Influencers under the microscope

Wallmans Lawyers


Wallmans Lawyers is an Adelaide-based commercial firm with a team of nationally recognised leaders. They serve local, national, and international clients in corporate, private, government sectors, and individuals. With 80 staff, they offer services in taxation, superannuation, property, workplace relations, litigation, and dispute resolution. Their clients range from medium businesses to publicly listed organizations in industries such as financial services, professional services, government, health, transport, insurance, and more.
ACCC will be looking at whether online influencers are being sufficiently transparent when they talk about their favourite products.
Australia Consumer Protection
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When your favourite social media personality posts an Instagram story about how much they love their new vegetable spiralizer, do you immediately head to an online store to buy the same one because you trust their judgment? (Is it only me?)

Would you still do it if you knew that they had been paid to post the story? What about if they simply got it for free from 'Big Vegetable'?

Well, reports out today indicate that the Australian Competition and Consumer Commission (ACCC) will be taking a careful look at whether or not online influencers are being sufficiently transparent when they talk about their favourite products and services.

Influencers failing to disclose that their post is an advert, or that they have received free or subsidised products or services isn't new. There are plenty of cases of this kind of conduct from Unilever apologising for influencer Nikki Phillips hocking ice cream, Anna Heinrich promoting a clothing label, all the way to Kim Kardashian hocking crypto without revealing the $250,000 fee she received to do so.

The problem is rife, and regulators around the world are starting to take notice, including the SEC in the US fining Kardashian $1.3M over the crypto adverts, to the UK Advertising Standards Authority taking out ads against influencers who failed to be transparent despite receiving prior warnings about the practice.

It's now Australia's turn, and the ACCC are going to be looking over the feeds to find out who has done the wrong thing.

So, what are the rules in Australia? Well, the starting point under the Australian Consumer Law is that a person must not, in trade or commerce, engage in conduct that is likely to mislead or deceive a consumer.

In addition, the Australian Association of National Advertisers (AANA) have included in their code of ethics provisions regarding 'distinguishability in advertising'. This provides some helpful guidance, but in our opinion is open to some interpretations that would still breach the Australian Consumer Law.

Whilst failing to disclose that you were paid to make a post is a clear cut breach, so too is receiving free or discounted promotional consideration. In a complaint that influencer Rozalia Russian had breached the AANA code, it was claimed that Tom Ford had merely gifted her some products, with no expectation of whether or not she would post a story about it, or any 'reasonable control' over what she would say, the Ad Standards Panel held that because:

  1. Tom Ford knew that Russian was an influencer;
  2. It was likely that Russian would post about it; and
  3. Any such post would have the effect of advertising the brand

It was an advert and should have been labelled as such.

The panel didn't say, but we think it's also reasonable to assume that the fact she was receiving a gift would entice her to make positive statements about it (so as to avoid not getting more gifts in future).

Against that background, brands and influencers should keep in mind that:

  1. if you are advertising your own products or services on your own channels (or channels that make it clear you are an employee/owner of a business), you should be fine;
  2. if you paid someone to post something, you should always make sure they use #ad, #sp or otherwise indicate that the post is a paid promotion;
  3. If a gift is given, that should be made clear. There are plenty of elegant ways you can do this without sounding like a shill;
  4. If ever in doubt, speak to a lawyer who can help you review your copy; and
  5. Don't forget that failing to disclose advertisements can breach the terms and conditions of most social media platforms, so if the ACCC or AdStandards don't get you, the platforms could!

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.

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