With the growing use of social media platforms and the evolution of a new kind of e-celeb, it is no surprise that brands are increasingly utilising the platforms of celebrities, vloggers, bloggers and other social media personalities ('Influencers') to reach their target audiences and boost sales. However, the previously unregulated space is now coming under close scrutiny. The Competition and Markets Authority ('CMA'), has recently published new guidelines to encourage greater transparency between Influencers, brands and their audiences.
As Influencer marketing becomes ever more prominent, the CMA is concerned that the public are being misled by Influencers failing to clearly disclose the relationship they have with brands because "without appropriate disclosure ... [followers] may think that an influencer has purchased the product themselves and therefore considers it good value for money or of good quality."
Consequently, the CMA has warned that misleading followers could result in enforcement action from the CMA, trading standards or other regulators. The sanctions the CMA may levy include substantial fines, banning of content, and civil and criminal liability. This is additional to the heavy reputational price that both Influencers and brands would suffer. It takes years for brands and Influencers to cultivate trust among consumers, but such negative publicity could erode followers' trust instantly.
To assist Influencers and brands to comply with the law, the CMA has published new guidelines. Along with guidance released by the Advertising Standard Authority ('ASA'), these illustrate that compliance is a key focus for the regulator.
Who needs to comply?
Individuals – all individuals who use their presence on social media platforms to promote, advertise or display products or services that they have received payment for.
Owners of social media accounts – any account with a following that promotes, advertises or displays products or services for which the account owner(s) has received payment, regardless of whether the account relates to an animal or cartoon character, etc.
Brands - brands and media agencies are accountable for Influencers' content. They must ensure that any Influencers they work with comply with the guidelines and consumer protection laws.
In fact, the CMA guidelines leave brands particularly exposed to potential liability. The ASA will only investigate and sanction Influencers and brands if they deem a post to be an 'advert', which has the following elements:
- payment – the Influencer received payment in some form; and
- control – the brand exerts a degree of control over the Influencer's content.
However, the CMA guidelines explicitly state that consumer protection legislation applies to any content where there has been a form of payment by the brand, irrespective of whether the brand had any control over the Influencer's content.
Consequently, a brand can be held jointly responsible for breaching consumer protection laws, without any participation in, or knowledge of, the incriminating content.
What is considered payment?
The guidelines clearly state that 'payment' is meant in the broadest sense. It does not simply mean cash consideration, but any form of reward, including monetary payment, gifts, services or products received at a greatly reduced price, for free or as a loan. Even if the Influencer didn't request an item, but received it from a brand for free with no commercial obligation to discuss the relevant product, this is still considered payment.
What do the guidelines say?
Influencers "need to make [an ad] obvious". This means that an Influencer must always:
- clearly state when they have been paid, given or loaned items – whether a follower is rapidly scrolling through their Instagram feed or taking the time to read a story or post, they must know that the Influencer received payment for the products, services or promotions as soon as they lay eyes on the content;
- be clear about their relationship (or previous relationship) with a brand – both past and present relationships must be brought to the public's attention. The CMA implies that even if the present post isn't marketing or promoting the brand, if the Influencer had a previous relationship with the brand or was gifted products in the past, they must make this past relationship clear in the present post. The CMA suggests that any relationship within the previous year should be disclosed; and
- be honest and not misleading – the Influencer should clearly explain how they received the product or services and be open and conversational with their audience.
How can you comply?
In a hectic life of photo shoots, press trips, meetings and mountains of emails, it may be easier for Influencers and brands to neglect the CMA's guidelines. However, brands and Influencers must be vigilant in following the guidelines, or face potentially severe penalties for breaking the law. Although the guidelines are not prescriptive and should be adapted for each social media platform, the following best practices are helpful considerations:
Use specific wording
- use identifier words such as #ad or #advert in the text of the content, or on the main image for a still picture or story if it is considered an advertisement under the ASA guidelines;
- use words such as 'gifted', 'loan' or 'partly paid with...' if the item was sent to you, but the brand does not exert any control;
- use the 'paid partnership' tool if using Instagram or Facebook; and
- use the brand's full name and clearly tag the brand in the content.
Make the wording clear
- if the identifier wording is in the caption, put it at the beginning so that it is easy for followers to spot; and
- if it is displayed on an image or video, make the words large, bold and easily visible.
Disclose all relationships
- if the content displays relationships with several brands (for example, where the Influencer's outfit comes from numerous brands, or their make-up routine consists of products from various beauty brands), make sure that all brands are listed clearly; and
- disclose past and present relationships.
Do Not :
- use ambiguous wording or unhelpful hashtags, such as #Spon, "made possible by ..." or "thank you to ...";
- bury the required wording in a sea of hashtags; or
- prioritise engagement levels over consumer protection.
- ensure that the company enters into a written contract with any Influencer with whom they have a relationship;
- include contractual provisions that impose prescriptive obligations on the Influencer to comply with all applicable laws, regulations and policies; and
- create or update any existing Influencer marketing policy to ensure consistency and compliance.
- provide training for Influencers and staff (in particular the marketing team) on how social media content can remain CMA compliant, and educate them on the legal implications of breaching the law.
- monitor the content of any Influencer with whom the company has a relationship; and
- consider an Influencer's previous history of compliance and examine their posts before committing to a relationship with them.+
Client Alert 2019-049
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.