Influencer Startup Law & Personal Brands | IT-Medienrecht

Business model of influencer start-ups: Legal challenges and strategic solutions

Influencer start-ups have established themselves as an independent business model in recent years. An influencer startup is a young company that builds on the reach and brand of one or more internet personalities – the influencers – and uses them commercially. At its core, the model converts the influencer's large following on social media into revenue, for example through advertising, product placements, or the sale of their own products. These start-ups therefore combine elements of traditional media companies, advertising agencies, and personal brand management.

The focus of an influencer startup can be diverse. Some focus on content production, such as regular videos, blog posts, or streams. Others concentrate on e-commerce, offering merchandising or developing their own product lines, or engage in cross-platform marketing. Typically, however, the influencer as a person remains central. Their personality, popularity, and authenticity are the company's assets.

For commercial operations, a separate company is often founded, for example, a GmbH or UG in Germany. This entity processes contracts with advertising partners, agencies, and platforms. This structure allows the personal brand to be cast into an entrepreneurial framework that is scalable and attractive to investors. However, this poses particular legal challenges for the startup because the brand is closely tied to the individual, as will be discussed in detail below.

An influencer startup must adopt an interdisciplinary approach. In addition to creative content and marketing, legal issues must be considered from the outset. These include contract design, compliance with advertising law, data protection, and brand development. For instance, the labeling of advertising is an early issue, as violations can result in warnings or fines. The correct legal form and structure, such as establishing a corporation to limit personal liability and drafting clear contracts between the influencer and the company, are also crucial parts of strategic planning.

In summary, influencer start-ups are companies whose business model is based on the commercialization of their own reach in social media. They combine creative work with professional personal brand management and require a sophisticated legal foundation. This foundation is essential to operate successfully and with legal certainty in the long term. The following sections examine individual aspects in detail from a legal perspective, from the definition of the personal brand and monetization models to contract drafting and approaching investors.

Personal Brands as a Business Model: Definition and Legal Classification

The term personal brand refers to an individual becoming a brand through their identity, reputation, and public perception. For influencers, this means that the focus is not on a detached product, but that the influencer's personality is the figurehead and guarantor of the company's values. The content and values of such a business model are therefore essentially based on the presence and authenticity of a single person.

Legal Perspectives on Personal Brands

From a legal perspective, a personal brand is an intangible asset that involves various areas of protection. First, the right to a name (Section 12 BGB) is relevant, as the influencer’s name or stage name is typically used. Section 12 BGB protects the name bearer from unauthorized use or usurpation of their name. For well-known influencers, the stage name can thus act as a company trademark. Third parties may not use it commercially if there is a risk of confusion.

Secondly, trademark law applies if the influencer has registered their name or a logo as a trademark. A registered trademark offers comprehensive protection and exclusive rights of use for specific goods and services. Many influencers protect their stage name by registering it with the DPMA/EUIPO to prevent imitators and expand their personal brand. For more insights into this, see our article on Trademark protection for start-ups.

Business Integration of Personal Brands

From a business perspective, the personal brand is often incorporated into a legal entity. For example, influencers establish a sole proprietorship or corporation to which they transfer certain exploitation rights. This structure allows contracts with advertising partners and others to be processed through the company, while the influencer acts as a figurehead.

The contractual structure is critical. The influencer (as a natural person) and their own company should establish clear agreements. These should cover the use of likeness, name, and content to prevent future conflicts. License agreements are particularly important here, allowing the company to use the personal brand.

Advertising Law and Personal Brands

Another aspect of legal classification is that personal brands must be identified as such in advertising. If an influencer promotes their own brand, such as their own fashion label, the question arises whether this must be labeled as advertising. According to the Federal Court of Justice, an influencer who presents products and simultaneously promotes their own image is always acting "commercially." This means that self-promotion can also trigger labeling obligations if there is a commercial intention behind it.

The legal situation was clarified in 2022 with the new Section 5a (4) UWG (the "Influencer Act"). No labeling is required if there is no consideration from a third-party company. However, the BGH clarified that mere gratuitousness is not sufficient. Anyone who promotes their own commercial purpose is also acting commercially. This means the personal brand as a business model falls under advertising law as soon as it is used to promote one's own or third-party companies. Our article on surreptitious advertising provides further context.

Strategic Brand Development and Personal Rights

As a business model, the personal brand requires conscious brand development (personal branding). Values, messages, and recognizability of the person are strategically developed, similar to product brands. From a legal perspective, it is important to ensure protection early on. This includes domain protection, trademark registration in relevant classes (e.g., class 41 for entertainment services, 35 for merchandising), and contracts with partners who use the personal brand (licensing conditions, clear regulations on content and limits of use).

The personal brand also interacts closely with personal rights. The influencer as a person has rights to their own image (Section 22 KUG) and to their voice/biography. Any commercial exploitation of these elements must align with personal rights, requiring particular sensitivity.

Overall, the personal brand is legally a hybrid construct. It is both a marketing strategy and a legal object. For founders, this means they must set up their persona under trademark law and contractually in a way that it becomes a resilient business model. It must be transferable or licensable without infringing inalienable personal rights. This balancing act shapes all subsequent topics, from monetization and liability to approaching investors.

Monetization Models for Influencers and Personal Brands

The question of how influencers actually earn money is central to their business model. Various monetization models have been established, which are often used in parallel.

Collaborations and Sponsored Content

The most common source of income involves collaborations with companies. Influencers present products or services in their posts, videos, or streams. They typically receive either a flat fee or are paid based on success, such as through affiliate links or commissions. Legally, these are advertising contracts or service contracts that oblige the influencer to publish content in return for payment.

It is crucial to clearly label them as advertising to avoid surreptitious advertising. Under German law, a labeling obligation exists if the influencer receives consideration for the product mention. The content must be marked so that the advertising character is recognizable at first glance, for instance, with "Advertisement" or by using the platform function "Paid partnership with...". Platform terms and conditions also support this; Instagram, for example, prohibits veiled advertising and provides tools to tag partners.

Contracts for sponsored content should regulate several aspects. These include the content and frequency of posts, approval processes, duration of posts (how long they remain online), exclusivity (e.g., no competitor products advertised during the campaign), and liability issues (who is liable for any legal violations in the content).

Digital Products and Own Content

Many influencers market their own digital products. Examples include e-books, online courses, presets/filters, music pieces, or exclusive communities like Telegram groups or Discord. Another prominent model is the sale of subscriptions for exclusive content via platforms such as Patreon, Steady, or OnlyFans. OnlyFans allows creators to grant paying subscribers access to exclusive photos/videos for a monthly fee, often in the adult entertainment sector.

Legally, usage contracts with end customers and the platform's terms and conditions are relevant here. Influencers must comply with consumer protection regulations when selling directly to consumers. These include imprint obligations and the right of withdrawal for digital content. The latter can expire for fully fulfilled digital services, as per Art. 16 lit. m EU Consumer Rights Directive.

With platforms like OnlyFans, the platform usually acts as an intermediary. The influencer concludes a contract with the platform, which then processes subscriptions and pays out a share of the revenue. The platform's terms and conditions regarding permissible content are important (e.g., OnlyFans explicitly prohibits content with minors or non-consensual depictions).

Furthermore, tax issues are crucial. Income is taxable, and platforms like OnlyFans are often based abroad (e.g., UK). However, German creators must still observe VAT, for example (potentially reverse charge or special regulations for electronic services).

Merchandise and Physical Products

Successful personal brands often expand into merchandising. Influencers launch their own fashion collections, cosmetic lines, nutritional supplements, or other products. This can be done either independently under their own brand or in cooperation with manufacturers. Legally, this usually requires license agreements. The influencer makes their name, logo, or slogan available as a brand, while a manufacturer produces and distributes the goods and pays license fees. For more information, read about White label vs. OEM contracts.

Alternatively, the influencer can set up a production company or an online store themselves and sell in their own name. In this scenario, extensive legal obligations apply. These include product liability, warranty, and labeling obligations (such as the Cosmetics Regulation, food law for supplements). Consumer rights in online trading (imprint according to Section 5 DDG, GDPR notices, right of withdrawal, etc.) also become relevant.

