Out-Law News | 14 Dec 2010 | 3:00 pm | 1 min. read
The company operates a network of sites purporting to offer editorial coverage of fashion, beauty, music and lifestyle subjects. The OFT said, though, that it investigated the network on suspicion that the coverage was not independent but was the result of payment to it.
"The OFT was concerned that individuals engaged by Handpicked Media were publishing online content which promoted the activities of Handpicked Media's clients, without sufficient disclosures in place to make it clearly identifiable to consumers that the promotions had been paid for," said an OFT statement. "This included publication on website blogs and microblogs (for example Twitter)."
The Consumer Protection from Unfair Trading Regulations (CPRs) protect consumers from unfair commercial practices which would lead them to take a purchasing decision that they would otherwise not have taken.
Handpicked Media has signed undertakings agreeing to identify clearly when coverage is connected to payments from its clients. The OFT said that the investigation and undertakings set a precedent.
"In taking this enforcement action the OFT has confirmed its view that online advertising and marketing practices that do not disclose they include paid-for promotions are deceptive under fair trading laws," said an OFT statement. "This includes comments about services and products on website blogs and microblogs such as Twitter."
"Online promotional activity, just like any other promotional activity, must clearly identify when promotions and editorial comment have been paid for, so that consumers are not misled," it said.
Heather Clayton, senior director of the OFT's consumer group, said that the body would be taking "targeted action" against companies that are not clear about the commercial background to blogs.
"The integrity of information published online is crucial so that people can make informed decisions on how to spend their money," she said. "We expect online advertising and marketing campaigns to be transparent so consumers can clearly tell when blogs, posts and microblogs have been published in return for payment or payment in kind. We expect this to include promotions for products and services as well as editorial content."
The OFT said that the undertakings agreed by Handpicked Media prevent it repeating the behaviour that led to the investigation.
"Through the signed undertakings, [Handpicked Media] has agreed not to engage in promotional activity unless bloggers within its network prominently disclose, in a manner unavoidable to the average consumer, that the promotion has been paid for or otherwise remunerated," the OFT statement said.