The Competition and Markets Authority (CMA) has been investigating for some time whether influencers clearly disclose paid-for endorsements, having obtained in 2019 voluntary undertakings from a number of social media celebrities. The ASA has also conducted through Ipsos MORI detailed research on the labelling of influencer marketing, and regularly issues decisions relating to posts that do not meet consumer protection disclosure requirements, the most recent being the first against a TikTok star.
In the light of this increased regulatory activity, the CMA's recent announcement that it has obtained undertakings from Facebook re Instagram indicates its continued focus on increased transparency and disclosure. In what it describes as "an important behavioural shift" for online platforms, the undertakings will impact on both influencers and brands.
In relation to Instagram users, anyone attempting to promote a business or product through the Instagram platform will be prompted, by Instagram's automated compliance program, to confirm that they have not received any form of incentive to publish their post. Where influencers have been paid or are in a commercial relationship, they will be unable to publish the post unless it meet disclosure requirements.
Instagram has pledged to automatically identify incorrectly labelled sponsored posts and notify the relevant brand of that post and the identity of the creator. It will also educate brands on its removal policies and promptly consider removal requests, and enable them to detect posts promoting them or their products.
What this means for brands
So, how will these undertakings impact businesses seeking to capitalise on the influencer marketing industry, forecast by Forbes to be upwards of $15 billion by 2022?
The aim of these undertakings (the provision of which is not a finding or admission of any breach of consumer protection laws) is to increase the ease with which business can comply with those laws. Businesses should note the strong words of the Chief Executive of the CMA that they now have no choice but to be "upfront and honest with their followers", and no excuse to "overlook how their brands are being advertised".
For further guidance, the Advertising Standards Authority and Committee of Advertising Practice offer detailed guidance on recognising ads: social media and influencer marketing.