Out-Law Analysis | 01 Apr 2020 | 9:41 am | 2 min. read
The Advertising Standards Authority (ASA) and the Competition and Markets Authority (CMA) have issued joint guidance for brands and influencers on the relevant disclosure necessary in social media posts to ensure that those ‘adverts’ are not misleading.
The guidance (19 page / 2MB PDF) is aimed at providing clarity for brands and influencers engaging in this form of advertisement. It also seeks to summarise the relevant elements of UK advertising rules and consumer protection law, namely the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing, and the Consumer Protection from Unfair Trading Regulations 2008 (CPUT).
When a brand gives an influencer a payment, including any form of monetary payment; commission; a free loan of a product or service; a free product or service or any other incentive, any social media posts promoting or endorsing the brand or its products and services is subject to advertising rules and consumer protection law.
Affiliate advertising, when content promotes particular products or services and contains a hyperlink or discount code which means the poster gets paid for every ‘click-through’ or sale, will likewise be subject to the same requirements.
Consumer protection legislation applying to influencer marketing is enforced by the CMA and Trading Standards. CPUT makes ‘unfair commercial practices’ unlawful and this would include using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear.
Other unlawful practices include falsely claiming or giving the impression that an individual is acting outside of their business purposes; falsely representing themselves as a consumer; failing to identify a commercial intent behind a social media post; and omitting or hiding ‘material’ information, e.g. that the person posting is an ambassador for a product.
In order to prevent adverts being deemed misleading, it should be made plain to the consumer that the influencer is being paid to market the product or service and that the post itself is an advertisement. Where the brand has editorial control over those posts – by telling the owner of the social media account what to say or when to post, for example – it must be made clear that the post is an advertisement.
Failure to do so could result in action being taken by the ASA, including banning the advert. Similarly, the CMA and Trading Standards may take enforcement action, including a prosecution, where the advertisements breach CPUT.
It is therefore important that brands contracting with influencers make clear what they must do when advertising products on their behalf and that disciplinary or punitive action may be taken where the influencer has failed to follow company rules. Brands are advised to distil the new guidance into policies that influencers must sign up to.
It might also be worth considering non-payment for non-compliant adverts, given the financial and reputational damage that can result from offending adverts.
The ASA and CMA guidance advises that posts should include labels that make it clear to consumers that they are an advert, for example ‘advert’, ‘advertising’ or ‘advertisement feature’. This should be very clear and not concealed by other hashtags.
Other labels, such as 'in association with', 'thanks to', 'gifted' or 'spon' are less likely to be legal, decent, honest and truthful. If an endorsement is not clear, the post risks breaking the law.
Simon Tingle is a regulatory law expert at Pinsent Masons, the law firm behind Out-Law
23 Jan 2019
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