LEGAL RISKS IN THE MODERN CREATOR ECONOMY

INTRODUCTION

In recent years the creator economy has drastically changed regarding the nature of commerce, advertising and public influence within the digital economy. Online social media platforms have therefore created a space for individuals to generate their own income via sponsored content, affiliate marketing, and online branding leaving influencers to move from traditional content creators to commercial actors capable of shaping consumer behaviour on an international scale.

The monetisation of personal identity has, however, brought about various legal complexities as influencers often engage in advertising activities, intellectual property uses and public commentary without fully being aware of the legal consequences linked to such conduct. Although legal frameworks regulate businesses, advertisers and media organisations they still fail to tackle the unique challenges associated with digital creators who operate across various jurisdictions and platforms.

The rapid growth of influencer marketing has revealed considerable gaps in current legal frameworks which relate to intellectual property law, consumer protection, online defamation and digital accountability. It is very common for influencers to make it difficult to differentiate between personal expression and commercial communication, rendering it progressively more difficult to ascertain when legal obligations arise. Furthermore, the rate and accessibility of digital online content have raised disputes which relate to copyright infringement, misleading advertising, and reputational harm.

This article argues that the modern creator economy has grown faster than the current legal regulation creating extensive uncertainty with regards to the liability and accountability in digital commercial spaces. While South African legislation provides limited protection through intellectual property, consumer protection and cyber law frameworks, these frameworks are still insufficient to successfully regulate the transforming relationship between influencers, consumers, and digital platforms. This article examines the legal risks connected to the creator economy and it evaluates whether the current legal frameworks that are in place address these concerns. It further looks at potential reforms intended to strengthen regulation and accountability in digital commercial environments.

THE RISE OF THE CREATOR ECONOMY

(a) The Monetisation of Personal Branding

The creator economy can be defined as a digital ecosystem in which individuals monetise online content through sponsorships, advertising income, affiliate marketing and brand collaborations. As opposed to traditional business models in the industry, online creators generate commercial value which mainly comes from audience engagement and personal branding therefore social media has become a place where individuals can market themselves and by doing this, they can generate significant financial benefit. Influencers also operate as independent commercial entities rather than casual social media users because strategic branding, curated content as well as audience engagement allow content creators to build digital identities which can lure in sponsorships and long-term commercial partnerships. As a result, personal identity has become economically valuable in modern digital markets.

(b) Influencer Marketing as Digital Commerce

The expansion of influencer culture has transformed traditional advertising procedures because consumers often depend on influencers to recommend products and sometimes even services as they give reviews on whether the products or services are worth purchasing and this shows how much impact influencers have on the purchasing decisions of consumers. This type of advertising is often regarded as more authentic and trustworthy than traditional corporate marketing strategies as these tend to be misleading. For this reason, brands often collaborate with influencers to promote their products and services in ways that appear organic and relatable. However, we cannot ignore the fact that the commercial nature of influencer activity creates legal distress regarding transparency, accountability, and consumer protection. Many influencers conduct informal commercial activities without knowing the legal knowledge relating to advertising obligations, contractual liability and intellectual property rights. This lack of awareness often leads to legal disputes regarding misleading endorsements, unauthorised use of copyrighted material and online reputational harm.

III. INTELLECTUAL PROPERTY RISKS IN THE CREATOR ECONOMY

(a) Copyright Challenges

One of the most important legal risks to consider in the creator economy is intellectual property infringement because influencers often use music, images, videos and branded content when creating their content without obtaining proper authorisation. The norm of reposting and remixing content has led to widespread misunderstandings regarding ownership rights and permissible use.

In South Africa the primary legal pillar for digital branding is the Copyright Act 98 of 1978.[1] The Copyright Act protects original literary, artistic and audiovisual works from unauthorised reproduction and distribution. According to section 2(1) of the Copyright Act states that content must be original and reduced to material form to enjoy protection. However, in the digital space the criterion for originality is increasingly challenged because the unathorised use of copyright music on online platforms shows the tension between digital culture and intellectual property protection. While online platforms provide access to licensed audio libraries creators sometimes use copyrighted material outside of authorised platform agreements and such conduct exposes influencers to copyright infringement claims and financial liability.

