Market Headwinds 2025: Legal Risk Management for Brands

As brands plan for 2025, they confront significant market headwinds. Political shifts are creating seismic changes in corporate priorities and consumer preferences. Climate events highlight unpredictability even in business environments. Even as brands adopt generative AI tools to boost efficiency and creativity, consumers are craving more personal interaction. To thrive in this environment, brands need to be nimble and agile. Here are seven legal risk areas for brands to track as they adapt their advertising and marketing strategies.

Contractual Obligations:

Brands may need to reposition to keep up with changing consumer values. In so doing, review existing contracts and partnerships. Some pivots may conflict with existing exclusivity clauses or brand association restrictions. Proactive legal review can prevent costly disputes.

Advertising Substantiation:

Brands may rejigger their advertising content to respond to evolving consumer preferences. All claims must be substantiated, specific, and verifiable. They also need to consider applicable regulatory guidance. For example, to avoid problematic greenwashing, brands should consider the FTC’s  Green Guides. Similarly, any wellness or health claims must comply with FTC’s broadened Health Products Compliance Guidance. In addition, at the end of 2024, the FDA announced a final updated rule for “healthy” labeling on food products. Remember that a brand is responsible for all reasonable net impressions of its advertising claims, whether intended or not.

Intellectual Property Concerns:

Using hashtags, heritage marks, social movements names or catch phrases can demonstrate brand relevance. Companies should navigate trademark and intellectual property issues carefully. Always verify rights and consider trademark searches before launching trend-focused campaigns. In addition, the use of generative artificial intelligence (“AI”) may expose the brand to significant intellectual property issues. Without clear policies, employees may reveal confidential intellectual property in input prompts to the AI platforms. In addition, the AI output may violate multiple laws around intellectual property, right of publicity, or brand transparency. These laws are in a state of flux at the federal and state level. To best protect the brand, include a trusted legal advisor at the concept stage.

Influencer Partnerships and Authenticity:

New social media platforms are emerging, and old ones have new policies. Consequently, consumer use patterns are in flux. Brands may be responding swiftly to adopt new influencer relationships on new or different platforms. Remember that social media laws mandate authenticity and transparency. In showcasing brand evolution with influencer partnerships or user testimonials, ensure proper disclosures and maintain documentation of genuine consumer experiences. The updated FTC Guidelines on Endorsements and Testimonials require evidence and dictate disclosure standards.

Consumer Privacy:

Data privacy laws are intensifying in their requirements on a state by state level. In 2025, eight new consumer privacy laws will go into effect, five in January. Any new advertising strategy will undoubtedly impact data privacy. Always consider how a new initiative dovetails with a brand’s data privacy policy. If using AI-driven consumer insights, here too, a brand must comply with data privacy statutes Compliance includes providing transparent disclosures about AI use, implementing proper consent mechanisms.

Philanthropy:

2025’s market headwinds are headlined with tragedies in New Orleans and California. Brands may be determining how they want to help. For brands making donations based on their customer behavior (e.g. “$1 of each purchase”, “round up your purchase”, “follow us and we will donate”), consider whether the campaign falls under commercial co-venture charitable donation or even professional fundraising laws. In addition, California has a brand new statute that requires substantial compliance obligations for online campaigns. Hawaii is expected to implement an even more complex statute next year.

Dark Patterns:

Regulators and class action lawyers continue to focus on dark patterns that obfuscate terms or fail to disclose terms clearly and conspicuously. Autorenewal and subscription offerings are ripe for regulatory focus. The FTC’s new Click to Cancel Rule, California’s new amendment (effective July 1, 2025), and other states require express affirmative consent to clear and conspicuous terms, simple cancellation methods, limited save efforts, and business recordkeeping mandates. Trial periods, free gifts, and upselling are other areas where dark patterns could trick the consumer. In addition, while FTC’s final December 2024 junk fee rule applies to live-event ticket sales and short-term lodging, state regulators and plaintiffs’ attorneys are still focused on price advertising. In particular California and Minnesota have broader statutes that mandate clear and conspicuous disclosure of all mandatory charges. The lesson here for brands is to audit proactively their programs’ terms and conditions and pricing disclosures. Remember that disclosures should generally be unavoidable to meet regulatory standards.

Conclusion:

As your brand adapts its advertising and marketing strategies to this year’s market headwinds, proactive planning can mitigate substantial legal risk. If you need assistance in confronting these market hardwoods and mitigating legal risk, contact Kyle-Beth Hilfer.