For example, if a fitness influencer sells their own protein powder, as the distributor, they must bear responsibility under food law. They must ensure that product advertising complies with health claim requirements. Therefore, influencers often cooperate with existing companies (white label products) to outsource these risks. This is a common strategy to mitigate legal complexities related to product liability.

Live Events and Appearances

Some influencers monetize their brand through events. These can include meet-and-greets, tours, conferences, or paid appearances as a speaker or moderator. Here, classic service contracts are concluded, where the influencer appears for a fee. Additionally, ticket sales can generate direct revenue if the influencer organizes the event.

In terms of contract law, several points must be clarified. These include performance conditions, possible cancellations (due to illness, etc.), rights of use for photos/videos of the event, and liability issues. For instance, liability may arise if the influencer's personal rights are violated by fans or vice versa. When influencers participate in TV shows or formats, they often conclude so-called artist contracts, which also regulate fees and permitted exploitation.

Platform Monetization

Many social media platforms offer their own remuneration models. Examples include the YouTube Partner Program (share of ad revenue before videos), the TikTok Creator Fund, Twitch with subscriptions and bits (tips), Instagram Bonuses, or Facebook In-Stream Ads. This income is usually defined by the platform T&Cs. Influencers agree to platforms placing ads and paying out a fixed share.

It is crucial here that influencers comply with the community guidelines and partner terms and conditions. Violations, such as copyright infringements or hate speech, can lead to demonetization or blocking. This income source is often volatile for the business model, as it depends on algorithms and platform decisions.

From a legal perspective, disputes are rarely settled directly in court, as contracts often provide for arbitration bodies (e.g., YouTube has an internal complaints system) or foreign jurisdictions. Nevertheless, this income is part of the tax assessment basis and must be accounted for and taxed by the influencer startup.

Premium and Adult Content (OnlyFans, Patreon)

A special area involves erotic or sexual content on platforms like OnlyFans. Here, some influencers generate enormous revenues through revealing content offers behind paywalls. The law is strict in this area. Only adults may participate as creators and subscribers, and platforms require age verification. Content that is pornographic can have criminal relevance if it violates Section 184 of the German Criminal Code (StGB) (distribution of pornographic material). However, Section 184d StGB allows distribution to adults under certain conditions.

Influencers offering such content operate in a legally sensitive area where the protection of minors and privacy play a major role. Platforms like OnlyFans stipulate that all recognizable persons in the content must have given their consent and be of legal age; any violation results in an immediate ban.

For the startup, reputation is also a consideration. Investors may be reluctant to invest in business models based on erotic content due to regulatory and moral risks. Nevertheless, this is a legitimate monetization model that should not be excluded. For specific legal considerations, see our article on OnlyFans management contracts.

In conclusion, influencers usually monetize in multiple ways. For example, they might combine advertising for third-party products with building their own product lines. Each income source entails specific contractual forms and legal requirements that an influencer startup must observe. The challenge is to combine these models in a way that legal conflicts are avoided, such as exclusivity clauses from advertising contracts colliding with proprietary product advertising. Careful contract management is essential here.

Legal Responsibility & Liability in the Influencer Business

Influencers and their start-ups operate within a complex legal framework of responsibilities. They bear responsibility toward consumers and the public, ensuring compliance with laws and avoiding misleading information. Additionally, they are liable to business partners for contractual obligations. Important aspects of liability include:

Provider Identification and Imprint Obligation

Influencers who operate online presences for business purposes are subject to the imprint obligation under Section 5 of the new Digital Services Act (DDG), which replaced the Telemedia Act. This means every social media channel that is not purely private must provide an easily recognizable legal notice with the name, address, and contact details of the provider. Many influencers use Linktree or story highlights to link their legal notice. A violation can be penalized as an administrative offense and result in warnings.

Among other things, the DDG implements the EU requirements from the Digital Services Act (DSA) and strengthens transparency obligations. Tip: Influencer start-ups should clarify early on who is acting as the provider. It often makes sense for the established company to appear in the legal notice, rather than the private individual, to focus liability on the legal entity.

Advertising Labeling and UWG

As mentioned earlier, influencers must clearly label advertising. Failure to do so risks warnings from competitors or associations due to unfair competition (Sections 5a VI, 3 UWG) or proceedings by the media supervisory authority for concealment. German media authorities classify a lack of labeling as surreptitious advertising, which is inadmissible under the German Interstate Media Treaty (MStV).

Since the BGH rulings of September 2021 (influencer cases "Luisa-Maximilian," "Flying Uwe," etc.), it is clear that labeling is mandatory as soon as there is consideration. However, even without consideration, labeling may be necessary if the post is objectively promotionally exaggerated. Influencer start-ups are liable in two ways: the influencer is liable for their posts (often as the perpetrator of the infringement), but the management or agency can also be liable as a contributor or participant if involved in the publication. For more details on this topic, refer to our article on liability of influencers and agencies for advertised products.

Internal guidelines are therefore essential to check every post for legal compliance. The newer EU rules (DSA) also require platforms to provide tools to flag paid posts and for users to report illegal content. Influencers must therefore expect stricter platform checks.

Criminal Law Risks

In principle, no different criminal laws apply to influencers than to other citizens, but their public activities harbor special risks. Cases of insult or defamation (Sections 185 et seq. StGB) are conceivable, for example, if an influencer disparages third parties in a "diss track" or video. Content that is harmful to minors (Section 184 StGB ff. for pornography, Section 130 StGB incitement to hatred, etc.) can also become relevant, especially in the case of controversial pranks or political content.

Influencers are personally liable for criminal offenses they commit. The startup as a company may be subject to fines under the OWiG or (in future) under the Verbandsanktionengesetz (Association Sanctions Act) if managers commit criminal offenses in the company's interests. Violations of the Art Copyright Act (publication of images without consent) or copyright infringements (e.g., use of protected music without a license) can also result in criminal charges.

An influencer startup must therefore implement compliance rules to minimize criminal risks. This includes, for example, no use of copyrighted content without permission, careful handling of statements about third parties, and youth protection filters for certain content.

Platform Responsibility and Liability of Intermediary Platforms

Large platforms such as YouTube, Instagram, or TikTok are not (yet) liable for user content under the DSA and the E-Commerce Directive as long as they have no knowledge of legal infringements and delete them quickly after notification (notice-and-takedown principle). However, influencers themselves are content creators and are therefore directly responsible for legal violations in their posts.

What is new is that the Digital Services Act also makes influencers responsible as supporters of commercial communication. They must ensure that their content is not illegal or misleading. Platforms must provide reporting mechanisms that can be used to report offensive or illegal influencer posts. For influencer start-ups, this means they must expect their content to be removed more quickly if it violates the law, which in turn can lead to a loss of revenue (demonetization).

At the same time, platform T&Cs usually have liability exemptions. Influencers must indemnify the platform operator if a claim is made against the latter due to the influencer content. This means that if, for example, an influencer video uses music in breach of copyright and YouTube is liable for this, YouTube could take recourse against the influencer. You should be aware of these contractual indemnification clauses in the platform T&Cs and minimize the risk as far as possible by clearing your rights before publication. Our article on liability of platform operators for illegal user content is highly relevant here.

Liability Towards End Consumers

An interesting question is whether influencers are liable for damages suffered by followers as a result of their recommendations. For example: An influencer promotes a certain financial product or a health-related life hack, and a follower suffers damage. In principle, the influencer is not liable in the same way as a salesperson or consultant, as there is no direct contract with the follower.

Liability in tort would only come into consideration in the event of a breach of absolute rights (life, health, property) and intent or negligence. For example, if false health promises are made, tortious liability could arise due to § Section 823 (2) BGB in conjunction with the Therapeutic Products Advertising Act. However, in practice, such cases are rare.

In France, however, it was regulated in 2023 that influencers are subject to strict advertising restrictions for certain industries, such as financial products or medical interventions. Violations there can also have consequences under civil law. In Germany, one could consider liability for misleading advertising under the Unfair Competition Act (UWG), but this is primarily asserted by competitors, not by consumers directly.

However, if an influencer advertises their own product (e.g., cosmetics) and consumers suffer damage due to a defective product, the influencer's company is liable under product liability and warranty. If the influencer himself is a manufacturer or importer, he may even be liable under the Product Liability Act regardless of fault.

