Merely tagging a brand or marking a post as #gifted is not enough.
Influencer marketing
Influencers have become pivotal in shaping consumer behavior, making influencer marketing an essential strategy for brands to promote products and enhance brand visibility. Integrating influencers into social media campaigns is now a standard practice for businesses aiming to connect with their target audiences. However, the rapid growth of this marketing approach has given rise to significant legal and ethical challenges, necessitating the introduction of updated regulations. Recognizing this, Malta's regulator for competition and consumer affairs, the Malta Competition and Consumer Affairs Authority (MCCAA) has issued new guidance addressing transparency and disclosure requirements in influencer marketing.
Are influencers traders?
The concept of an "influencer," as understood today, was not envisaged at the time when much of consumer and business legislation was drafted. Under Maltese law, as one could expect, the term "influencer" is not explicitly defined. To determine the applicable legal framework, one must turn to the definition of a "trader" under the Consumer Affairs Act (Chapter 378 of the Laws of Malta), which refers to any person acting for purposes related to their trade, business, craft, or profession.
European legislation provides further clarity. The Unfair Commercial Practices Directive (2005/29/EC) defines a trader similarly, encompassing anyone acting for purposes relating to their trade, business, craft, or profession, including those acting in the name of or on behalf of another. By these definitions, influencers clearly qualify as traders under Maltese law. This classification subjects them to the same legal and ethical obligations as any other trader in their interactions with consumers, irrespective of the size of their following. Influencers must therefore meet established standards of transparency and consumer protection, just as any business entity would.
Disclosure Guidelines for Influencers
In November 2024, the Malta Competition and Consumer Affairs
Authority (MCCAA) issued guidelines titled Influencer Marketing
& Consumer Rights, aimed at regulating the relationship between
influencer marketing and consumer behaviour while prioritising the
protection of consumer rights. These guidelines set out clear
distinctions between acceptable and unacceptable practices for
influencers, ensuring both legal compliance and the safeguarding of
consumer interests.
Specifically, they establish standards for promoting products on
social media in line with consumer protection regulations,
including the following new concrete do's and don'ts for
influencers
- Transparent Disclosure: Influencers must clearly communicate the commercial relationship in every post, reel, or story. This requires explicit labels such as "advert" or "advertising." Verbal disclosure or merely tagging the brand is insufficient.
- Use of Platform Features: Disclosure tools provided by social media platforms, such as "paid partnership" or "sponsored," should be utilised.
- Prominent Placement: Disclosures must be displayed prominently, ensuring readability through high-contrast text and background, and should appear at the beginning of a post or on the first screen.
- Avoidance of Ambiguity: Terms like "gifted," "partner," or "#ad" are considered too vague to properly convey the commercial nature of the collaboration and may mislead consumers.
- Commitment to Transparency: Honesty in promoting products and providing reviews is essential.
These guidelines underscore the MCCAA's commitment to promoting transparency and accountability in influencer marketing practices.
Why transparency matters
In influencer marketing, authenticity plays a crucial role in enhancing the persuasiveness of recommendations. To foster an efficient and fair competitive market that benefits both consumers and brands, transparency is essential. It allows consumers to better evaluate the value, relevance, and authenticity of the products or services being promoted. By clearly labelling sponsored content, consumers are empowered to make informed decisions about whether they trust the influencer's recommendation and whether it aligns with their preferences, values, or needs.
Practical tips
Failing to disclose, or attempting to conceal, a commercial relationship between an influencer and a collaborating company constitutes a breach of the legal provisions under the Unfair Commercial Practices Regulation (Part VIII, Consumer Affairs Act). Such breaches may result in judicial proceedings and penalties imposed by the Civil Courts (Commercial Section), following the institution of a case by the Director General (Consumer Affairs). Any person found guilty of a breach of the legal provisions under this Act may, on conviction, could be liable to a fine between €470 and €47,000.
Influencer marketing works by tapping into the trust which influencers have cultivated with their audience, which in turn drives engagement and promotes products in a way which feels more organic and authentic. To ensure long-term success and maintain the integrity of one's brand, it is important that influencers prioritize transparency. Disclosing sponsored content clearly enables consumers to make more informed decisions. It is important for brands to establish clear guidelines outlining the conduct expected from content creators and to communicate these requirements to the influencers or their representatives at the start of the partnership. This allows influencer marketing to be effective and beneficial for brands.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
