Nearly every small business feels the effects of the current political climate. The recent shift toward deregulation has gutted the power of federal agencies, putting millions of consumers at risk. In light of these policy changes, the Independent Beauty Association (IBA) addressed the evolving landscape of advertising law at its Cosmetics Convergence Spring 2025 Conference. In an effort to help guide indie beauty brands through these changes, the IBA hosted a virtual panel with Mary Engle, Executive Vice President of Policy at Better Business Bureau (BBB) National Programs and Jennifer Santos, attorney at BBB National Programs, National Advertising Division (NAD), to help indie beauty brands navigate the murky waters of advertising in an era of deregulation.
Engle set the stage for the fireside chat by reminding attendees that just because they might see fewer regulatory initiatives coming out of the federal government doesn’t mean there’s going to be less enforcement. Andrew Ferguson, the Chairman of the Federal Trade Commission (FTC) since January 2025, has said he's committed to enforcing the laws that Congress has passed.
The federal government isn’t the only watchdog entity: consumer advocacy organizations and consumer class action lawsuits both play vital roles in protecting consumers and holding businesses accountable for harmful practices. Should federal oversight decrease, states might become more active in enforcing and creating their own regulations.
“In a time of deregulation, you still want to be one of the good players, and this is when self-regulation comes into play,” said Santos. “The NAD wants to hold businesses to a level playing field so consumers can trust the advertising that’s out there, now more than ever.”
Made in the USA Claims
Tariffs are the talk of the town, but what is less commonly talked about is the connection between tariffs and advertising law, specifically as it relates to "Made in the USA" claims. Many beauty brands are shifting towards nearshoring manufacturing and pivoting supply chains to avoid paying costly tariff hikes, which raises the question of changing the country of origin claim on a product label to indicate that a product is made in America. These types of claims are regulated by the FTC, and it’s a stringent standard to meet: all or virtually all of the product's ingredients or components must be made and sourced in the United States.
The FTC's Made in USA labeling rule applies to product labels and mail-order materials, including those on products where customers can't see the label. For advertising claims, the FTC has a Made in USA enforcement policy, and the standard for determining US origin is consistent across both the rule and the policy.
According to Engle, the FTC will look at the cost of the goods and the functionality that comes from abroad to determine whether it meets the Made in the USA standard. She gave the example of a watch that’s made in the US, but the movement comes from a piece that’s made in Switzerland. Because that integral part of the watch comes from abroad, the Made in the USA claims do not apply. The Bigelow Tea Company was recently found liable in a jury trial regarding Made in USA claims. Despite the tea bags and strings being domestically sourced, the tea itself originated abroad. This resulted in the company paying over a million dollars in damages.
“The standards are very high, so if a company is thinking about making that claim, they definitely need to be familiar with the standards that the FTC applies,” said Engle.
Santos advised brands to be wary of implied Made in the USA claims. She referenced a recent dispute where SC Johnson challenged Native, a P&G-owned personal care brand, over its labeling. Native changed its labels from "Crafted in the USA" to "Born in the USA" following the challenge, which the NAD found conveyed the same message as “Made in the USA.” The claim couldn’t be substantiated, which led the NAD to ask Native to remove it from its labeling.
“The lesson here is to make sure you have the evidence to support Made in USA at the time that you make the claim,” said Santos. “Keep very rigorous records on your ingredients. Talk to your suppliers. Where are your ingredients coming from, and where are you processing your products?”
Advertising to Tweens and Teens
Online safety and privacy are definitely a hot topic right now, specifically as it relates to targeted marketing. One of the main issues is whether a company is intentionally targeting that age group in their marketing material, and whether that's part of the brand’s marketing plan.
Online safety and privacy, especially concerning targeted marketing, are a hot topic right now among federal and state legislators. A key point of contention is whether companies deliberately target specific age groups in their marketing and if this is an intentional component of the brand's overall marketing strategy.
The BBB has a dedicated unit for reviewing advertising aimed at children under 13. This unit considers several elements to determine if advertising targets this demographic, including the ad's visual presentation (look and feel, colors, fonts), the use of celebrities appealing to children, and the placement and audience demographics of where the ads appear. The BBB’s assessment considers not only the advertiser's intent but also whether a significant portion of the actual audience falls within the under-13 age group.
The NAD is closely monitoring the "Sephora kids" trend and has identified three primary areas of concern: whether the advertisers are truthfully advertising their beauty products to teens and tweens, whether they're targeting teens with ads for unnecessary products or products that could be potentially harmful to teens and tweens, and whether beauty brands are using peer pressure-type tactics to get tweens and teens to feel they need to have these products in order to fit in and feel good about themselves.
All of that being said, Santos said that beauty brands can certainly advertise to teens and tweens.
