The creator economy has hit a critical inflection point. The U.S. Federal Trade Commission (FTC) has firmed up its creator marketing guidelines, implementing steep $43,792 fines per non-compliant post. 

Behind this regulatory crackdown lies a troubling reality: a vast majority of influencers admit to lying or exaggerating claims in sponsored content, fundamentally undermining the essence that made creator marketing powerful in the first place.

“We’ve turned influencer marketing into a consumer trust crisis with no referee,” says Kaeya Majmundar, founder & CEO of SwayID, a compliance platform helping brands and creators navigate these new regulatory waters. Her insights come from years of observing the industry’s transformation from early collaborative partnerships to today’s complex brand relationships.

“When I first started co-creating products with celebrities and influencers in 2015, ‘creator’ wasn’t even a term,” Kaeya recalls. “The relationships were organic. Creators were happy to post whenever because it was their brands we were building together.” 

However, as the industry developed, natural collaborations transformed into scheduled, transactional relationships. This shift brought unexpected consequences: increased pressure for content output led to more exaggerated claims and inauthentic endorsements.

It is worth noting that the FTC’s regulations extend beyond government fines to cover private litigation. Similar to the surge in website accessibility lawsuits after regulations were established, the creator economy now faces legal risks from what Kaeya describes as “name and shame agents” – entities actively seeking non-compliant content to initiate lawsuits.

To address these mounting legal and trust challenges, SwayID acts as a “seatbelt” for influencer marketing and user-generated content (UGC). Through an automated compliance platform combining AI-powered content analysis and human expertise, the solution promises to help brands and creators maintain authenticity while meeting regulatory requirements.

Beyond Technical Solutions

SwayID tackles trust-building through various measures. “Our system works in two ways,” Kaeya explains. “We basically have a creator experience and a brand experience where we serve as the layer to make sure that both parties are playing their role in the easiest possible way to comply with each other’s requirements and build a trustworthy relationship.”

The first component centers on professional development, treating compliance like a professional certification. “We have tutorials and compliance certificates that creators must go through and learn,” Kaeya explains.

Technology serves as the second component through an AI-powered content analysis system providing immediate feedback. “Within seconds, you’ll get an initial analysis,” Kaeya explains. The platform uses an intuitive signal system: “Green zone, you’re fine; orange zone, fix some things; red zone, you got to change some things.” This real-time feedback helps creators and brands identify potential compliance issues before they become costly problems.

Additionally, human expertise proves crucial for managing complex situations and high-risk categories. “We have compliance specialists. It’s like having an attorney on deck,” Kaeya notes. She clarifies that most cases don’t require complete legal review: “The attorney is only for the 5% of really important things. But for the most part, you can have people at a paralegal level.”

“What makes this work,” Kaeya emphasizes, “is that we don’t interrupt the creative flow or process. We don’t manage relationships or campaigns.”

Market Response

The creator economy’s need for compliance solutions becomes clear in SwayID’s quick growth. “We had zero organic sales calls in September [2024],” Kaeya reveals. “By December, we got to over 100 a month.” This increase in demand prompted the company to manage its expansion carefully.

For agencies handling thousands of content pieces, SwayID’s impact on operations has been significant. “If you’re spending five hours a day checking content alone, that’s now reduced to five hours a week, if even that,” Kaeya notes. The efficiency improvements stem from both automation and the platform’s educational approach. “When we check the content, we don’t just say red light, green light, orange. We actually show you the reasons. So if you want to stay knowledgeable, you can.”

The company’s litigation support package, currently included at no cost for all clients, demonstrates its dedication to all-around compliance protection. “Right now, the litigation support package is free, but litigation support is essentially a specialist always just being assigned to your account and being on deck to be aware of what you’re doing – keeping tabs on your audit reports and keeping everything organized,” Kaeya explains. 

She notes that this service provides particular value for brands in high-risk categories, such as healthcare products or regulated industries, where compliance stakes reach their highest levels.

The platform’s adoption reveals distinct market segments. “There are two types of brands,” Kaeya observes. “One says, ‘I’m never going to get sued’ – that’s fine for the small and mid-market Shopify brands. The other of the ‘I’m always going to get sued’ mindset – that’s the Fortune 500, that’s the brands that customers really want to earn cash back on – they’re never going to allow anything that grossly steps over internal regulations.”

Cultural Shift and Path Forward

“I think creators don’t purposely ignore the rules,” Kaeya observes. “They have so many priorities. I mean, they’re just not going to do it if it’s not easily consumable.” 

This understanding shapes how the platform makes compliance accessible while respecting creators’ independence. “We don’t manage relationships, we don’t manage campaigns. If a creator and brand want to work together, they do it however they normally work. We don’t interrupt the creative flow or creative process.”

Kaeya quotes one of SwayID’s pilot partners, who leads an agency and creates content, saying: “Creator and influencer marketing is by default a team sport, whereas most standard ad formats are a solo sport. Using AI tools to detect and fix compliance issues can’t replace the need for creators to internalize and apply these rules.”

“We believe that 90% of the problem is solved if you’re sourcing your influencers from your customers,” Kaeya asserts. “The rates, alignment, and everything else changes when you do that. But for whatever reason, that’s just not part of the culture.”

She highlights that SwayID’s mission transcends business success: “Whether or not we win as a company is actually like, I would be honored, but that’s also an earned right. We have to execute with our team. But at the end of the day, somebody needs to [solve this] because the safety mechanism has to be in place.”

“Let’s prioritize these safety mechanisms for the greater good of the economy so that all of us can thrive.”