If asked what Alexa Chung, Ellie Goulding and Rita Ora have in common, you might point to their wealth, fame and luxury lifestyles. Now they are linked together by another, far less glamourous, connection. They’ve all been targeted by the Competition Markets Authority (CMA) under its recent clampdown on ‘influencers’ endorsing products via social media posts without disclosing they were being paid by a company.
The CMA (after sending warning letters) has secured formal commitments from 16 celebrities, including the likes of Michelle Keegan, Louise Thompson and Zoella, to state clearly if they have been paid or received any gifts or loans of products that they endorse online.
Any form of reward, including money, gifts of services or products, or the loan of a product, is ‘payment’. This applies whether the influencer originally asked for the product or if they receive any freebies out of the blue. Any free hotel stays or free flights could also be considered as payment.
This information has to be prominently displayed so that any viewer (including those not familiar with the influencer) can easily and immediately determine the nature of the relationship from the content. If the influencer is including discount codes, competitions or giveaways, or references to their own range of products, this is not enough to make the relationship clear. Past relationships should also be disclosed.
The law is not prescriptive about how influencers should declare their relationships with brands, especially as social media (and the devices used to access them) continues to change and evolve. However, the guidance states any disclosures of paid for content should be ‘transparent, easy to understand, unambiguous, timely and prominent’ and ‘apparent without the need for people to click for more information’.
The guidance also highlights examples of bad practice that should be avoided, including:
Influencers should not give the false impression that:
Failure to comply with the above guidelines could result in influencers falling foul of the Consumer Protection from Unfair Trading Regulations 2008. This could end in a fine, or even imprisonment in the most extreme cases, and a raft of negative and damaging publicity.