Contractual Liability Towards Partners

Influencer start-ups enter into many contracts with advertisers, agencies, platforms, and service providers. The fulfillment of these contracts creates liability risks in the event of poor performance or non-fulfillment. For example, an influencer undertakes in an advertising contract to make five Instagram posts but fails to do so or posts late. The contractual partner can claim damages or assert contractual penalties if agreed upon.

Contracts should therefore contain realistic obligations and, if necessary, limitations of liability, such as limitation to direct damages or exclusion of consequential damages, to reduce the risk. Conversely, the influencer also wants to be protected against liability if, for example, the advertised product has defects. Influencers often demand a clause stating that the client is responsible for the legality of the content and product information provided and indemnifies the influencer against third-party claims. This can prevent the influencer from being liable for false advertising claims made by the manufacturer.

In summary, the influencer business requires all-round compliance. From imprint obligations and advertising law to criminal law and contract fulfillment, influencer start-ups must ensure they meet their responsibilities. It is advisable to maintain internal checklists, verifying that all posts are correctly labeled, licenses are available for all content, and legal notices are up-to-date. Seeking legal advice in case of doubt is crucial to avoid expensive liability cases.

International Liability Models: Comparison of Germany, USA, UK, Madeira, UAE

Since influencers operate globally, it is worth examining different jurisdictions. The legal framework for influencer marketing and liability varies considerably in some cases.

• Germany

  Germany is considered relatively strictly regulated in terms of labeling and media law. Influencers fall under the UWG and the Interstate Media Treaty, which requires clear labeling and enables official supervision. However, the German legal tradition also protects freedom of opinion. Purely opinion-based statements do not need to be labeled, even if they contain positive statements about products; only a commercial intention triggers the labeling obligation. Platforms still enjoy liability privileges similar to the USA (keyword: Section 7 TMG a.F., now DDG), but the DSA brings adjustments here.

  Contractually, influencers in Germany often operate as independent service providers. Restrictions apply to exclusive management contracts, as discussed in the section on artist retention.

• USA

  In the USA, there are no specific laws for influencer advertising at the federal level. Instead, the FTC (Federal Trade Commission) issues guidelines. According to the FTC Endorsement Guides, influencers must clearly disclose if a post is sponsored, for example, by using #ad or clear language. Enforcement is carried out by the FTC, which can impose penalties, and by social media platforms that include these rules in their standards.

  An important special feature in the USA is Section 230 of the Communications Decency Act, which largely protects online platforms from liability for user-generated content. This means influencers can post content without the platform being liable, unless it concerns copyrights or federal offenses. However, influencers themselves can be held liable for false advertising promises; there have been cases where the FTC issued warnings to influencers for surreptitious advertising.

  Unlike in Germany, warnings from competitors are less centralized; enforcement is more focused on authorities and class actions. There is also no legal notice requirement in the USA, but it is often advisable to provide contact information for transparency. Liability claims have been brought by consumers against influencers for recommendations, such as the Fyre Festival incident, where influencers promoted an ultimately fraudulent event. Under Californian law, liability could arise from negligent misrepresentation, for example. However, US law emphasizes consumer responsibility more strongly, posing hurdles for such lawsuits.

  For contracts with influencers, there is typically a great deal of contractual freedom in the US. However, in the case of exclusive relationships, courts could check for unconscionability, questioning whether an agreement is immoral.

• UK (United Kingdom)

  Similar to Germany, there is a labeling obligation in the UK, but this is primarily monitored by the Advertising Standards Authority (ASA). The ASA has specific guidelines, for instance, requiring #ad or #advert to be clear and prohibiting hidden advertising. Violations lead to public reprimands and can be forwarded to the CMA. In 2021, the UK published a list of defaulting influencers who had failed to label correctly on several occasions, an embarrassing approach by the ASA.

  Furthermore, influencers in the UK may be considered "media service providers" if they generate significant income from their activities, which can trigger regulation under the Ofcom Broadcasting Code. Contractually, British influencer contracts are subject to common law; restraint of trade principles could overturn excessively long exclusive relationships. Platforms in the UK have their own adjustments after Brexit, but are essentially similar to the EU/US model.

• Madeira (Portugal)

  Madeira is not an independent country but part of Portugal, with a special tax status. For influencers, Madeira is known for its tax advantages, such as low income tax for non-habitual residents and a 5% corporation tax in the free trade zone. Legally, however, Portuguese/EU law generally applies there. Portugal has implemented the EU directives on unfair competition, meaning influencers must also label advertising here, with rules corresponding to the EU-wide harmonized Directive 2005/29/EC on unfair commercial practices.

  However, the supervisory authority in Portugal is less active in individual influencer cases than in Germany or the UK. Nevertheless, the Portuguese food authority has already investigated influencers who spread unverified health claims. Those who emigrate to Madeira therefore enjoy tax advantages but no liability relief, as EU standards such as the DSA still apply.

  Important: Many German influencers who move to Madeira retain their German audience. This means they are also effectively subject to German law. German courts could assume the applicability of the German Unfair Competition Act in the event of infringements if there is a market connection to Germany. However, the choice of Madeira changes the jurisdiction and enforcement issues. Plaintiffs may have to sue abroad or enforce judgments there, which can be an obstacle. In short, Madeira offers tax exemption but not a legal vacuum for influencer-specific obligations.

• UAE (United Arab Emirates, in particular Dubai)

  The Emirates have issued their own regulations to curb the uncontrolled growth of influencer marketing. Since 2018, influencers based in the UAE who post commercially require a state license from the National Media Council (NMC). This e-media license costs around AED 15,000 per year (approximately €3,500-4,000) and aims to create transparency. Anyone who advertises without a license risks fines (minimum AED 5,000 per violation).

  Additionally, the UAE prohibits certain content and advertisements for moral reasons. For example, no advertising for alcohol, gambling, or immoral content is allowed. Influencers must also respect local laws such as blasphemy bans and Sharia requirements; revealing images or LGBTQ+ content could cause legal problems. Platforms are also active in monitoring in the Gulf region. In Abu Dhabi, the media regulator requires separate registration in addition to the NMC license.

  Influencers in the UAE are liable under media laws and criminal law, which is stricter (e.g., online insults can lead to prison sentences). An influencer startup in Dubai must therefore obtain a special influencer license in addition to a business license. On the positive side, this regulation creates legal certainty and professionalism, which also signals to investors that influencers are a recognized business model, albeit at the cost of state control.

In summary, the international comparison shows that the basic principles, such as advertising labeling and platform liability privilege, are often similar. However, there are significant differences in enforcement and additional obligations. France, for example, issued very detailed rules on prohibited promotions (e.g., cosmetic surgery, certain financial products) in 2023, binding influencers more closely than in Germany. In the USA, on the other hand, there is more self-regulation with official monitoring.

For influencer start-ups that operate internationally, it is advisable to consult local legal expertise to set up compliant campaigns in the UK, USA, or Middle East. Contracts with influencers should verify which law is applicable clause-by-clause and whether the influencer guarantees compliance with local laws (labeling, etc.). In case of doubt, contracts can also stipulate that the influencer must comply with the strictest applicable rules to roll out global campaigns risk-free.

Trademark Protection Strategies for Influencers and Personal Brands

A strong personal brand requires solid brand protection to prevent imitation and free-riding. Influencers should therefore utilize various legal instruments early on.

Trademark Registration of the Name or Pseudonym

The name of the influencer, whether civil name or stage name, can be protected as a trademark if it is distinctive. In Germany, Section 3 (1) MarkenG stipulates that all signs, including personal names, are eligible for trademark protection if they can distinguish goods/services. Many influencers register their names in relevant classes, such as class 41 for entertainment/services of an entertainer, class 35 for advertising, or class 25 for clothing for merchandise.

Registration provides the exclusive right of use for the protected classes. This means third parties may not use the name for similar goods/services without a license. Important: For very generic pseudonyms, registration may fail due to a lack of distinctiveness. Trademarks that are merely descriptive or offend common decency will also be rejected (Section 8 MarkenG). A thorough trademark search in advance is essential to avoid collisions with older trademarks.

