A class action lawsuit filed in federal court in Illinois targets popular athleisure brand ALO Yoga and several social media influencers for allegedly failing to disclose paid partnerships in their Instagram promotions.
The suit, Sulici v. ALO Yoga, accuses the company and influencers of violating federal law and consumer protection statutes by concealing material connections in what appeared to be organic content.
According to the lawsuit, ALO Yoga and the named influencers allegedly engaged in a coordinated effort to hide their commercial relationships. Plaintiffs claim the company instructed or permitted influencers to omit required disclosures to create the illusion that endorsements were genuine rather than compensated.
“The complaint alleges that ALO and the influencers went to great lengths to hide their commercial relationship,” Tara Sattler, partner at Weintraub Tobin law firm, explains in “The Briefing” podcast. “The complaint says that because Instagram’s algorithms might flag and reduce the reach of sponsored content, ALO and the influencers purposely avoided using official ad disclosures to maintain higher engagement and reach.”
The lawsuit contends this strategy allowed posts to appear as authentic recommendations rather than paid advertisements, potentially violating U.S. Federal Trade Commission (FTC) rules on endorsement disclosures.
Premium Pricing Based on False Impressions
Plaintiffs claim they and other consumers paid premium prices for ALO products based on what they believed were genuine recommendations from influencers who genuinely preferred the brand. The complaint alleges these endorsements were actually secured through various forms of compensation, including cash payments, free products, trips, and other perks.
This case emerges amid broader consumer dissatisfaction with the brand. According to The Street, recent social media discussions have highlighted concerns about product quality relative to pricing, with some customers questioning the durability and value of ALO’s offerings despite their premium positioning.
FTC Disclosure Requirements at Center of Case
The lawsuit hinges on FTC guidelines that require clear and conspicuous disclosure of material connections between brands and influencers. These requirements include:
Explicit disclosure of any relationship that could affect the weight or credibility of an endorsement
Conspicuous placement of disclosures where consumers will see them simultaneously with the endorsement
Clear language that unmistakably communicates the paid nature of the content
“The test is whether a reasonable consumer would understand that the endorsement is a paid promotion,” Scott Hervey, partner at Weintraub Tobin, notes in the podcast. “If not, it’s considered deceptive under FTC standards.”
He adds that simply tagging the brand or using vague phrases like “thanks ALO” does not satisfy FTC requirements for proper disclosure.
Implications for Brands and Influencers
The case highlights significant legal exposure for both brands and content creators in influencer marketing. Under FTC guidelines, brands bear responsibility for misleading representations made on their behalf if they knew or should have known about disclosure failures.
Weintraub Tobin’s legal experts recommend that brands implement several protective measures:
Require clear disclosures in influencer contracts
Monitor influencer content for compliance
Maintain contractual rights to demand correction of non-compliant posts
Consider providing disclosure guidelines to partners
The guidance for influencers is straightforward: Use explicit hashtags like #ad, #sponsored, or #paidpartnership prominently in captions and ensure disclosures remain visible in all content formats, including stories and short-form videos.
“Transparency is not optional in influencer marketing,” Sattler emphasizes. “Failing to disclose a material relationship can create massive liability not just for the influencer but also for the brand.”
ALO Yoga, which continues to enjoy popularity with celebrities like Kylie Jenner and maintains a strong social media presence, has not publicly addressed the lawsuit allegations.
The fashion company is not the only one facing charges for FTC violations. In April, Revolve Group was sued for over $50 million for allegedly undisclosed influencer marketing practices.
Cecilia Carloni, Interview Manager at Influence Weekly and writer for NetInfluencer. Coming from beautiful Argentina, Ceci has spent years chatting with big names in the influencer world, making friends and learning insider info along the way. When she’s not deep in interviews or writing, she's enjoying life with her two daughters. Ceci’s stories give a peek behind the curtain of influencer life, sharing the real and interesting tales from her many conversations with movers and shakers in the space.
A class action lawsuit filed in federal court in Illinois targets popular athleisure brand ALO Yoga and several social media influencers for allegedly failing to disclose paid partnerships in their Instagram promotions.
The suit, Sulici v. ALO Yoga, accuses the company and influencers of violating federal law and consumer protection statutes by concealing material connections in what appeared to be organic content.
According to the lawsuit, ALO Yoga and the named influencers allegedly engaged in a coordinated effort to hide their commercial relationships. Plaintiffs claim the company instructed or permitted influencers to omit required disclosures to create the illusion that endorsements were genuine rather than compensated.
“The complaint alleges that ALO and the influencers went to great lengths to hide their commercial relationship,” Tara Sattler, partner at Weintraub Tobin law firm, explains in “The Briefing” podcast. “The complaint says that because Instagram’s algorithms might flag and reduce the reach of sponsored content, ALO and the influencers purposely avoided using official ad disclosures to maintain higher engagement and reach.”
The lawsuit contends this strategy allowed posts to appear as authentic recommendations rather than paid advertisements, potentially violating U.S. Federal Trade Commission (FTC) rules on endorsement disclosures.
Premium Pricing Based on False Impressions
Plaintiffs claim they and other consumers paid premium prices for ALO products based on what they believed were genuine recommendations from influencers who genuinely preferred the brand. The complaint alleges these endorsements were actually secured through various forms of compensation, including cash payments, free products, trips, and other perks.
This case emerges amid broader consumer dissatisfaction with the brand. According to The Street, recent social media discussions have highlighted concerns about product quality relative to pricing, with some customers questioning the durability and value of ALO’s offerings despite their premium positioning.
FTC Disclosure Requirements at Center of Case
The lawsuit hinges on FTC guidelines that require clear and conspicuous disclosure of material connections between brands and influencers. These requirements include:
“The test is whether a reasonable consumer would understand that the endorsement is a paid promotion,” Scott Hervey, partner at Weintraub Tobin, notes in the podcast. “If not, it’s considered deceptive under FTC standards.”
He adds that simply tagging the brand or using vague phrases like “thanks ALO” does not satisfy FTC requirements for proper disclosure.
Implications for Brands and Influencers
The case highlights significant legal exposure for both brands and content creators in influencer marketing. Under FTC guidelines, brands bear responsibility for misleading representations made on their behalf if they knew or should have known about disclosure failures.
Weintraub Tobin’s legal experts recommend that brands implement several protective measures:
The guidance for influencers is straightforward: Use explicit hashtags like #ad, #sponsored, or #paidpartnership prominently in captions and ensure disclosures remain visible in all content formats, including stories and short-form videos.
“Transparency is not optional in influencer marketing,” Sattler emphasizes. “Failing to disclose a material relationship can create massive liability not just for the influencer but also for the brand.”
ALO Yoga, which continues to enjoy popularity with celebrities like Kylie Jenner and maintains a strong social media presence, has not publicly addressed the lawsuit allegations.
The fashion company is not the only one facing charges for FTC violations. In April, Revolve Group was sued for over $50 million for allegedly undisclosed influencer marketing practices.