“I understand that garnering loyalty to a brand at a young age is attractive to beauty brands, but beauty brands need to be careful about how they’re advertising to this vulnerable audience,” said Santos. “Brands need to be truthful and transparent in their ads and advertise responsibly to ensure that teens and tweens are getting quality information and that they're being marketed safe products.”
Drunk Elephant tested the limits of this guidance in 2024 when the brand publicly declared 18 of its products as suitable for children and teenagers. The NAD subsequently determined that these safety claims were substantiated—a clear win for both Drunk Elephant and consumers. However, the NAD also found that two TikTok videos featuring influencers reviewing Drunk Elephant’s B-Goldi Bright Drops lacked adequate disclosure of the material connection between the brand and the influencers. As a result, the NAD advised Drunk Elephant to ask the influencers to revise their posts to include the necessary disclosures.
A similar situation occurred with Bubble Beauty: the NAD found that the brand’s safety claims for children under the age of 13 were also substantiated, but its efficacy claims were not. The NAD and Children’s Advertising Review Unit (CARU) recommended Bubble discontinue express and implied claims that Bubble cleansers and moisturizers are effective on children under 13 years of age.
“Bubble Beauty was commenting on and interacting with social posts featuring influencers under the age of 10,” said Santos. “We found that the message conveyed there was that the products are safe and effective for young children. The safety claims were supported, but the efficacy claims were not.”
Influencer Disclosures
Social media is vital to the beauty industry, which is why advertising compliance should also be top of mind for beauty brands that regularly work with beauty influencers. In 2025, the NAD addressed roughly ten cases concerning influencer marketing practices. That same year, the organization also initiated several monitoring inquiries in this area with both brands and individual influencers.
“FTC guidance has indicated that not only is the brand responsible for influencer advertising, but the individual influencers are as well,” said Engle. “If there is a material connection between a brand and an influencer, that material connection needs to be clearly and conspicuously disclosed to the viewer.”
“If it's in a caption on Instagram, it has to be what we call ‘above the fold,’ meaning you can't require the consumer to click to see more in order to see the disclosure,” added Santos. “If the customer has to take any action to see the disclosure, it's not considered clear and conspicuous.”
From the NAD’s perspective, consumers have a right to understand when they are viewing advertising versus when they're reviewing a true consumer review that isn't being paid for. Additionally, advertising law requires substantiation of claims. If an influencer makes claims about a product's performance, such as a facial cleanser clearing acne, and that claim isn't supported, both the advertiser and the influencer could be liable for deceptive advertising. For brands, it’s crucial to provide influencers with guidelines on acceptable claims.
Santos also clarified that a material connection, which triggers responsibility for advertising claims, doesn't require direct payment. It can include free samples or other forms of compensation. If such a connection exists, what influencers say becomes part of a brand’s marketing and implicates both parties.
The FTC has a new rule as of 2024 that prohibits fake or misrepresented consumer, celebrity, and insider reviews, including those generated by AI or without actual product experience. Businesses cannot create, sell, buy, or disseminate such reviews if they knew or should have known they were false. Offering incentives for specific positive or negative reviews is also prohibited. Insider reviews lacking clear disclosure of material connections are banned, especially from officers or managers. Company-controlled websites misrepresenting independent reviews and suppression of negative reviews through threats or misrepresentation of posted reviews are also unlawful. Finally, selling or buying fake social media indicators to misrepresent influence for commercial purposes is prohibited when the buyer knows or should have known they are fake.
The FTC can impose civil penalties of up to $51,744 per violation for businesses that knowingly violate the rule. Santos brought up the 2018 investigation of Sunday Riley as an example, where managers reportedly asked interns to create fake Sephora accounts to review their skincare products. If that conduct occurred today, it would be subject to these civil penalties. However, this rule was not in effect at the time of the Sunday Riley investigation.
“Even though that rule was issued under the Biden administration, it appears that the current administration is going to be enforcing it,” added Santos.
Advertising Law in 2025
In today’s era of deregulation, a recurring and significant theme emerged throughout this discussion: the role of industry self-regulation. Even as governmental oversight and regulatory activities slow, the beauty industry must rise to the occasion and take on a greater responsibility for maintaining ethical standards, truthfulness, and fair practices in its advertising, which remains necessary to safeguard the public interest. Looking ahead, the BBB and NAD are proactively considering the implications of AI and emerging technologies in advertising.
“To ensure a level playing field and prevent a race to the bottom, clear guidelines and regulations are necessary for all companies to understand their obligations,” said Santos. “Unsupported or misleading AI claims that create an unfair competitive edge highlight the need for clear AI guidelines to ensure fair play.”
To purchase on-demand access to this session recording from the 2025 Cosmetics Convergence, please contact the IBA at info@independentbeauty.org.
