The Social Media Influencer Series: A guide to the law on Advertising

25 April 2024 | Reputation & Media

The Social Media Influencer Series: A guide to the law on Advertising

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A major component of an influencer’s job is advertising. Companies collaborate with content creators to improve their brand recognition, increase engagement with their channels and, most importantly, to sell products. But, despite being a new frontier for advertising, social media is not an entirely lawless place. Influencers have been getting into hot water in recent months for breaking advertising guidelines. Former Made in Chelsea star, Alexandra ‘Binky’ Felstead, and former Eastenders actress Jacqueline Osborne feature on the list of influencers who have routinely failed to disclose when they are advertising to consumers on their social media accounts. So, what are the rules on social media advertising and how can you avoid falling foul of them?

What rules apply?

Social media influencer advertising is regulated by the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and the CAP code. Under the Regulations and the CAP Code, unfair practices – such as giving the impression that you are a customer of a brand rather than a promoter – are not permitted. Influencers must be honest and direct about their relationship to the brands and products they are promoting and are expected to express their genuinely held views.

The Advertising Standards Authority (ASA) enforces the CAP code and the Competition and Markets Authority (CMA) and Trading Standards Services can investigate and take legal action against breaches that harm the collective interests of consumers. This guide, published by the CMA and Committee of Advertising Practice provides a useful starting point for the responsibilities of influencers when promoting products.

It is important to emphasise that breaching the CPR is against the law. The CMA has taken action against a number of celebrity influencers, including Ellie Goulding, Alexa Chung, Rosie Huntington-Whiteley and Rita Ora.

What activity does it cover?

Social media influencers are responsible for indicating where they have received payment, or another incentive, in return for promoting certain products. This can include any kind of commercial relationship with a brand, including being a brand ambassador or shareholder, obtaining a commission, having personal connections through friends and family, or receiving trips or services for free.

For example, in July 2022, the ASA ruled that Instagram posts by Myleene Klass did not sufficiently identify that there was a commercial arrangement between her and the fashion brand, Next, despite referring to the clothes as ‘my collection’.

These requirements for labelling adverts apply to posts, and extend to any competitions, prize draws, giveaways, and affiliate marketing – even where the agreement between a company and an influencer is informal.

How do I make sure I am complying?

The guidance states that paid and incentivised content should be instantly recognisable as an advert. The safest, and de facto, way of complying with this requirement is by including #Ad or #Advert at the start of any post. The inclusion of the hashtag is not compulsory, but it will not suffice to hide the notice within a sea of other information. For instance, an ASA ruling last year found that an Instagram story which included a voucher code with the influencer’s name still breached the CAP Code by failing to include the ‘ad’ label.

You must also be aware that the rules extend beyond ad-labelling. When advertising age-restricted products, such as alcohol or gambling, running your own prize giveaways or promoting goods which are heavily regulated, such as food or supplements, there are additional considerations that you must take into account. For example, in 2022, the ASA has banned social media ads which advertised prescription-only drugs to the public and made unsubstantiated claims about the effectiveness of hair products and drinks.

H3: What are the consequences of breaking the CAP code?

Influencers who have repeatedly breached the code will be publicly shamed on the ASA’s ‘Non-Compliant social media influencers’ list. Influencers who make the list will be contacted by the CAP compliance team and be asked to commit to using clear and honest ad labels going forward. Not only is being featured on the list bad for your brand’s reputation, but it can also lead to further consequences, such as additional scrutiny and spot-checking of your account. Continued failure to comply can even result in ASA paid ad campaigns highlighting the influencer’s non-compliance, the removal of non-compliant material and referral to the CMA or Trading Standards Services enforcement bodies.

Atkins Dellow help clients all over the UK with legal matters regarding: Media Law, Reputation Management and Privacy Law. For more information about our services call us on 0330 912 8338.

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Please note this article is provided for general information purposes only to clients and friends of Atkins Dellow LLP. It is not intended to impart legal advice on any matter. Specialist advice should be taken in relation to specific circumstances. Whilst we endeavour to ensure that the information in this article is correct, no warranty, express or implied, is given as to its accuracy, and Atkins Dellow LLP does not accept any liability for error or omission.

© Atkins Dellow LLP 2024

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