Content Creators, the FTC, and the $150 Million ALO Lawsuit: Why You Should Care

Introduction

A massive new class-action lawsuit against ALO Yoga highlights a risk all influencers and content creators should have on their radar. While the suit is aimed at the brand, not individual influencers, there’s a very real scenario where creators could still face financial exposure through their contracts. In this post, we break down what the FTC requires, what’s happening in the ALO case, and why content creators should care.

What is the FTC and why do disclosures matter?

The Federal Trade Commission (FTC) is the U.S. agency that enforces laws against deceptive or unfair business practices. In influencer marketing, if you receive money, free products, discounts, or any other material consideration, you must make a clear and conspicuous disclosure of that relationship.

That’s why you see tags like #ad or #sponsored. or #partner The goal is simple: audiences should be able to tell if a post is an honest review or a paid promotion. Without disclosure, people may be misled into thinking endorsements are impartial and that the influencer was not paid.

The ALO Yoga Lawsuit Basicsl

In April 2025, a proposed nationwide class action—Sulici et al. v. Color Image Apparel d/b/a ALO Yoga et al.—was filed in the U.S. District Court for the Northern District of Illinois. The complaint alleges that ALO and certain influencers promoted ALO products on social media without making required sponsorship disclosures, creating the impression of unbiased recommendations.

The plaintiffs seek more than $150 million in damages, along with restitution and injunctive relief. The claims sound in consumer protection and deceptive practices theories and are based on alleged failures to disclose material connections between the brand and endorsers. This is one of the largest lawsuits out there focused on FTC disclosure violations.

How You As a Content Creator Could Be Effected

Even if a lawsuit names the brand and not the influencers, your contract can pull you into the fallout. Many creator–brand agreements include an indemnification clause. In plain English: if the brand gets sued for something you did—like failing to make required disclosures—the brand can demand that you cover its losses and legal fees pursuant to the indemnification clause.  We outlined why indemnification clauses matter for content creators Link Text

In a worst-case scenario, if a brand were found liable and your agreement requires you to indemnify the brand for your breaches (for example, not complying with FTC disclosure obligations), you could face liability far beyond your campaign fee. That’s the financial exposure creators need to plan for.

The tension with brands (and when to push back)

Some brands prefer posts to “feel organic” and may pressure creators to soften or skip disclosure. Don’t. If a disclosure isn’t clear and conspicuous, the risk shifts to you, especially where your contract puts compliance on your shoulders.

This is where smart drafting matters. Ask for indemnification carve-outs so you’re not responsible where the brand contributed to the problem (e.g., if the brand directed you to avoid “#ad” or to bury disclosures). Carve-outs can help prevent you from paying for the brand’s choices.

Why this matters (and how Counsel Club helps)

The ALO lawsuit is a wake-up call: those dense indemnity and compliance provisions aren’t just legalese—they can determine whether you walk away safe or face devastating exposure. Understanding what you’re signing and why it matters is essential risk management for creators and studios.

At Counsel Club, our creator agreements are built with FTC compliance and practical indemnity carve-outs in mind, so you’re protected if a brand pushes for risky practices. We translate the legal into plain English, so you can sign with confidence.

Protect yourself now

If you’re partnering with brands, shore up your contracts today. Our Link Text. bakes in FTC-compliant disclosure obligations, practical indemnity carve-outs, and safeguards for brand-pressure scenarios.

Link TextGet the Content Creator Agreement and make sure your contracts protect you, not just the brand.