If the influencer is internationally active, an EU trademark (protection in all EU countries via EUIPO) or even an international registration via WIPO is an option. For example, the influencer "Pamela Reif" has registered her name as a European Union trademark for protection throughout Europe. Trademark protection allows the influencer startup to take action against copycat products, such as third-party fan merchandise with the influencer's name/image, via a warning letter and injunction. Additionally, the trademark can be licensed. An investor or partner could obtain a trademark license to use the name on products, generating additional income. You can find more information on this in our article Trademark protection for start-ups.

Protection of the Logo/Slogan

Many personal brands use a logo, an abbreviation, or a slogan, such as a characteristic hashtag or greeting. These can also be protected under trademark law. Logos can be protected as a figurative mark or word/figurative mark, and slogans as a word mark if original enough. For instance, the YouTuber "Unge" has trademarked his monkey logo to use it exclusively on merchandise. Slogans must be distinctive and not merely descriptive. If registration is successful, the same rights apply: prohibition rights vis-à-vis third parties and positive exploitation through licenses.

Right to a Name (Section 12 BGB)

Independent of trademark law, the right to a name exists for civil names and established artists' names. Section 12 BGB offers protection against unauthorized use of the name, particularly in cases of usurpation of a name. This occurs if someone commercially uses the same name without authorization, creating confusion of attribution. The right to a name also applies if, for example, no trademark protection exists or is possible because the name has not been registered as a trademark.

If a third party uses the influencer's name for similar offers and provokes confusion, the influencer can demand injunctive relief in accordance with Section 12 BGB. However, name protection is limited. It applies primarily against name-related use, not against all forms of use. Additionally, more famous names must already have a reputation for Section 12 to apply. For completely unknown names, there is no risk of confusion and therefore no injunctive relief.

For established personal brands, however, Section 12 is an important addition. For example, if someone registers domain names with the influencer's name to intercept users, action can be taken under Section 12 (BGH "ruhrgebiet.de" case law). Practical tip: Influencers should also secure the most important domains (e.g., ".de," ".com" with their artist name) to prevent cybersquatting. Our article on social media accounts provides additional context on protecting online identity.

Copyrights and Ancillary Copyrights

Although the brand is the primary property right for the name, there are also property rights in the content itself. Photos of influencers are subject to the photographer's copyright, but the influencer usually has a say through contracts (model release) and can assert personal rights to their own image. Self-created images/videos by influencers can be protected as photographic works (Section 2 (1) No. 5 UrhG) or at least photographic images (Section 72 UrhG).

This means if someone uses an influencer's photos commercially without permission (e.g., to advertise for their own purposes using the influencer's image), they are infringing copyright and possibly the right to the image. Influencer start-ups should be aware of these rights and take consistent action against infringements, often via a warning letter from a lawyer with reference to Sections 97 UrhG (omission, damages) and 22 KUG (publication without consent). Under trademark law, certain iconic images can also be protected as a figurative mark, though this is rare. Theoretically, a striking portrait could be registered as a trademark, but in practice, the name or logo is more commonly protected. Further insights into digital image rights can be found in Legally compliant publication of AI images.

Merchandise and Product Designs

If influencers design their own products, such as fashion, design law (registered design) may become relevant. A distinctive logo on clothing is protected by the word/figurative mark. The clothing design itself could be protected as a registered design if it is new and unique. In practice, influencers usually rely on trademark and copyright for graphics and motifs.

Brand Defense and Enforcement

A protection strategy means not only registering but also enforcing rights. Influencer start-ups should pursue a monitoring strategy. This includes setting up trademark monitoring to detect similar registrations or checking online marketplaces for unlicensed fan articles. The trademark owner is entitled to injunctive relief, information, and damages against trademark infringers (Sections 14, 19 MarkenG). Warnings are often issued first. For example, the influencer "Dagi Bee" successfully took action against an online store that offered cosmetics under her name without authorization.

Caution: If the influencer's name also has descriptive meanings or double meanings, differentiation is necessary. For example, if someone named "Apple" is known as an influencer, they still cannot prevent the word from being used in common parlance. The protection always refers to use as a trademark in the course of trade in a way that causes deception as to origin.

Protection Abroad

Personal brands are often globally active. Trademark protection is territorial; a German trademark is only effective in Germany. For an EU-wide presence, the EU trademark makes sense, registered with the EUIPO for protection in all EU member states. In terms of costs, this is more efficient than many individual trademarks. For other countries (USA, Asia, etc.), an international registration based on national trademarks can be made via WIPO.

Influencers with a large US fan base, for example, should consider registering their name as a trademark in the USA (with the USPTO) to protect themselves from free riders there. A key difference is that in the USA, trademark rights are often linked to actual use (use principle), whereas Europe has registration systems. Therefore, it may be necessary to actually use the name in commerce in the USA to have fully enforceable trademark rights.

Social Media Accounts

An idiosyncratic aspect concerns handles/usernames in social media. Although they are not "protected" in the traditional sense, they are covered by the platforms' terms and conditions. Instagram and TikTok, for example, prohibit the trading of accounts or usernames. If someone creates a similar-sounding account name that causes confusion, action can often be taken via platform reporting (impersonation accusation). Some influencers have successfully had fake accounts with their name deleted this way. Legally, Section 12 of the German Civil Code (BGB) can be cited by analogy here, but the pragmatic route via the platform is usually quicker.

Trademark strategies are therefore a must for every influencer startup. The personal brand should be viewed as a valuable asset that can be actively managed, protected, and licensed. A combination of trademarks, names, and contractual rights ensures that the commercial exploitation by the startup remains exclusive and is not diluted by third parties.

Contractual Design: Management Contracts, Exploitation of Reach, Sunset Clauses, Buy-out vs. License Model

The heart of an influencer start-up is often the contract between the influencer (as a person) and the management or their own company. This contract regulates how the influencer’s reach and personal rights may be used commercially. Important contract types and clauses include:

Influencer Management Contract

This contract is comparable to an artist management contract in the entertainment industry. The influencer agrees to work exclusively with the manager/agency for a certain period. In return, the manager undertakes services such as acquiring advertising deals, organization, PR, etc. Typically, the manager receives a share of the revenue generated by the influencer, often around 20%. Important points include:

• Exclusivity: It is usually agreed that the influencer will not involve any other agents and will refer all inquiries to the manager. Caution is advised, as excessive exclusivity can be problematic.
• Term: Often for a fixed term (e.g., 2 years) with an option to extend or for an indefinite term with a notice period. BGB § 627 is relevant here. In service contracts of a "higher nature" (based on a personal relationship of trust), the party obligated to perform the service can terminate the contract at any time. An influencer management contract could fall under this, giving the influencer a legal right to terminate at any time. This is why agencies often try to contractually waive Section 627 BGB. However, it is controversial whether this is effective for genuine confidential services; many lawyers believe that Section 627 is mandatory for personal and confidential services. The agency seeks planning security, which often leads to fixed terms and contractual penalties for premature termination.
• Services: The contract should clearly outline what the manager does (e.g., contract negotiations, brand development, scheduling) and what the influencer must deliver (e.g., regular content, coordination with the manager before major decisions). It is often also stipulated that the manager may act on behalf of the influencer (power of attorney/agency power of attorney).
• Remuneration: Percentage participation is customary. Net sales from cooperations, campaigns, etc., are shared. Important aspects include the definition of the assessment basis (inclusive/exclusive of VAT, deduction of costs?) and the due date (e.g., as soon as the customer pays, passed on to the manager on a pro rata basis).
• Termination and after-effects: This is where sunset clauses come into play.

Sunset Clauses (Post-Contractual Revenue Sharing)

A sunset clause stipulates that the manager will continue to participate in certain income generated by the influencer after the contract ends. This protects the manager, who may have initiated deals during the contract term that are not fully realized until later. For example, if an agency negotiates a lucrative advertising contract shortly before the contract ends, and the influencer terminates the management contract to conclude the deal directly and save the commission, a sunset clause prevents this.

