The Importance of a “No Compete” clause in influencer marketing contracts

Vincenzo Iaia

Over the past few years, influencer marketing has become an increasingly popular strategy in companies’ commercial communication. This market is expected to generate around 20 billion euros in revenue by 2023. Influencer marketing involves the collaboration between a company and an individual with a significant number of followers, known as an “influencer”, to leverage his/her influence on consumers’ purchasing decisions.

Although this practice may seem innovative, it is not entirely new. The association of a famous person’s image with a brand has been used in advertising campaigns for many years. For example, let us think of the exploitation of Alessandro Del Piero’s image for Uliveto or that of Antonio Banderas for Mulino Bianco.

The influencer marketing contract falls under the taxonomy of sponsorship contracts. This is an atypical contract, the binding nature of which is conditional on the pursuit of interests deserving of protection, as established by Art. 1322 of the Italian Civil Code. With the exception of agent intermediation, the common structure features a bilateral relationship where an individual (sponsee) agrees to use their image to amplify sales of products/services of a specific company, usually the contracting party (sponsor), in exchange for compensation.

In the context of influencer marketing, the influencer’s obligations differ somewhat from traditional sponsorship contracts due to changes in reaching potential consumers. Instead of billboards and TV commercials, influencers use posts, stories, reels, and various other digital content, which require detailed regulation to prevent interference with competitors.

One recurring clause in sponsorship contracts is exclusivity or non-compete. Depending on the addressee of the obligation, the clause can take two directions:

1. Directed at the influencer when it governs the chance to promote competing products and/or services. 2. Directed at the sponsor when it regulates whether it can hire multiple influencers for the promotion of the product/service.

In the first case, which is the most frequent, the influencer’s obligation to create and disseminate promotional content is coupled with a non-competition obligation, preventing them from promoting products/services that are in direct competition with the sponsor’s offerings. This clause aims to maintain the consistency of the commercial strategy. Indeed, if the same person shows support for competing products or services simultaneously this would weaken the persuasive power of the message.

Applying this logic to influencer marketing agreements, it is reasonable to include a contractual prohibition enjoining influencers from publishing content promoting products offered by rival companies. For instance, if an influencer were to endorse the qualities of clothing in a story where some suitcases or other products from competing fashion houses are visibly present, it could compromise the persuasive message. This may lead consumers to unconsciously consider purchasing rival products.

On the other hand, it may be in the influencer’s interest to be the exclusive promoter of a particular product or service. Some VIPs might hesitate to share a promotional campaign with other artists or less popular persons. For example, Sarah Jessica Parker may want to be the sole spokesperson for Fendi’s “Baguette” handbag, leaving no space for her colleague Kim Cattrall, with whom she reportedly has a strained relationship despite their enviable friendship in “Sex And The City”.

Moreover, Article 129 IPC stipulated that if products displayed at official trade shows are suspected of infringing IP rights, law enforcement authorities cannot immediately seize the products, but merely draw up a description of them. The approved amendments repeal article 129(3), allowing enforcement authorities to immediately seize the goods under a court order grounded on the suspicion of an infringement of IP rights.

To prevent potential competitive tensions in influencer marketing agreements, it is advisable to address these concerns during contract negotiation. While parties have the freedom to shape the non-compete obligation based on their specific needs, Art. 2596 of the Italian Civil Code sets some boundaries to private autonomy. The validity of the non-compete clause is subject to the identification of a specific geographical and product area, and the prohibition cannot exceed five years. Additionally, the non-compete agreement must be in writing.

Consequently, when imposing this kind of obligation on the influencer, the following clause can be considered: “Due to the exclusivity granted to the Company by the Artist, the latter cannot, for the duration of this Contract, enter into agreements (or perform previously concluded ones) aimed at promoting and endorsing products and services that are similar, comparable, or in competition with those of the Company and its Brands”.

Likewise, if the sponsor bears the exclusivity burden, the following wording can be adopted: “Due to the exclusivity granted to the Artist by the Company, the latter cannot, for the duration of this Contract, enter into agreements (or perform previously concluded ones) aimed at promoting and endorsing Product/Service X with other parties, unless prior authorization is obtained from the Artist”.


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