In recent years, the Office of Competition and Consumer Protection1 ('UOKiK') has increased its efforts to control and regulate influencer marketing in Poland. In 2020, influencers promoting financial pyramids were punished (one influencer was fined almost 95,000 euros). During these prosecutions, the authority noted the existence of the problem of surreptitious advertising on social media.
Proceedings concerning surreptitious advertising
A failure to label sponsored content constitutes surreptitious advertising, which is strictly prohibited and is included in the so-called 'black list of unfair market practices' contained in Art. 7 of the Polish Act on Counteracting Unfair Market Practices2. In addition, surreptitious advertising may in some cases also be 'unfair advertising' at the same time, which constitutes a violation of the Polish Act on Combating Unfair Competition3.
Proceedings concerning surreptitious advertising aim to determine whether the activities undertaken by influencers on portals such as Instagram, Facebook, Youtube or TikTok do not mislead consumers with regard to the way advertising content is presented on those social networks, since this could violate the provisions of the Polish Act on Competition and Consumer Protection4 in a way that would justify the initiation of proceedings for practices infringing the collective interests of consumers.
As part of its investigations into surreptitious advertising, UOKiK examined the profiles of the most popular Polish influencers and their contracts with advertisers in order to find out what why sponsored posts were not labelled as such. The President of UOKiK contacted dozens of popular influencers to obtain the information and documents needed to verify the legitimacy of their marking of advertising content on social media. The aim was to determine whether it is the advertisers who require influencers to conceal the fact that the content they present constitutes advertising, or whether such negligence lies with the content publishers. According to UOKiK, an examination of the documents was necessary to verify the nature of the cooperation between influencers and brands or marketing agencies, and this in turn should help send a clear message to consumers.
Fine for failing to cooperate
In a press release, UOKiK reported that several influencers who received a request from the President of UOKiK failed to provide information or supply the relevant documents. A lack of cooperation in the course of the proceedings can make it difficult to prove the existence of an unlawful market practice (in this case, surreptitious advertising), and could thereby constitute a breach of Art. 50(1) and (2) of the Polish Act on Competition and Consumer Protection, pursuant to which entrepreneurs are obliged to provide all necessary information and documents when requested to do so by the President of UOKiK. A failure to respond, or providing false or misleading information, is punishable by a maximum penalty of up to 50 million euros.
The actions that were considered by UOKiK as a lack of cooperation were:
- receiving a request from UOKiK but failing to respond;
- failing to respond to a postal notice of service delivered twice;
- failing to provide information on the previous year's turnover as requested by UOKiK;
- providing incomplete information and failing to supplement this information after being requested to do so by UOKiK.
The President of UOKiK issued six decisions to penalise influencers for such conduct. The fines imposed range from 869.68 to 10,870.98 euros. The decisions are not final, and those penalised may appeal. It should be emphasised that these are not penalties for the incorrect labelling of advertisements (with regard to which proceedings are still pending), but for a lack of cooperation, which has lengthened the proceedings and made it difficult to establish the facts. The influencers from which the President of UOKiK requested documents were not suspected of anything. As we can read in the decisions in question, the purpose of the fines was to discipline the participants and to implement the principle of economy of proceedings conducted in the public interest. The fines imposed are of a repressive character - they constitute a sanction for
a violation of the statutory obligation to provide information, and of a preventive character - they deter people from committing similar violations in the future.
Additionally, the decisions in question establish that:
- in the absence of a reply to a request sent to a designated address for service, UOKiK sends requests to all addresses available in the Central Registry and Information about Business Activities (the Polish register of entrepreneurs), i.e. not only to the designated address for service, but also to the address of the permanent place of business and the address of the secondary place of business;
- if no information on the previous year's turnover is provided to UOKiK, UOKiK will obtain this information itself from the tax office;
- responding to a request after the commencement of proceedings for the imposition of a penalty for non-cooperation with UOKiK will not protect the trader who initially failed to comply with the obligation from a fine, but may probably contribute to a reduction in the amount of the fine.
Moreover, it should be pointed out that UOKiK has a habit of requesting entrepreneurs to submit relevant documents at least twice, which is evident not only from these, but also from other cases conducted by this authority. Nevertheless, sending a second request is not explicitly laid down in law.
UOKiK's plans for influencer marketing
Since being informed of the initiation of proceedings concerning surreptitious advertising, influencers have started tagging their sponsored posts with hashtags such as '#ad' and '#cooperation'. UOKiK considers this to be insufficient, recommending the use of unambiguous messages such as '#advertising' or '#sponsoredmaterials'. As a result of its investigation into surreptitious advertising, UOKiK plans to provide guidelines and recommendations on how influencers should label their sponsored content in order not to expose themselves to accusations of surreptitious advertising. Further, the President of UOKiK does not rule out legal regulation in this area.
1 It should be noted that the Office of Competition and Consumer Protection (Polish: Urzad Ochrony Konkurencji i Konsumentów; UOKiK) is a Polish authority with jurisdiction over both antitrust cases and the protection of the collective interests of consumers.
2 Act of 23 August 2007 on counteracting unfair market practices (Journal of Laws 2007 No. 171 item 1206).
3 Act of 16 April 1993 on combating unfair competition (Journal of Laws 1993 No. 47 item 211).
4 Act of 16 February 2007 on Competition and Consumer Protection (Journal of Laws 2007 No. 50, item 331).
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