Common arrangements include the manager receiving 100% of the original commission for one year, 50% for a further year, and then no further participation for deals initiated or concluded during the term. It is important that such clauses are appropriately limited in amount and duration. Otherwise, there is a risk of invalidity due to immorality (§ 138 BGB) or as an unreasonable disadvantage under general terms and conditions law.

Case law (e.g., LG Potsdam, judgment of 2.6.2021 – 2 O 101/20) has rejected a sunset rule that provided for 100% for 1 year and 60% for 2 further years as immoral, as it excessively curtails the influencer's professional freedom. As a rule of thumb, legal literature suggests a maximum of 25% commission for 1-2 years post-contract. Additionally, only specifically brokered transactions may be covered, not all of the influencer's future income. Transparency is important: the clause must clearly define which income is covered. Stricter rules are more tenable in individual negotiations than in pre-formulated contracts (keyword: GTC control). Overall, sunset clauses serve to hedge the management's investment risk but must be fairly balanced to be sustainable. Our article on extraordinary termination options for influencer contracts may provide further context.

Contractual Penalties and Severance Clauses

A tricky issue is how to prevent an influencer from leaving a contract prematurely, for instance, to switch to another manager without commission. Some contracts contain contractual penalties in the event of premature termination in breach of contract. Alternatively or additionally, there are severance clauses. These define a payment the influencer must make if they terminate before the contract expires. The concept is similar to the compensation claim for commercial agents (Section 89b HGB), only in reverse, where the "represented party" (influencer) pays the agent.

Such provisions are generally permissible but subject to restrictions. They must not be excessively high and must be transparent. If the contract is classified as a GTC, Section 307 BGB (prohibition of unreasonable disadvantage) applies. An excessive lump sum could be assessed as a contractual penalty and possibly mitigated (Section 343 BGB) or be completely invalid. Therefore, moderate amounts or a degressive structure, where the severance payment decreases as the term of the contract progresses, are advisable.

It should also be clear that no severance payment is owed if there was good cause for termination, such as a breach of managerial duties. Such clauses safeguard the management but simultaneously restrict the influencer's professional freedom. In case of doubt, courts tend to protect the influencer, as is common with artist contracts. Severance clauses must therefore be carefully considered and formulated in a legally sound manner.

Reach Exploitation and License Models

Reach exploitation refers to all measures that convert the influencer's following into sales. Contractually, this can be done via license agreements. For example, the influencer could license their own company or an agency the right to enter into collaborations in their name, reuse their content, or sell merchandise with their name. The advantage of a licensing model is that the influencer remains the owner of their intangible assets (name, brand, content) and only grants rights of use. In return, they receive either license fees or a share of the revenue.

In contrast, a buy-out model would mean the influencer sells or transfers certain rights in full. An extreme example: an influencer sells their entire brand (name, social media accounts, content) to a company, which then continues to operate it independently. Such buy-outs are rare, as the personal involvement of the influencer is usually inseparable. In practice, however, there are cases where influencers separate from their own company, for example, when an influencer startup with several talents is sold, including the contracts with these talents.

In such cases, it must be contractually clarified in advance whether the contracts are transferable at all. They often involve personal services that cannot be transferred without consent (Section 613 BGB analogously). Licensing models are more flexible. For instance, the influencer licenses the rights to use their content and name to their own GmbH so that the GmbH can exploit it commercially. Investors then invest in the GmbH (not directly in the person), which makes the investment more legally tangible. However, the license should be exclusive, long-term, and preferably irrevocable for a certain period so that investors have planning security. Here again, you can work with injunctive relief subject to contractual penalties if the influencer breaches exclusivity.

Remuneration Models: Revenue Share vs. Fixed Salary

In some constellations, such as when the influencer and startup are de facto identical, the influencer may receive a salary or managing director's salary. This has implications under labor and tax law. Performance-based models remain more common. The influencer receives distributions or dividends as a shareholder in the company, while the operating business collects all income. Alternatively, they remain an external service provider on a commission basis.

In this case, it is important to optimize the tax structure, possibly combining a salary for social security with a bonus. For contracts with external service providers (e.g., other team members, ghostwriters, photographers), it should be clearly regulated who is entitled to the rights to the content created. Usually, this is the startup, with unlimited use so that the influencer content remains consistently usable, even if individual team members leave. Our article on the editing contract highlights the importance of such clear regulations.

Other Contractual Clauses

Non-compete clauses and non-solicitation clauses are also noteworthy. Non-compete clauses could prohibit the influencer from working with competitor agencies or products during the contract term and, to a limited extent, thereafter. However, such non-compete clauses after the end of the contract are subject to Section 74a HGB by analogy (for freelance commercial agents and probably artists by analogy). More than 2 years are ineffective, and compensation must be paid if a post-contractual non-compete clause is to be enforced. Many influencer contracts omit this, as it is difficult to enforce.

Non-solicitation clauses can stipulate that the influencer will not attempt to poach the manager's customers/collaboration partners or, conversely, that the manager will not poach other talent. This is more moderate and more permissible as long as it is limited in time.

In summary, it is crucial to find a balance when drafting contracts. On the one hand, the influencer should be contractually bound and made predictable for the startup and investors. On the other hand, the contracts must not be so one-sided that they fail in court or damage the relationship of trust. Clear, fair rules on remuneration, obligations, and termination are essential. Sunset and exit clauses must be carefully formulated and appropriately limited. Ideally, agreements should be individually negotiated to avoid problems with general terms and conditions. In case of doubt, specialized legal advice should be sought, as this complex of contracts forms the foundation of the influencer startup.

Artists' Rights in Case Law: BGH "Heintje," OGH "Kiesbauer" and Co.

The commitment of artists, including influencers as modern "internet artists," through long-term contracts has always been subject to judicial assessment. Two frequently cited cases serve as examples:

BGH "Heintje"

This classic case concerned the child star Heintje (Hendrik Simons), who became famous as a singer in the late 1960s. His parents or representatives had concluded very long-term exclusive contracts with a management/record label. The case came before the German courts, raising the question of how far such a contract could inadmissibly bind a minor. The exact reference is OLG Hamburg 3 U 21/69 ("Heintje"), cited in GRUR 1970, 38.

The OLG ruled, mutatis mutandis, that contracts with underage artists are subject to particularly strict standards. An exclusive commitment lasting for years, which effectively places the entire development potential of the young artist in the hands of a contractual partner, was classified as immoral (Section 138 BGB). While the case predates modern youth protection regulations in the BGB, the core consideration was that an indefinite or unusually long-term commitment of an artist to a contractual partner unreasonably restricts their personal freedom.

From this, case law has generally derived that Section 138 of the German Civil Code (BGB) can apply to so-called adhesion contracts in the artistic field. In subsequent cases, such as those concerning musicians and artist agency contracts, the Federal Court of Justice has examined whether a contract "enslaves" the artist economically and artistically or whether sufficient freedom remains. In particular, if a contract provides for one-sided advantages for the management (e.g., excessive profit sharing, extensive exploitation rights, long terms without termination options), it is carefully examined whether the limits of common decency have been exceeded.

OGH "Kiesbauer"

This case came before the Austrian Supreme Court. In the 1990s, the well-known TV presenter Arabella Kiesbauer had an exclusive contract, presumably with a TV station or management, from which she wanted to withdraw prematurely. The Supreme Court ruled (judgment around 1997/98, often quoted as "Kiesbauer judgment") that freedom of contract also allows long-term commitments. However, excessive commitment can be immoral in the case of personality-related services, analogous to the German view.

Specifically, the Supreme Court is said to have given greater weight to Ms. Kiesbauer's freedom to continue her professional activities than the contractual partner's interest in fulfilling the long-term contract. One lesson from this was that time limits and termination options are essential in such contracts. Exclusivity clauses that prevent an artist from working elsewhere must not exceed a certain level. In the film and music sector, for example, industry-standard maximum terms apply, often 3-5 years, with renewal options, but not "for life." It was also discussed whether an exit clause against payment of appropriate compensation (a type of severance) was necessary to maintain balance.

German Case Law in General

In addition to "Heintje," there are various BGH rulings on artists' contract law. For example, a BGH ruling from 1985 (I ZR 28/83) referred back to "Heintje" in a copyright context. The "Margot Eskens" ruling (BGH, 1968) was also a well-known case involving a pop singer, in which the transferability of an exclusive artist contract was questioned.

