Retailer responsible for affiliate ad it had no knowledge of

Out-Law News | 24 Apr 2020 | 9:02 am | 3 min. read

A fashion retailer has been held responsible for an advert run in breach of UK advertising standards that it had no knowledge of, control over or input to, in a case that one copy clearance expert said highlighted the potential risks for businesses working with social media influencers.

The Advertising Standards Authority (ASA) ruled that ASOS was "jointly responsible" for an advert posted on Instagram by video blogger Zoe Sugg, which the watchdog said was not "obviously identifiable as a marketing communication". This meant the advert was in breach of the CAP Code – the UK's rulebook for print and online marketing.

Sugg is an ASOS affiliate and earns commission from the company when promoting ASOS products to her network of social media followers. Her Instagram story post in question showcased an ASOS dress and encouraged followers to 'swipe' the screens on their devices to shop for the product on the ASOS website. The message did contain additional wording, including the starring of the word '*affiliate', although the ASA said this was "obscured" by a messaging icon on the Instagram platform.

The ASA accepted that ASOS did not have any direct input or control over the Instagram post, while the company said it was not aware of the ad until it had been posted. However, the ASA said that "as the direct beneficiaries of the marketing material through an affiliate programme", ASOS "were jointly responsible for the ad and its compliance with the CAP Code".

Copy clearance expert Huw Cookson of Pinsent Masons, the law firm behind Out-Law, said the finding of joint responsibility was perhaps harsh on ASOS and that it "goes somewhat further than the previous guidance that the ASA has issued".

"What it shows is the ASA’s unwillingness to allow any blurring of the lines; the message is pretty clear that if there is an incentive to advertise the product – in this case a financial incentive, it’s likely to be deemed an ad and the brand behind it will be jointly responsible for it. This is something for retailers to bear in mind if they are looking at relationships with influencers, even when there is no obligation on the influencer to post," he said.

In explaining its reasons for finding a breach of the CAP Code in this case, the ASA said that "the commercial nature of the affiliate content should have been made clear on the ad itself", and not just in the additional wording alongside the Instagram story post.

While ASOS accepted that in this case the disclosure in Sugg's post labelling it as an affiliate post "was not sufficiently prominent", the company did say that the use of an 'affiliate' label should in principle be enough to satisfy the requirement for ads to be "obviously identifiable" under the CAP Code in other cases. However, while the ASA said decisions on the sufficiency of disclosures would be made on a case-by-case basis, it cast doubt on whether labelling an advert with the word 'affiliate' on its own will be enough to comply with the CAP Code.

In addressing the topic in its decision, the ASA referred to market research it had published the results of last year on the labelling of 'influencer' advertising, which both ASOS and Zoe Sugg's management had cited in defence of the vlogger's Instagram post.

The ASA said: "Only 38% of participants [to the survey] felt they would be able to confidently explain what the word 'affiliate' meant when displayed on social media, which put it amongst the terms that participants were least confident explaining. In no example where 'affiliate' was used in isolation did more than 45% of participants recognise it as an ad, and the low levels of recognition of ads in the research overall demonstrated the difficulties of obviously differentiating ads from other content on social media platforms. We considered that the term 'affiliate' was therefore unlikely to be sufficiently clear as a standalone label to ensure affiliate ads were obviously identifiable."

Cookson said the case shows that the ASA requires adverts to be unambiguous to consumers.

"Whilst the ASA did not explicitly say that Zoe Sugg's Instagram post should have used the indication 'ad’ , had she done so, it may have avoided an upheld ruling in this case," Cookson said. "This is the latest warning that advertisers should use the label ‘#ad’ and stray away from more ambiguous terms."