UK: Another Surprising AI Application: Virtual Influencers

Last Updated: 10 July 2019
Article by Giangiacomo Olivi and Valeria Schiavo

Have you ever heard of Miquela Sousa, Sophia the Robot or Shuda? These names refer to a new category of influencers that are not human, but robots, also known as CGI creations. The term CGI (computer-generated imagery) refers to the technology used to create pictures through computers, which is now also used for the creation of Instagram influencers and trendsetters. As better described in our post on "Fashion and new technologies", AI algorithms have an infinite number of applications in the fashion world and the latest trend is the invention of these virtual influencers, which are becoming very popular. However, the development of such CGI influencers, being machines and not humans, has raised a number of relevant legal issues, some of which will be addressed in this post.

1. CGI influencers and social media

Influencers and trendsetters carry out economic activities and nowadays they play a very important role in consumers' purchasing decisions. Therefore, even influencers and trendsetters must comply with the rules on fairness and transparency relating to advertising and with the provisions on the protection of distinctive signs – such as trademarks (which will be discussed below)1. This certainly applies to influencers that are human, but what about CGI influencers? With regard to influencers' advertising communications on social media, in Italy both the Italian competition authority (Autorità Garante della Concorrenza e del Mercato or "AGCM") and the Italian institute for the self-regulation of advertising (Istituto di Autodisciplina Pubblicitaria or "IAP") have recently intervened. In this regard, according to the IAP "Digital Chart" and to the AGCM's "moral suasions", subjects who carry out activities for promotional purposes through communications on social media are required to report them with appropriate indications in order to clarify the promotional nature of their communication. More specifically, communications of such a nature must be accompanied by hashtags such as #Advertising or #Sponsored by or #ad.

All these rules aim at protecting the content of advertising communications. However, the legal uncertainty concerning their applicability to virtual influencers may lead to a situation in which advertising communications published by robots do not receive an adequate level of protection.

2. The imputability of influencers' communications

Another relevant issues concerns the imputability of advertising / commercial communications carried out by a brand / trademark owner through an influencer. In the event that the influencer carries out incorrect actions, in Italy Article 2049 of the Italian Civil Code applies. This article affirms the principle of indirect liability, according to which the committer is liable for the actions carried out by its auxiliary (the influencer), provided that the committer has a certain power to control and supervise the influencer /auxiliary. Moreover, according to Italian jurisprudence, the first criteria for identifying the subject to which a specific advertising communication is attributed is to identify the subject who has decided and managed the initiative relating to such advertising activity. Moreover, it is necessary that between the author of the advertising communication and the person benefiting from it there is a significant relationship (a so-called "material connection"). But in the case in which the influencer is a robot, who will be the subject/entity attributable for the dissemination of a certain advertising communication? Would it be possible to affirm with certainty that the committer of the ad communication has full power to control and supervise an influencer-robot within its activity of dissemination of advertising communications? Moreover, would it be possible to identify a relationship of material connection between the owner and the CGI influencer? Or, on the contrary, would it be necessary to identify such a relationship between the owner and the manufacturer of the robot/virtual influencer?

3. Reproduction of trademarks and other distinctive signs

It may happen that in a photo used for commercial / promotional purposes on social networks published by an influencer, brands and trademarks of third parties appear. It often happens that someone is photographed wearing outerwear showing a certain trademark that has to be promoted, but at the same time they are wearing other clothing items, or bags and accessories bearing another brand or showing a third party design that is perfectly visible or recognizable. The visibility of trademarks or designs by third parties may constitute an infringement of their exclusive rights to their distinctive signs (pursuant to Articles 20, 22 and 41 of the Italian Legislative Decree no. 20/2005 or the "Italian Code of Industrial Property") and may cause confusion to the consumer, who, when looking at the picture, may believe that all products shown are attributable to the entrepreneur of the sponsored trademark. Furthermore, the use of third-party trademarks or designs may lead to a case of unfair competition (punishable under Articles 2598 and ff. of the Italian Civil Code). Humans and, with regard to the case of unfair competition, entrepreneurs pursuant to Article 2082 of the Italian Civil Code − who are in a competitive relationship − are certainly punishable for such infringements. But would it be possible to consider robots liable for the same? As discussed in our post on "Robots and Liability", liability for infringements may be attributed to robots' manufacturers pursuant to the provisions implementing Product Liability Directive no. 85/374/EEC. This Directive is based on strict liability (responsabilità oggettiva) of producers of defective products, also in the event of personal injury or damage to property. However is still not quite clear if the principle of strict liability is applicable to robots' manufacturers and if those are liable for the actions carried out by their "creatures".

4. Conclusion

Millions of people around the world seem to be very enthusiastic about virtual influencers, which represent the latest trend developed by AI algorithms. However, from the above analysis emerges a great level of uncertainty relating to the liability of this new category of influencers, which may cause a number of issues relating to the regulation of their advertising activities and communications.

There is a need for an urgent intervention by the legislator even if, at the present stage, it is not possible to predict how the legislation on AI and liability will evolve.

Footnote

1 It should be noted that the advertising nature of a communication depends on its promotional purpose.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

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