The quintessence in Germany: For exclusive artist contracts, an appropriate maximum commitment must be agreed upon, and the artist must have sufficient scope for development. Additionally, the contract must be fairly balanced in terms of performance and consideration. In "Heintje," it was criticized that the young singer ceded virtually all exploitation rights and received a comparatively small share in return, an imbalance that indicated exploitation. Such contracts are considered immoral and void.

Analogies to Influencers

Influencer management contracts are essentially modern artist contracts, and the same principles are likely to apply. An excessively long contract without the influencer being able to terminate it could be overturned by German courts. The same applies to an overly comprehensive sunset clause that effectively binds the influencer financially to the old manager for years after termination. The Potsdam Regional Court in 2021, for example, found such a clause to be immoral for this very reason.

Courts would examine whether the influencer's professional development is unduly inhibited by the contract. They would also consider if there is usury, meaning an extremely unfavorable relationship between the contributions of both parties, or if a dominant position exists where the influencer had no real choice, for example, due to the management's monopoly position. All these factors contribute to the § 138 BGB assessment.

Artists' Social Security Fund & Co.

One aspect of case law is whether influencers are considered "artists" in the sense of social security law. This is particularly relevant to the discussion of bogus self-employment. In 2019, discussions arose in Germany regarding whether influencers who work as artists are subject to the artists' social security contribution. Case law on this is still scarce, but the trend suggests that influencers who produce creative content can be considered artists or publicists within the meaning of the KSVG. This has tax obligations for the agencies.

International Comparison

In the USA, the concept of unconscionability for contracts works similarly to German principles. Contracts that are extremely one-sided can be rejected by the courts. A well-known case, for instance, involved early contracts in the music industry, like Motown contracts with young artists who gave up lifelong rights, which were later deemed unconscionable. In the UK, there is the Restraint of Trade principle: a contract that unduly restricts someone's freedom to trade is unenforceable unless justified. The Kiesbauer ruling reflects this way of thinking.

All this means for influencer start-ups: You cannot absolutely "own" influencers. Any agreement must respect the influencer as a creative entrepreneur. Beware of gagging clauses; they are not only ethically questionable but can also be challenged in court. Contracts should always provide for an exit option, whether through reasonable notice periods or compensation models, to avoid violating principles of contractual fairness. This also fosters a better working relationship; influencers prefer to work with management if they know they are not stuck in a "golden cage" situation.

Labor Law Aspects and Bogus Self-Employment

One area often overlooked is employment law. Many influencers are formally self-employed; after all, they are entrepreneurs of their own brand. However, in certain constellations, the problem of bogus self-employment can arise. This occurs when an influencer is so economically and organizationally integrated into a client's structures that they de facto act like an employee. Our article on avoiding bogus self-employment offers crucial guidance.

Criteria for Bogus Self-Employment

In Germany, the German Pension Insurance (DRV) primarily checks the status of freelancers. Criteria include: does the influencer/creator work according to instructions? Is he/she involved in working hours/location? Does he/she only have one client (mono-client relationship)? Does he/she act independently on the market or only on behalf of the client? Does he/she use his/her own work equipment?

If, for example, an influencer produces content exclusively for an agency, has fixed "duty rosters," receives instructions on content and frequency from the agency team, and has no entrepreneurial decision-making power of her own, it could be argued that a de facto employment relationship exists. There have been such cases in the media industry, where freelance journalists or presenters were classified as employees if they had worked exclusively for one broadcaster for years and were treated as employees. For related risks, see liability risks for esports teams.

Consequences

If bogus self-employment is established, social security contributions must be paid, including both employer and employee contributions, potentially retroactively for up to 4 years, or up to 30 years if intentional. There is also a risk of criminal liability under Section 266a StGB (withholding of social security contributions). It would be detrimental for an influencer startup if creators or the main influencer themselves were suddenly deemed employees. This could trigger entitlements to vacation, protection against dismissal, obligations to continue paying wages, and more.

Differentiation

Influencers are often entrepreneurs in their own right. Especially if they operate their own channels and only work with agency support, they are not employed. However, the startup must be careful when working with smaller influencers and fully integrating them into the team. For example, if an agency "buys" all the rights of a TikTok artist and dictates exactly what they have to do, perhaps even requiring them to work from the agency's office, this approaches a pseudo-freelancer situation.

DRV Status Determination Procedure

In cases of doubt, you can apply for a status determination procedure with the DRV (Section 7a SGB IV) to obtain clarity. This can be useful for influencer start-ups if you are working with a talent on a long-term basis but do not want a permanent position. Such a decision creates legal certainty.

Media Case Law

Several rulings exist where cameramen, sound engineers, or freelance presenters were recognized as bogus self-employed. For example, the Federal Social Court ruled in cases of television journalists that they were bogus self-employed as they were firmly integrated into editorial processes (BSG, judgment of 31.03.2017 – B 12 R 7/15 R, concerning ZDF). For influencers, in particular, there has not yet been a supreme court ruling. However, by analogy, an eSports streamer who appears exclusively on a channel similar to a broadcaster and receives a fixed monthly fee could be considered an employee.

Employee-Like Persons

Even if influencers remain formally self-employed, they could be considered employee-like persons if they are economically dependent and comparably in need of protection (e.g., only one client, but still self-employed). In this case, at least some protective provisions under employment law apply, such as entitlement to vacation fund under the KSVG or notice periods by analogy.

Circumvention/Avoidance

How do you avoid bogus self-employment? Either actually choose employment if the involvement is very close. Employing influencers permanently can have advantages (social insurance, loyalty, predictability) but also disadvantages (ancillary wage costs, protection against dismissal). Alternatively, structure the collaboration so that the influencer clearly runs their own business. This means having their own company, possibly several clients, not working exclusively for one agency, organizing their time freely, and using their own equipment. In case of doubt, you can contractually guarantee that no employment relationship is intended, but this only provides limited protection; the actual implementation counts.

Artists vs. Employees

A small special case: artists can sometimes be both. However, in stage law (Section 1 TV Kü, Bühnen), for example, there are often fixed-term engagements that are somewhat excluded from protection against dismissal under employment law. This is not yet relevant for influencers. However, when influencers are hired for film projects, this is often done as fixed-term employees with a project-related contract.

Vacation and Working Time Issues

As self-employed individuals, influencers naturally do not receive paid vacation or regular working hours. However, caution is necessary. If a construct has characteristics of temporary employment or similar, for instance, an influencer manager "hires out" influencers to clients, labor law obligations could arise unexpectedly (AÜG issue). In such cases, the contractual structure should be clearly geared towards agency and project contracts and not resemble an "employment contract."

Overall, an influencer startup should always check the status of the persons involved. The main influencer founder is usually a shareholder-managing director; employment law does not typically apply to them if they are a controlling shareholder. Other contributing influencers should either be genuine partners, with a share in the company or their own business, or clearly freelance with several clients. If a social security audit occurs, it is advisable to have all contractual documents at hand and demonstrate that the person was entrepreneurially active (invoices to several customers, own investments, etc.). This way, you can avoid the dangerous finding of bogus self-employment.

Economic and Moral Tensions: Protection of Minors, Sexual Content, Personal Rights

Influencer start-ups do not operate in a vacuum; they often navigate gray areas between economic interests and moral and ethical responsibility. This leads to some particular areas of tension:

Sexual and Offensive Content

Many influencers generate income with erotic content through platforms like OnlyFans, lingerie shoots on Instagram, or provocative TikToks. This creates a tension between increasing reach (sex sells) and protecting minors. Young people are often among the followers. Youth protection legislation, such as the Youth Protection Act and the Interstate Treaty on the Protection of Minors in the Media, requires that developmentally harmful content is made inaccessible to under-18s.

Platforms like Instagram largely prohibit nudity, while OnlyFans allows it behind 18+ verification. An influencer startup in the erotic sector must implement strict age controls. There is also the moral question of whether young influencers should be forced to post such content. Discussions have arisen about teenagers on platforms posting revealing images in exchange for money.

