Last year, the Global IP & Technology Law Blog covered the investigation by the Competition and Markets Authority (CMA) into commercially driven posts on social media, the results of which were published last week.

Following the investigation (which considered potential breaches of the Consumer Protection from Unfair Trading Regulations 2008), a number of prominent online influencers have provided the CMA with undertakings that they will ensure that their posts will make clear where they have received any payment or incentive to promote or endorse a particular product. The celebrities giving undertakings to ensure that their future social media postings are not misleading included Alexa Chung, Mario Falcone, Jim Chapman, Ellie Goulding, Rita Ora and Zoe Sugg (‘Zoella’).

The CMA has also published a short guide to compliance, aimed at influencers, setting out what they need to do to ensure their followers understand where the celebrity has received any payment or incentive to endorse the product.

This complements the advice which was jointly produced by the CMA and the Committee of Advertising Practice (CAP) in the Influencer’s Guide, which provides guidance on the advertising rules for parties who are involved in influencer marketing.

Be clear about relationships

From both the CMA’s summary and the Influencer’s Guide, it is obvious that social media posts must make clear where payment has been made in return for an endorsement, and payments can include commissions or incentives such as freebies, gifts, loans or trips.

In order to avoid misleading consumers as to the nature of a post, influencers should also ensure that posts make clear if they have had a previous commercial relationship with a brand that they are endorsing. The CMA suggests that any relevant brand relationship in the previous twelve months should be declared.

Be clear about advertising

Influencers’ posts may not appear to be adverts in the traditional sense of the word, but the huge recent increase in their use demonstrates their significance and effectiveness.  Social media posts promoting a product may be an advert by way of affiliate marketing – where content promotes products or services and contains a link or discount code that directs commission to the influencer, or advertorial content – where a brand pays an influencer and has a level of editorial control over their posts.

Editorial control will be obvious where a brand specifies what an influencer should post. However, the Influencer’s Guide explains that control may also exist in other situations, such as where a brand provides a ‘#phrase’ to include, or directs an influencer to post content at a particular time. Any and all types of advert must comply with the CAP code, and failure to do so risks potential sanctions by the Advertising Standards Authority (ASA).

Where a brand has no editorial control over content, but has made payment (in whatever form) it may be ‘sponsorship’, rather than an advert. Although such posts fall outside of the ASA’s authority, the CMA can use consumer protection law (a breach of which could lead to potentially serious sanctions) to pursue providers which it thinks are misleading, and so care should still be taken to be upfront and clear about that relationship.

Be clear about all promotions

Whilst the CAP Code requires adverts to be “obviously identifiable as such”, there are no legal requirements about how to do so.  Both guides are clear that simply tagging a brand or offering a discount code without additional explanation will not be enough to avoid misleading a consumer about the nature of the post or relationship with the brand. Hashtags such as #spon or #collab will also be problematic, as will hashtags that are not prominent (for example a simple ‘#ad’ at the bottom of a post, or within a group of other hashtags, is unlikely to meet requirements).

Clear, obvious placement of labels (such the ‘Paid Partnership’ labels available on Instagram) and hashtags must be included in each post, and must be apparent to consumers without the need to click through for more information, regardless of the type of device the content is viewed upon. The Influencer’s Guide offers some recommendations as to the placement of such labels.

Be clear about obligations

These guides should help influencers to more clearly identify, and their followers to recognise, ‘paid-for’ posts. The CMA has stated that further investigations will look at the role of the social media platforms, and so it is possible that further steps will be taken to ensure that commercial content is immediately recognisable.

Brands should therefore put in place provisions in their contracts with celebrities or influencers which protect them and ensure that the celebrity uses appropriate disclosures. Care must be taken with international campaigns because, for example, the disclosures required by the Federal Trade Commission in the US differ from those required by UK regulators.

As there are also some differences between the CMA’s guidance and the ASA rules, brands will need to take advice where they are considering a campaign which falls outside the ‘norm’ of clear editorial control or paid-for sponsorship.

Please contact Carlton Daniel for more information.