Furthermore, the Copyright Act is currently under a serious debate via the Copyright Amendment Bill [B13B-2017].[2] The main point of the debate is the proposed shift from ‘Fair Dealing’ to a broader ‘Fair Use’ doctrine. Fair Dealing provides a closed list of exceptions but Fair Use on the other hand would allow courts to evaluate the ‘transformative’ nature of content on a case-by-case basis. The current Fair Dealing is therefore insufficient for creators whose brands are built on critique and mockery.

(b) Trademark and Brand Identity

Another legislation to consider is the Trade Marks Act 194 of 1993[3] because trademark infringement also presents an increasing concern in influencer marketing as content creators tend to use brand names, logos and products to improve their visibility and engagement. However, misleading associations between influencers and commercial entities may amount to trademark infringement. The issue becomes complicated in sponsorship arrangements which involve influencer-generated content because brands repost influencer content for commercial advertising without properly addressing ownership rights in contractual agreements therefore leading to disputes about licensing, commercial exploitation and moral rights.

(c) Artificial Intelligence and Digital Ownership

The link between artificial intelligence and content creation contributes to the uncertainty regarding authorship and originality. AI-generated captions, images and videos challenge traditional legal understandings of creativity and ownership. The current intellectual property legislation is still in-equipped to address the legal status of AI-generated work, and this increases uncertainty in digital creative industries.

The legal challenges in intellectual property in the creator economy show that the current frameworks find it difficult to adapt to the rapidly evolving digital procedures therefore there is a need for better regulatory clarity to balance innovation, creative freedom and legal protection.

(d) Digital Contractual Issues and the ‘Meaningful Consent’ Gap

A major risk for content creators lies within the ‘hierarchy of legal sources’ regarding platform interactions. The Electronic Communications and Transactions Act (ECTA) 25 of 2002[4] recognises the validity of electronic agreements under section 11. However, the reality of ‘click-wrap’ agreements which require the creator to ‘scroll and accept’ a bunch of words of legalese to gain access to a platform undermines the principle of meaning consent.

The agreements often provide platforms with broad and irrevocable licenses to use creator content. Although South African contract law respects the concept of pacta sunt servanda (agreements must be kept) principle, the ‘unconscionable conduct’ provisions in Section 40 of the Consumer Protection Act (CPA) 68 of 2008[5] offer a potential, though untested avenue for testing these one-sided terms. The imbalance in bargaining power between an individual creator and a global platform suggests that traditional contract law principles fail to provide sufficient protection for the creator’s intellectual assets.

(e) Comparative Perspective: The Paradigm Shift in Safe Harbours

The South African approach regarding intermediary liability which is primarily governed by the ECTA remains less structured compared to international models such as:

USA (DMCA): Operates on a ‘Notice and Takedown’ basis. Platforms are usually protected from copyright liability if they act as neutral agents and remove infringing content upon valid notice.[6]

EU (Directive 2019/790): Article 17 represents a paradigm shift because it moves away from the ‘Safe Harbour’ status for bigger platforms which requires them to make “best efforts” to obtain licenses for user-generated content and proactively prevent the upload of infringing content.[7]

India: The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, have increased platform accountability, requiring significant social media intermediaries to appoint local grievance officers and implement automated filtering tools.[8]

South Africa therefore does not incorporate these detailed procedural variations. The ECTA provides limited protection, but the absence of a formalised ‘Notice and Takedown’ procedure comparable to the DMCA leaves both creators and copyright holders in a state of procedural uncertainty

