You are watching a woman in her car eat a chicken sandwich. She is telling you, with what appears to be genuine emotion, that this sandwich changed her week. The lighting is bad. The framing is worse. Everything about the video signals that this is a person, not a production — right up until the caption, where #ad sits ninth in a list of fourteen hashtags, between #foodie and #blessed.
The sandwich might be good. She might love it. That is no longer the point, because you cannot tell, and not being able to tell is now the default condition of being a person on the internet. The interesting thing about influencer marketing was never that it deceived anyone in particular. It is that it devalued enthusiasm in general.
Advertising used to be visually loud, and the loudness was a feature. A magazine ad was glossy where the articles were matte. A television commercial arrived at higher volume, in a block, announced by its own grammar. Nobody designed this as a consumer protection, but it functioned as one: audiences could see the persuasion coming and apply the appropriate discount. The Federal Trade Commission’s endorsement rules, codified at 16 CFR Part 255 and first issued in 1980, were written for that world — one where the main risk was a celebrity pretending to use a product on camera. The rule itself is simple. If there is a “material connection” between an endorser and an advertiser — money, free product, family ties — it must be “clearly and conspicuously” disclosed.
Then the industry discovered that the boundary was the problem. An ad that looks like an ad gets discounted; a recommendation that looks organic does not. Influencer marketing did not stumble across the blur between the two. The blur is the product. The entire business model is renting out the credibility of a person who does not appear to be selling anything, and the worse the lighting, the better the conversion.
The FTC noticed, eventually. It revised the endorsement guides in 2009 to cover blogs and social media, and issued its native-advertising policy statement in 2015, aimed at ads formatted to pass as editorial. In 2023 it revised the guides again, with language that reads like a regulator who has personally scrolled Instagram: disclosures buried among multiple hashtags, or hidden behind a “more” link, may not count as clear and conspicuous. The staff FAQ is blunter still. A hashtag among thirty hashtags satisfies the letter of the rule while defeating its purpose, which is, of course, exactly why it is so popular.
The enforcer’s dilemma
What the FTC has not done, mostly, is punish anyone. The enforcement record is real but thin, and it reveals a regulator chasing an industry that can produce new endorsers faster than the agency can produce consent orders. The landmark case remains CSGO Lotto in 2017, the first FTC complaint against individual influencers: two men promoted a gambling site they secretly owned and paid other influencers to do the same, all without disclosure. The settlement required them to stop. There was no fine. Lord & Taylor settled in 2016 over a native-advertising campaign involving a dress and fifty influencers who posted about it on the same day without saying they were paid; again, no fine. Warner Bros. settled the same year over paid gameplay videos presented as independent enthusiasm. No fine.
The pattern holds. Sunday Riley, the skincare company, settled in 2019 after the FTC alleged that employees — at the CEO’s direction, per the complaint — had posted fake reviews of its own products on Sephora’s site. The punishment was an order not to do it again. When the agency did finally extract real money, it was from a retailer, not an influencer: Fashion Nova paid roughly $4.2 million in 2022, in the first case over suppressing negative reviews. The message the market received was not subtle. Advertisers occasionally pay. The human megaphones almost never do.
The FTC seems to know this. In 2021 it sent Notices of Penalty Offenses to more than 700 companies, essentially a mass warning that fake reviews and undisclosed endorsements could now trigger civil penalties. And in August 2024 it finalized the Rule on the Use of Consumer Reviews and Testimonials — an actual trade regulation rule, not guidance — banning fake and AI-generated reviews, bought reviews, undisclosed insider reviews, review suppression, and purchased followers and views. After four decades of interpreting the boundary, the agency has started fencing it.
The commons of enthusiasm
It is tempting to treat all of this as a consumer-protection story about individual transactions: someone bought a bad tea, a mediocre skin cream, a skin-gambling habit. But the deeper damage is not transactional. It is atmospheric.
A recommendation is a small act of social generosity. It works because the recommender has something to lose — their credibility with you — and nothing obvious to gain. Paid promotion parasitizes exactly that structure, and like any parasite, it does not need to be common to change the host’s behavior. It only needs to be possible. Once any enthusiastic post might be compensated, the rational audience discounts every enthusiastic post. The friend who genuinely loves the sandwich now sounds, structurally, like the woman in the car. Sincerity has to compete with its own impersonation, and it competes badly, because the impersonation has a production budget and a posting schedule.
Economists would call this a tragedy of the commons, and for once the metaphor is precise. Trust in unsolicited praise was a shared pasture, and the influencer industry grazed it to the dirt. The FTC can fence the field, fine the worst offenders, and mandate bigger signs. What it cannot do is restore the grass — the easy, unguarded credibility that a stranger’s excitement used to carry.
Which leaves us with the discount, now applied universally and forever. The woman in the car may be telling the truth about the sandwich. That is the saddest part of the whole arrangement: we will never believe her, and it doesn’t matter whether she was paid.