Dual representation at influencer agencies – a legal minefield?

As an influencer agency, you face the daily challenge of representing your clients’ interests in the best possible way and at the same time brokering profitable collaborations for all parties involved. However, representing multiple parties can quickly lead you into a legal minefield – especially when it comes to dual representation. In this blog post, I would like to shed some light on what dual representation is all about, the dangers it entails and how you as an agency can deal with it. Because one thing is clear: only those who know and observe the legal rules can be successful in the long term and gain the trust of their clients. As a lawyer with many years of experience in the field of influencer marketing, I know what is important and would like to give you valuable tips on how to avoid legal pitfalls. Let’s take a look together at the topic of dual representation and find out how you can deal with it as an agency.

What is double representation?

Dual representation – it sounds harmless at first, but it can have far-reaching consequences. But what exactly does this term actually mean? Dual representation is when an agency represents the interests of both the influencer and the company. This may seem tempting at first – after all, you have all the strings in your hand and can optimize the collaboration. But be careful: you can quickly find yourself in a conflict of interest here. As a dual representative, you are faced with the almost impossible task of negotiating the best possible conditions for both sides. In practice, this often leads to one party being favored – and the other feeling disadvantaged. Dissatisfaction arises, mistrust grows and, in the end, the business relationship may even be at stake. As an agency, you should therefore make it clear from the outset who you represent and in whose interests you are acting. This is the only way to create a solid basis of trust and avoid unpleasant surprises. Of course, you also need to be able to communicate with all parties involved and understand their needs. But beware: communication is not the same as representation of interests! It is important to draw a clear line here ^.

Dual representation in brokerage law – a comparison

Let’s take a look at the German Civil Code (BGB), or more precisely Section 654, which regulates dual agency for estate agents – and the provisions are clear: if an estate agent acts for both parties in breach of contract, they lose their entitlement to remuneration and reimbursement of expenses. The legislator wants to ensure that brokers always act independently and in the interests of their clients. Dual activity is only permitted if the brokerage agreement expressly allows this. Otherwise, this constitutes inadmissible dual representation – with all the consequences. Brokers must therefore pay close attention to who they represent and in whose interests they are acting. And they must also communicate this clearly so as not to raise false expectations. At the same time, it is also their job to stay in contact with all parties and find out their wishes and ideas. This is the only way they can successfully mediate in the end. There is a fine line between communication and representation of interests – and every broker has to master it anew every day.

Dual representation with influencer agencies – what you should bear in mind

Even if influencer agencies cannot be equated one-to-one with brokers, many parallels can be drawn. After all, in both cases, the aim is to mediate contracts between two parties while protecting the interests of their own clients. If an influencer agency acts as a dual representative, it is treading on thin legal ice. Conflicts of interest are practically inevitable, especially if it acts as an intermediary for both parties. Therefore, my urgent advice: disclose from the outset who you are representing and for whom you are taking sides. This is the only way to create trust and put the collaboration on a solid footing. Of course, it is also part of your job to talk to influencers and companies alike and understand their needs. But don’t confuse communication with advocacy! Make it clear that although you are open to everyone, you are ultimately only committed to your clients. This may sometimes be uncomfortable, but it is the only way to avoid legal pitfalls and be successful in the long term.

Inadmissible double representation – what are the consequences?

Hand on heart: unauthorized dual representation may seem tempting, as it promises seemingly full control over the collaboration. But the consequences can be devastating. First of all, there is the nullity of the contract. Similar to brokerage law, a contract that was concluded in violation of the prohibition of dual representation could be invalid from the outset. The consequence: it is as if the contract had never existed – with all the consequences. In addition, there is a risk of claims for damages if one party suffers loss as a result of the inadmissible dual representation. If, for example, a company makes investments in reliance on the contract that later turn out to be useless, it can hold the agency liable. And finally, there is the risk of lasting damage to reputation. Who wants to work with an agency that is known for unlawful double representation? Influencers and companies will think twice about doing business with you in the future. It is therefore in your own best interest to take the issue of dual representation seriously and do everything you can to avoid conflicts of interest.

My conclusion: clear boundaries are the key to success

The legal situation surrounding dual representation at influencer agencies may not yet be fully clarified. However, one thing is certain: as an agency, you are well advised to draw clear boundaries and limit yourself to representing one party. This is the only way to avoid conflicts of interest and stay on legally safe ground. Transparency is the be-all and end-all – both when communicating with your clients and when drafting contracts. Don’t be afraid to address uncomfortable topics openly and create clear conditions. Of course, you also need to be able to communicate with all parties involved and understand their concerns. But draw a clear line here: communication is not the same as representation of interests! Only if you maintain this boundary can you be successful in the long term and gain the trust of your clients. If you are unsure how to proceed in a specific case, don’t be afraid to seek legal advice. Because only if you know and observe the legal rules of the game can you concentrate fully on your core business: Arranging profitable collaborations between influencers and companies.

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.