CMA Investigation into Social Media Advertising

The Competition and Markets Authority (CMA) launched an investigation in August 2018 into concerns that celebrities and social media stars do not properly declare when they have been paid or rewarded to endorse goods or services. As consumers place lots of trust in those that they admire, the CMA wishes to make sure that fans and followers are not misled by social media stars into believing that the influencer bought the product or services themselves when in fact they have been paid or thanked in some way by the brand.

Where influencers are paid to promote a product on social media, they must make this clear. The Consumer Protection from Unfair Trading Regulations 2008 (CPR) bans the practice of using editorial content in the media to promote a product where a trader has been paid for the promotion without making that clear in the content or by images or sounds clearly identifiable to the consumer. The CMA can enforce this legislation through the courts.

The CMA in its recent investigation particularly focused on posts which appear to:

• Promote or endorse a product without clearly stating if the post has been paid for, or
• Offer the influencer’s “personal opinion” on a product without clearly disclosing that they are being paid by the brand behind the product.

New Guidelines

The Committees of Advertising Practice (CAP), collaborating with the CMA, last week issued ‘The Influencer’s Guide’ (the Guide) to help influencers and brands stay on the right side of the rules on social media advertising. The Guide covers not only the CPR but also the CAP Code.

The guidelines particularly highlight:

What counts as payment (and is therefore covered by consumer protection rules)?

Notably here, the Guide confirms that any form of payment by the brand to the influencer will attract the protection of the consumer protection law. This includes any commercial relationship with the brand or if the brand provides the influencer with, for example, free products, gifts, trips, or tickets.

How clear must the influencer be that they have been paid to endorse a product?

The Guide states that the CMA expends brands, influencers and media agencies to have made sure that the content is clearly identified as ‘paid-for’. Included in the Guide are certain examples which will be acceptable to the CAP, and examples where the labelling is unlikely to be sufficiently clear.

Likely to be acceptable here are prominent labels such as:

• “Advertisement Feature”
• “Advertisement Promotion”
• “Advertisement” or “Advertising”

Other types of label should be avoided as the CMA may not consider them clear enough:

• “Sponsorship” or “Sponsored Content”
• “#Spon”
• “In association with”
• “Thanks to [Brand] for making this possible”
• Simply mentioning @[Brand] in the post

Conclusion

The new Influencer’s Guide offers helpful advice to influencers and brands including examples of how they can stay on the right side of consumer protection law. Social media advertising agency Markerly recently conducted research which suggested that for celebrities and influencers with over 100,000 followers, the average likes on a post labelled as paid-for was in fact significantly higher than posts not labelled as paid-for.
Therefore, by keeping to the guidelines and being sure to clearly label posts, brands and social media influencers can continue to exploit the wide platform that social media provides to reach their target audience.

For more information please contact Jonathan Hyman on +44 (0)20 7438 2201 or at Jonathan.Hyman@crsblaw.com.