ADVERTISING, SPONSORSHIP AND CONSUMER PROTECTION

(a) The South African Regulatory Landscape

In South Africa, the CPA prohibits “false, misleading, or deceptive” representations in marketing (Section 41).[9] Within the creator economy, this is supported by the Advertising Regulatory Board (ARB) Social Media Guidelines.[10] These guidelines compel influencers to disclose any “material connection” to a brand using identifiers such as #Ad or #Sponsored. However, the ARB’s legal standing complicates enforcement. Given that the ARB is a self-regulating body their decisions are primarily binding on its members. In the case of Advertising Regulatory Board NPC v Bliss Brands (Pty) Ltd (2022) ZASCA 51,[11] the Supreme Court of Appeal held that while the ARB cannot issue orders against non-members, it can issue ‘Ad-Alerts’ to its members including broadcasters and major platforms to refuse the publication of certain advertisements. This ‘indirect enforcement’ creates an unstable situation for influencers who are not ARB members but find their content effectively ‘blacklisted’ from traditional media buy-ins.

(b) Critical Evaluation: “Effective” vs “Descriptive”

The enforcement in South Africa is ‘purely descriptive’. Although the ARB identifies the standard, they lack high-profile judicial precedents or financial penalties unlike the US Federal Trade Commission (FTC)[12] which implements these high-profile judicial precedents and financial penalties because under the FTC creators view the risk of non-compliance as negligible. The CPA provides fines of up to 10 per cent of annual turnover but these rarely apply to individual influencers.[13] If there is not a shift towards a more proactive monitoring and penalties, the South African framework remains a set of ‘best practices’ rather than a deterrent system.

DEFAMATION AND ONLINE HARM

(a) Delictual Liability and ‘Cancel Culture’

The South African law of defamation rooted in Actio Iniuriarum aims to balance the constitutional right to freedom of expression (Section 16)[14] with the right to dignity and reputation (Section 10).[15] In the creator economy, the trending nature of ‘cancel culture’ means that one post can cause irreparable damage to a brand’s reputation in seconds.

The primary challenge is applying the ‘reasonable person test’ in a digital context. Courts must establish how a ‘reasonable ordinary reader’ of a tweet on a digital platform would interpret the statement. This interpretation is generally complicated as it uses hashtags, emojis, and platform-specific slang.

In the case of H v W (2013) 2 SA 530 (GSJ),[16] the respondent posted defamatory allegations on Facebook with regards to the applicant’s behaviour, relationships, and lifestyle. The South Gauteng High Court applied the ‘reasonable person’ test and found that the post was indeed defamatory. The court then held that once a post is shared the original author remains liable for the ‘natural and foreseeable’ consequences of that post being shared.

The case is significant because it established that South African Courts have the power to employ mandatory interdicts such as takedown orders against individuals, but it also emphasised the practical difficulty of ‘unringing the bell’. Although the court can order the removal of a post it has limited control over third parties who have already seen the post.

REGULATORY CHALLENGES IN THE DIGITAL ECONOMY

(a) Gaps in Traditional Principles

A critical analysis shows that traditional legal principles fail to address the ‘triadic’ relationship between the creator, the brand, and the platform. As previously discussed, traditional contract law assumes that both parties have equal knowledge. However, the platforms algorithm generally determines the commercial success of the contract between a creator, and a brand therefore is an algorithm ‘shadow-bans’ a creator’s content they can be seen as being in breach of their sponsorship contract even though they have fulfilled all the requirements. South African currently offers no remedy for such ‘algorithmic interference’.

With regards to intermediate accountability the tension lies in whether platforms should remain a neutral ‘agent’ or if they should be identified as ‘publishers.’ The ‘notice and action’ framework under the ECTA that South Africa depends on is insufficient for the scale of modern online harm. The EU’s Digital Services Act (DSA) offers a middle ground by imposing ‘due diligence’ obligations on platforms which requires the to explain algorithmic decisions and provide internal compliant-handling systems.[17] The current legislation in South Africa lacks a comparable ‘Digital Services’ equivalent subjecting creators to automated platform determinations without recourse.  

VII. RECOMMENDATIONS FOR REFORM

(a) Enactment of a Digital Influencer Act

South Africa should codify the ARB’s social media guidelines into a formal statute. This would allow a regulatory body to have control over levy administrative fines for non-disclosure moving the control system from ‘self-regulatory’ to ‘statutory’.

