Revolve, a popular online fashion retailer favored by Gen Z shoppers, is being sued for $50 million in a class-action lawsuit filed in California.
The lawsuit claims that Revolve used social media influencers to promote its products without clearly telling customers these were paid advertisements. This practice allegedly misled over a million consumers.
The complaint, filed in the Central District Court of California, accuses Revolve of breaking federal trade laws by running an advertising “scheme.” Influencers were paid or given free products to promote Revolve items but did not disclose their relationship with the brand.
Instead of clear labels like “paid partnership” or “#ad,” many posts only tagged Revolve’s Instagram account, making it hard for followers to know the endorsements were sponsored.
The lead plaintiff, Ligia Negreanu, said she would not have bought Revolve products at higher prices if she had known the posts were paid ads. Prices were sometimes 10% to 40% higher than other stores selling the same items. The lawsuit also names three influencers and Revolve’s affiliate companies as co-defendants.
Federal Trade Commission (FTC) rules require influencers to clearly disclose any material connection with brands they promote. The lawsuit argues that Revolve ignored these rules, violating consumer protection laws in more than 20 states, including Florida’s Deceptive Trade Practices Act.
Revolve warned in its 2023 annual report about legal risks if its influencer partners failed to follow FTC guidelines. Earlier this year, the National Advertising Division of the Better Business Bureau recommended that Revolve make influencer posts clearly show their connection to the brand.
Despite the lawsuit, Revolve’s business grew in 2024, with net sales reaching $1.1 billion, a 6% increase from the previous year. Profits rose 73% to nearly $49 million. The company’s stock price rose nearly 4% on Monday but has dropped 38% so far this year.
Related topics: