Breakthrough in CMA investigation into social media influencer transparency

The CMA has reached an agreement with 16 celebrities following its investigation into social media influencers' failure to properly label their endorsements.

In August 2018, the Competition & Markets Authority ("CMA") launched an investigation into the activities of social media influencers, focusing on their failure to correctly label their posts.

The use of influencers helps brands to reach wider audiences, to target groups who are not as perceptive to traditional forms of advertising and to generate additional sales of their products and services.

Generally, influencers have large followings and their social media activity can influence the buying decision of their followers. Followers are watching what these influencers are wearing, eating and doing. Where they are travelling to, which live events and festivals they are going to, what cars they are driving and so much more. Therefore, brands are naturally engaging influencers to represent, promote, test and talk about their products and services.

However, it is not always clear to a follower if the influencer is just sharing an insight into their lives or if they are advertising a product or service. Without the right labelling, followers are unaware that they are viewing advertising. They do not know that the influencer has been paid or rewarded in some way to promote a particular brand.

Followers admire the influencers that they have chosen to follow and this admiration can lead to wanting to do, buy and wear the same things as those influencers. Therefore, lack of labelling on social media post can have an impact on a follower's buying decision. If a follower believes that the post is the influencer's genuine opinion (with no commercial connection to the brand) they might be more inclined to purchase the product or service, than if they were aware that the influencer had been paid or rewarded to endorse the product or service.

Therefore, it is essential that this distinction is made clear in posts and that followers know when they are being advertised to.

This principal is core to the CMA's investigation and some 5 months on, in a breakthrough for influencer advertising transparency, the CMA has reached agreement with 16 prominent celebrities to ensure it is clear in their social media posts whether they have been paid or incentivised to promote a particular product.

The CMA has also published a brief guide for social media influencers, marketing companies, agents and brands to aid compliance. The key points to note are:

• It must be made clear if an influencer has been paid or otherwise incentivised to endorse a product.
• Influencers should be transparent about the relationship with the brand or business and clearly state if the post is a promotion. This extends to past relationships and the CMA expects anything within the last year to be relevant to followers.
• Posts must not be misleading. Influencers must disclose appropriately to ensure consumers are clear on whether influencers have an existing relationship with the brand they are promoting. In particular, influencers should avoid saying they have used a service or product if they haven't.
• Compliance can be achieved in a number of ways, such as clearly referencing ‘Advertisement Feature’ or ‘Advertisement Promotion’, #Ad, #Advert, and using the ‘Paid Partnership’ tool on Instagram. The CMA has listed a number of practices which will not be considered compliant. These include using ambiguous hashtags like ‘in collaboration with’ and using discount codes in a post without additional disclosure.
• Where a product promotion has been incentivised, disclosure must be transparent, prominent, unambiguous and apparent without followers needing to click on further links.

The CMA has sent warning letters to other influencers, and further influencer commitments may follow. Whilst the CMA has, at the moment, not made a finding on whether the influencers' practices have breached consumer law, enforcement action may be considered down the line for repeat offenders. Therefore, it is important that influencers and brands are clear on the advertising standards expected by the CMA and the ASA.

You can read the CMA's guidance here. Please also click here for our previous blog on CAP's advertising guidance for influencers published in September 2018.

For more information on this topic, please contact Sonal Patel Oliva, David Bond or your usual contact within Fieldfisher's Brand Development Team.

Co-authored by Dominic Tyler.