annual worldwide gross revenues if the benefit can’t reasonably be determined. For individuals, the maximum is the greater of $750,000 ($1 million for later orders) and three times the benefit. The civil provisions include a due diligence defence to penalties.
Since June 20, 2025, private parties, such as competitors, can apply for leave to bring deceptive marketing cases to the Competition Tribunal. A rival brand no longer has to wait for the Bureau.
How contracts should split the risk
A contract decides who pays whom after something goes wrong. It doesn’t stop a regulator from pursuing anyone it considers responsible. With that limit in mind, the brand agreement, the agency agreement and the creator agreement should give the same answers to five questions:
- Who writes the product claims?
- Who holds the evidence behind them?
- Who approves content before it goes live?
- Who monitors posts once they’re live?
- Who removes or corrects a post, and how quickly?
A due diligence checklist for brands
- Put disclosure requirements in every creator contract, with exact wording and placement for each platform.
- Approve product claims in advance, and keep the evidence behind them.
- Monitor live posts and have a fast correction path.
- Keep a written endorsement policy that staff and agencies actually follow.
- Keep records: briefs, approvals, screenshots and correction requests.
See our guide to creator and brand agreements.
We prepare brand deal contracts, terms of service and SaaS agreements at fixed fees, listed on our fees page. If you’re running campaigns or building a creator platform, book a free 15-minute consult.