From a legal point of view, welfare protection rules can apply here. Section 184c of the German Criminal Code (StGB), for example, criminalizes youth pornography, even if 17-year-olds create consensual content, its distribution is punishable. The startup must therefore draw clear boundaries: no involvement of minors in erotic content production, and no "harmless" depictions that could actually promote grooming. Morally, the management has a responsibility to protect the influencer from exploitation, avoiding content that could cause trauma or violate dignity at any cost. Contractual clauses could stipulate that the influencer may reject certain types of content, even if they would be profitable. Our article on age verification on the Internet offers relevant guidance.

Protection of Minors & Platform Rules

Influencers often have young fans, and product placements must respect their protection. It is morally questionable for influencers to advertise gambling or alcohol to a young audience. In some countries, such as France, advertising content for influencers in these areas is prohibited by law. In Germany, youth protection regulations apply in some cases; alcohol advertising, for instance, may not be targeted at minors (Youth Protection Act, UWG). Even if legal, such advertising can lead to reputational damage. Many influencers therefore refuse to advertise for certain industries, such as casinos, a much-discussed topic in the Twitch community.

A startup should establish a code of ethics: Which sponsors will be accepted and which will not? Short-term profit must not take precedence over child protection.

Personal Rights of the Influencer Themselves

Influencers often reveal much about their private lives to appear authentic. This carries the risk of blurring the boundaries between person and persona. Management has a duty to temper the influencer if, for example, private crises are exploited for sensationalist reasons, potentially damaging personal rights in the long term. For instance, if management urges an influencer to publicize their divorce or mental health problems to gain coverage, this could violate personal rights, such as the right to privacy. While the influencer ultimately decides what to share, economic pressure can be morally reprehensible.

Conversely, the startup must also respect the personal rights of others. If influencers engage in pranks where uninvolved people are filmed and exposed, this can violate their general personal rights, including the right to one's own image and honor. There is a risk of legal action against the influencer and the company. Therefore, clear guidelines are needed: no content that degrades third parties or presents them without their consent.

"Cancel Culture" and Reputational Risks

Public opinion can quickly turn against influencers perceived as unethical. This has economic consequences, as sponsors may withdraw. Therefore, upholding ethical standards is not only morally but also economically sensible. Influencer start-ups should have contingency plans for scenarios like a "shitstorm" arising from controversial content. They should also be aware of their responsibility as role models, especially when setting an example for minors. One example was the criticism of influencers who promote cosmetic surgery or propagate unattainable body images. This is hardly legally tangible but morally controversial. While now banned in France, Germany relies on self-control so far.

Protecting Influencers from Exploitation

While protecting the audience is often discussed, influencers themselves, especially young newcomers, are also at risk of exploitation by industry players, whether financially or sexually. This could be likened to "models and MeToo" situations, also conceivable in the influencer sector if, for example, a photographer crosses boundaries. The startup must have internal policies, such as requiring two people on set or avoiding ambiguous arrangements.

There should be contractual protection, especially for models and sexual content on platforms like OnlyFans. For instance, the influencer should be able to withdraw content at any time if they feel uncomfortable, though solutions must be found for existing subscriptions. The startup should also protect the influencer if private intimate images are leaked. This is a punishable offense under the right to one's own image (Section 33 KUG), and management should pursue legal action here.

Privacy and Data

Influencers often collect data about their followers, such as through newsletters or competitions. GDPR compliance is essential here. Morally, there should be no misuse, such as selling fan data to third parties without their knowledge, and respect for fan posts. Reasonable internal data protection measures are also important, ensuring, for example, that team members do not see private messages without permission. A breach of trust can damage the community. For comprehensive information on data protection, refer to our article on GDPR compliance for the self-employed.

Overall, influencer start-ups are well advised to adopt a code of conduct that goes beyond legal requirements. This could include responsible use of advertising, ensuring no content violates dignity, protecting children (e.g., no depiction of own children without protection, no sexualized content for under-18s), and transparency regarding possible digital manipulation (e.g., AI aspects: openness about filters or deepfakes to avoid setting false body ideals). Such measures not only foster good conscience but also prevent legal conflicts, as many "scandals" can quickly escalate into legal problems, such as youth protection proceedings, personality rights lawsuits, or criminal investigations. The challenge is to maintain these high standards without stifling creativity, requiring all involved to be sensitized.

Cross-Border Contract Models and Data Protection (GDPR)

Influencers often operate internationally, with fans worldwide, deals with foreign companies, and sometimes residence abroad. This brings with it a number of legal peculiarities.

International Contract Law

If a German influencer startup concludes a contract with a US advertising client, the question arises as to the applicable law and place of jurisdiction. It is customary to stipulate this in the contract through a choice of law clause or a jurisdiction/arbitration clause. Without an agreement, conflict of laws rules apply: German law may apply to service contracts under the Rome I Regulation if the influencer provides characteristic services from Germany and nothing else has been agreed. However, the foreign partner may provide its general terms and conditions with a choice of law, requiring care to ensure the influencer does not unknowingly subject themselves to foreign law with unknown implications.

Therefore: Clarity through choice of law. Many influencer agreements with global brands choose English law or Swiss law as neutral ground, often including an arbitration clause, such as ICC arbitration. It is important for the startup to monitor costs and enforceability. An arbitration award is usually enforceable internationally, while a German judgment in the USA, for example, is rather difficult to enforce, and vice versa. For additional insights, consider reading about arbitration and alternative dispute resolution.

Tax Permanent Establishment Issue

If an influencer has a company in Germany but operates from Dubai, for example, a permanent establishment for tax purposes may arise. This is only marginally relevant here but still important: The permanent establishment issue and double taxation agreements must be kept in mind. Influence on contracts: Sometimes, for tax reasons, the influencer bills for foreign business via a subsidiary or intermediate company based there.

Data Protection (GDPR)

Influencer start-ups process personal data from followers (comment lists, direct messages), customers, and newsletter subscribers. The GDPR applies as soon as the processing relates to offering goods/services to EU citizens (marketplace principle). An influencer with global reach must therefore comply with the GDPR for their EU followers. This means providing a privacy policy, obtaining consent for newsletters if necessary, and only using processors with GDPR-compliant contracts, for example, for email tools or cloud analysis. For in-depth knowledge on data protection, our article on data protection in cloud services is highly relevant.

In cases of international data traffic, data often flows to third countries, such as when a social media manager is based in the USA and accesses fan data. Suitable guarantees, like standard contractual clauses, must be put in place. Important for fans are rights to information, deletion, and more. The startup should appoint a data protection officer if necessary, typically from 10 employees regularly processing data, as per § 38 BDSG. Even if not legally required, having someone responsible for privacy internally is beneficial.

One particular issue: influencers communicate extensively via platforms like Instagram and YouTube. The platform stores the data, but the influencer uses it. According to the current view, influencers are jointly responsible for their fan pages on Facebook, for example (ECJ fan page ruling 2018). Accordingly, an Instagram influencer may also be jointly responsible for the data on their page. This is practically difficult to implement but should not be ignored. At the very least, you should link to data protection information in the bio/imprint.

Cross-Border Content Licenses

If a German startup wants to market an influencer's content internationally, such as selling clips to foreign media, the contract should specify whether the rights are granted worldwide (territorially unrestricted) or not. Otherwise, the influencer could later claim in the USA that personal rights under Californian law apply, prohibiting broadcast there. Also to be considered: language versions. If translations or dubbing are made for exploitation abroad, these must also be covered by the contract, addressing the UrhG editing right and the personality right to one's own spoken word.

International Compliance (AI Aspects)

The topic of AI should also be mentioned here. If an influencer startup uses AI-generated content, such as deepfake voices or virtual influencers, different regulations apply internationally. In the EU, the AI Regulation is coming, making transparency mandatory for deepfakes. This means that if an influencer video was actually generated by an AI, such as an avatar, it must be labeled as soon as it realistically simulates human behavior. This regulation is expected to come into force with the AI Act. This may become relevant if, for example, a deceased influencer continues to be used virtually, or an influencer multiplies their voice/face using AI for voice output in different languages. For guidance on the new regulations, refer to our article on Navigating the EU AI Act.

