Sixteen social media stars – including celebrities such as Alexa Chung, Ellie Goulding, Rosie Huntington-Whitely and Rita Ora – have provided voluntary undertakings to the Competition and Markets Authority (CMA) to improve disclosure in their social media posts, following a CMA investigation into whether influencers are clearly disclosing paid-for endorsements. They have undertaken to make it clear when they have been paid or otherwise incentivised to endorse a product or service and generally ensure that the "likes" they get on social media, are for products they actually like.
The undertakings (the full text is available here) have been provided under Section 219 of the Enterprise Act 2002 relating to the Consumer Protection from Unfair Trading Regulations 2008, but it is important to note that there is no finding by the CMA that there have been any breaches of consumer law. The celebrities have agreed that:
1. Each post made by them, or on their behalf, which promotes, endorses or reviews a product will identify in a clear manner if:
(a) The post is one for which they have received or been promised payment from the relevant brand or business;
(b) They have, within the past year before the date of the publication of the post, received or been promised any payment from the relevant brand or business.
2. Each post made by them, or on their behalf, which promotes, endorses or reviews a product, and for which they have received or been promised payment from the relevant brand or business, will not:
(a) Falsely claim or create the impression that they are acting for purposes outside their trade, business, craft or profession or represent themselves as a consumer.
(b) Claim that use of the product can achieve particular results in circumstances where they have not personally used the product and achieved those particular results.
The undertakings are just one part of the picture in relation to the CMA's investigation into social media influencing, as we reported in July 2018. Last year the CMA asked for public commentary on the investigation and examples of social media posts they considered misleading. The CMA is also now considering the role that social media platforms may play.
Earlier last year, a CMA questionnaire found that social media endorsements influence buying decisions, with people often looking to social media channels for opinions and reviews on products and services before making a purchase. However, the public need to know when an influencer has been paid, incentivised or in any way rewarded to endorse, promote, or review a product or service, including whether a product or service was given or loaned to them for free.
News of the undertakings coincides with the widespread media coverage of influencers being burned by their association with Fyre Festival, which was scheduled to take place in the Bahamas in Spring 2017. A number of celebrities and influencers, including Kendall Jenner and Emily Ratajowski promoted the festival on Instagram, but were later reported to have been paid to make the posts, something they were required under US federal law to disclose. The Federal Trade Commission said the use of the hashtag "#ad" only worked if it appeared at the beginning of paid posts, and that using "#ad" alone was not a sufficient disclaimer. Ratajowski was reportedly the only one to use "#ad" (although she has since deleted the post).
The CMA has published a quick guide for social media influencers around transparency and honesty, and staying on the right side of consumer law, which will sit alongside the guidance jointly published with the Committee of Advertising Practice (CAP) in September last year. This is, of course, not just an issue for the influencers themselves. Brands, marketing agents, intermediaries and all involved in the supply chain will find this guidance instructive.
To avoid breaching consumer protection law, celebrities, who have received payments, services or gifts in exchange for posting on social media, should clearly inform viewers that this is the case. This should be done in a way that is 'transparent, easy to understand, unambiguous, timely and prominent' and in a way that does not require viewers to click for more information. The CMA have specifically advised that practices such as tagging brands without additional disclosure, using phrases such as 'thank you', 'in collaboration with' or 'thanks to', using ambiguous hashtags such as #spon, #client, #collab, or placing hashtags which are intended to disclose the advertisement at the bottom of a post may not be sufficient to comply with legal requirements.