(b) Statutory “Notice and Takedown” Procedures

The ECTA should be amended by including a uniform, judicial-light procedure for copyright and defamation takedowns. This would stop the need for expensive High Court interdicts for every situation relating to digital infringement.

(c) Algorithmic Transparency Mandates

Adopting EU’s DSA, South African law should require platforms to provide ‘plain language’ explanations of algorithmic transformations that materially have an impact on a creator’s ability to monetise their content. This would re-establish a degree of ‘meaningful consent’ to the platform-creator relationship.

VIII. CONCLUSION

The creator economy has essentially changed the framework of brand management and liability. This article has shown that while South Africa possesses a foundational legal framework, it is currently ill-equipped to handle the complexities of decentralised content creation. The critical evaluation of ‘click-wrap’ agreements and the comparative study of Article 17 of the EU Directive intimate that South African creators remain in a position of systematic vulnerability.

In answering the legal question, it is evident that existing frameworks are reactive. Although case law such as H v W shows judicial willingness to come in between digital disputes, the lack of proactive advertising enforcement and the stagnation of intellectual property reform create a climate of legal uncertainty The future of the creator economy therefore depends on a shift towards a clear, codified standard that balance the power of global platforms with the rights of individual creators. Finally, the effectiveness of the rule of law in the digital age will be assessed according to its ability to protect the intellectual property and dignity of the individual against the automated decisions of the machine.   

BIBLIOGRAPHY

Primary Sources

Cases

Advertising Regulatory Board NPC v. Bliss Brands (Pty) Ltd., (2022) ZASCA 51 (S. Afr.).

H v. W, (2013) 2 530 (GSJ) (S. Afr.).

Constitution

Afr. Const., 1996.

Legislation and Bills

Consumer Protection Act, 2008 (S. Afr.).

Copyright Act, 1978 (S. Afr.).

Copyright Amendment Bill, 2017, Bill No. B13B of 2017 (S. Afr.).

Defamation Act, 2013 (UK).

Digital Millennium Copyright Act, 17 U.S.C. (U.S.).

Electronic Communications and Transactions Act, 2002 (S. Afr.).

Trade Marks Act, 1993 (S. Afr.).

Rules and Regulations

Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (India).

Directive (EU) 2019/790 on Copyright in Digital Single Market.

Regulation (EU), 2022/2065 (Digital Services Act).

Guidelines and Reports

Advertising Regulatory Board, Social Media Guidelines (Issued in 2023) (S. Afr.).

Federal Trade Commission, Disclosures 101 for Social Media Influencers (Issued in 2019) (U.S.).

Record of Law, A Practical Guide for International Interns: How to Conduct Legal Research & Write a Legal Article (Issued in 2026).  

[1] Copyright Act, 1978, §2(1) (S. Afr.).

[2] Copyright Amendment Bill, 2017, Bill No. B13B of 2017 (S. Afr.).

[3] Trade Marks Act, 1993 (S. Afr.).

[4] Electronic Communications and Transactions Act, 2002, § 11 (S. Afr.).

[5] Consumer Protection Act, 2008, § 40 (S. Afr.).

[6] 17 U.S.C. § 512.

[7] Regulation (EU) 2022/2065, 2022 O.J. (L277) 1.

[8] Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, Rule 4 (India).

[9] CPA, § 41. 

[10] Advertising Regulatory Board, Social Media Guidelines (Issued in 2023) (S. Afr.).

[11] Advertising Regulatory Board NPC v. Bliss Brands (Pty) Ltd., (2022) ZASCA 51, (S. Afr.).

[12] Federal Trade Commission, Disclosures 101 for Social Media Influencers (Issued in 2019) (U.S.).

[13] CPA, 2008.

[14] S. Afr. Const. art. 16.

[15] S. Afr. Const. art. 10.

[16] H v. W, (2013) 2 SA 530 (GSJ) (S. Afr.).

[17] Regulation (EU) 2022/2065, 2022 O.J. (L277) 1.