Such futuristic models should be anticipated in contracts. For example, who owns the training data (videos as AI training material)? Is management allowed to use a digital clone of the influencer? Probably not without an explicit agreement, as this affects general personal rights. It is better to explicitly regulate whether and how AI may be used. For further reading, check AI editing of OnlyFans content.

Arbitration Court vs. Court

An arbitration agreement is often included in international contracts. The advantage is that it is enforceable in many countries thanks to the New York Convention. The disadvantage is its cost. Mediation can be an alternative. Influencer contracts can contain a mediation clause so that international disputes can be resolved amicably before a social media war starts. This also protects the public image.

Applicability of German IP Law Abroad

If a foreign influencer with a trademark in their home country wants to appear in Germany, should they apply for trademark protection here? Conversely, if a German influencer expands to the USA, they should consider applying for trademark protection there. IP lawyers are essential in these scenarios. Domain law is also relevant. If someone abroad registers an influencer's name as a domain and uses it to direct fans, domain grabbing can be combated under UDRP proceedings, for example, for .com domains. These are international mechanisms that can become relevant.

As a result, the cross-border aspect requires a keen eye on choice of law, data protection, and IP management. It is better to invest a few more lines in the contract, for example, a detailed choice of law clause, clarification of GDPR order processing, and worldwide granting of rights, than to face the hassle of suing country by country later on. Data protection, in particular, is a compliance blocker. Some US partners may not want to sign GDPR obligations, requiring a decision on foregoing the deal or finding workarounds, such as leaving data in the EU. For influencers who transfer data internationally, for example, a team in the USA accessing an Instagram account with EU fan data, standard contractual clauses between the EU company and the US team are mandatory to ensure legal compliance. This should be considered when setting up an influencer startup.

Approaching Investors: Legal Challenges When Scaling Management Structures

For many influencer start-ups, the question of how to attract investors to fuel growth arises eventually. However, traditional venture capital providers have long been skeptical of models based solely on individuals. So, how can one overcome the limitations of the "agency mentality" and create an investable, scalable business model? And what are the legal hurdles involved? Our article on taking on investors in a startup provides valuable insights.

From Star to Structure

A central problem is the dependence on individuals. A VC investor is reluctant to invest in a company whose value is solely dependent on one person who can leave at any time. An influencer startup must therefore legally transfer the brand and reach from the individual to the company, whether through licenses or transfer of ownership. In practice, the influencer founds a limited liability company (or similar legal form), which concludes a comprehensive contract with the influencer. This contract grants the limited liability company exclusive rights, such as rights of use to content and exploitation rights to name/image, ideally on a long-term basis. This allows the value to be transferred, at least in part, from the person to the company.

Investors then recognize that the company holds contracts that do not immediately become worthless even if the influencer leaves. However, a key person risk remains. Legally, you can try to keep the influencer on board via vesting or earn-outs. For example, the influencer could have founder shares that only vest over the years, providing continuous motivation to stay. Alternatively, a good leaver/bad leaver clause can be agreed upon in the investment contract. If the influencer leaves the company before a certain time without good cause, they must return their shares more favorably (bad leaver); if they stay, they keep them (good leaver). Such corporate law mechanisms are important, but they must be carefully synchronized with employment and service contract law. For more on this, consider our article on employee retention in startups.

Scaling Through a Multi-Talent Platform

Some influencer start-ups pivot away from the single star model and build a portfolio of talents, effectively creating a talent agency 2.0 or an influencer network. This increases scalability because the company is not reliant on just one person, which investors appreciate as diversification. Legally, this means concluding management contracts with several influencers. The challenge is that a consolidation model can compete with traditional agencies, which is legally acceptable. However, one must pay attention to antitrust law if too much market share is bundled, although this is currently a remote concern in the influencer market.

Non-disclosure agreements (NDAs) and no-poaching clauses must also be agreed upon internally to prevent influencers from poaching each other within the platform or taking all customers with them upon leaving. A clear regime of contract terms and perhaps incentive systems, such as profit sharing for top talents, helps to retain network effects.

Productization of the Business Model

One way to become investable is through productization, meaning converting services into repeatable products. An example is the development of a technology platform, such as an app that connects influencers and brands. The startup then functions not just as an agency but as a tech company, which VCs often prefer. Legally, however, this introduces additional dimensions: software law, covering copyright on the code, licensing, and general terms and conditions for users, and potential platform liability, similar to marketplaces. Data law is also relevant if the platform uses data analytically, dealing with big data from followers.

The pitch to investors then becomes: "We have the software that scales influencer marketing" instead of "we manage person X." However, the existing contractual obligations of the talents must be transferred to such a platform, addressing data protection concerns like sharing performance data. Our article on ownership of software provides relevant legal context for this.

Overcoming Agency Boundaries

Traditional agencies typically experience linear growth, where more clients require more employees, limiting scalability. An influencer startup can overcome this with platform solutions that automate content creation, digitally measure reach, and streamline processes. From a legal perspective, this requires clear regulations on the intellectual property of automatically created content, data protection issues when automatically processing user data, and contractual clarifications on liability for automated errors.

Investors are particularly interested in intellectual property issues, as software-based solutions are attractive only if they remain legally secure and can be used exclusively. Additionally, general terms and conditions and licensing conditions must be carefully drafted to minimize liability risks.

The legal complexity of transitioning from a single influencer to a scalable, investable corporate structure is significant, but necessary to obtain growth capital from VCs.

Conclusion

The legal organization and entrepreneurial structuring of influencer start-ups and personal brands is a complex undertaking that requires in-depth knowledge in a variety of legal areas. The essential areas of law include, in particular, contract law, trademark law, data protection law, copyright law, and international legal issues, which must always be kept up to date to master future challenges with confidence. The particular legal challenge for influencer start-ups lies in the fact that they are often built around one or more personal brands, which in turn affect both personality rights and trademark law aspects. It is therefore necessary to comprehensively secure these brands at an early stage and protect them in the long term through strategic brand management to ensure sustainable value creation.

To ensure commercial success, influencer start-ups must choose the right monetization strategies and combine these with legally compliant contract design. The various models—from sponsored content and proprietary products to platform monetization—offer a wide range of opportunities but also harbor considerable risks if clear and forward-looking contract design is not prioritized from the outset. Particularly regarding advertising labeling obligations and liability for third-party content, there are considerable stumbling blocks that can lead to warnings or legal disputes in the worst-case scenario. Proactive legal advice and carefully conducted compliance checks are therefore essential to effectively minimize such risks.

Influencer start-ups must be particularly careful regarding data protection, as they often process considerable amounts of personal data from both followers and cooperation partners. Compliance with the GDPR and other relevant data protection laws is not only a legal obligation but also of great importance for building trust and long-term customer relationships. International legal issues arise as soon as the start-up's reach and economic focus extend beyond national borders. Here, specific knowledge of the different regulatory requirements of various countries is necessary to effectively manage liability risks and tax issues, for example.

Attracting investors and the associated scaling of an influencer startup requires a strategic solution to the central problem of dependence on individuals. Investors prefer business models that are not completely dependent on individuals but possess an independent entrepreneurial structure. This can be achieved through intelligent contractual solutions such as exclusive license and transfer agreements that secure the startup long-term usage rights to the brands and content. Corporate law instruments such as vesting regulations, earn-out mechanisms, and good leaver/bad leaver clauses also help to ensure the long-term commitment of key individuals and thus make the company valuation attractive.

In addition, the diversification of the business model—for example, through the development of a multi-talent platform or technology platforms for automated reach marketing—opens up significant growth potential and simultaneously reduces the risk for investors. However, such scalable solutions require additional legal considerations, for example, in the areas of intellectual property, platform liability, and competition law. Clear and comprehensive contractual regulations on intellectual property, rights of use, limitations of liability, and data protection issues create the necessary basis for sustainable growth and investor confidence.

In summary, it can be said that the long-term prospects of an influencer startup depend crucially on whether the legal challenges are taken seriously and systematically addressed from the outset. Influencer start-ups can only develop their full potential with a comprehensive legal strategy that both protects the personal brand and creates suitable structures for scaling and attracting investors. The effort required for precise legal structuring pays off several times over in the long term: in the form of reduced risks, increased willingness to invest on the part of external investors, and ultimately sustainable, secure commercial success.