The Competition and Markets Authority (“CMA”) has recently published guidance for social media influencers to ensure that they are being transparent with their followers when endorsing products, brands or services. The guidance comes after a CMA investigation in 2018 into whether consumers are being misled by celebrities who do not make clear that they have been paid or rewarded to endorse something.
One of the practices banned under The Consumer Protection from Unfair Trading Regulations 2008 is the use of “editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial).”
Failure to comply with UK consumer protection laws can lead to enforcement action by the CMA or local authority Trading Standards services. It may also breach industry-specific rules on advertising.
The new CMA guidance states that influencers must make clear to their followers if they have been paid, incentivised or rewarded in any way to endorse or review something online. For this purpose, “payment” includes money, gifts of services or products (“freebies”) or the loan of a product.
Influencers must not only be transparent about the products and/or services that they are endorsing, but also about the relationship they have (or have had, within the last year) with a brand or business. Given their high public exposure, you will often see influencers offering competitions, giveaways, competitions or referencing their own range of products. These acts alone, are not enough to make clear the influencer’s relationship with the brand. Instead, they must be made clear that the post is a promotion.
The whole purpose of the guidance is to ensure that influencers are not misleading the public. Unless an influencer has made appropriate disclosure, for example, it is unclear whether the influencers have purchased the goods or services with their own money, whether they have actually used the goods or services and whether they consider it good value for money.
The law is not prescriptive about how influencers are transparent with their followers about the products they endorse and their relationship with brands, although the CMA does suggest using various signposting, such as “Advertisement Promotion”, “#AD” or “Paid Partnership”.
The CMA has been working closely with the Advertising Standards Authority, the UK’s independent regulator of advertising, which has issued warnings to several celebrities it found had broken its rules. In response to these warnings and as a result of the action taken by the CMA, a group of 16 celebrities, including Ellie Goulding, Rita Ora and Rosie Huntington-Whiteley, have formally committed to “clean up their act on social media” by clearing signposting whether they have been paid, or received any gifts, loans of benefits for any product which they endorse.