On September 26, 2022. The President of the Office of Competition and Consumer Protection (the "President of the OCCP") has published recommendations on the labeling of advertising content by influencers on social media1 (the "Recommendations"). The purpose of the Recommendations is to standardize advertising practices in the influencer marketing industry. While the Recommendations are not legally binding, they do contain a number of guidelines on how to properly label advertising and sponsored content on social media. The document is also an important source of information on the Polish regulator's approach to the implementation of legal obligations regarding the correct labeling of advertising on social media.
The following is a brief summary of the Recommendations. Due to the size of the material and their multi-faceted nature, the article has been prepared in two parts. The first addresses the following issues: (i) to whom are the Recommendations addressed; (ii) who is an influencer (and whether he/she must conduct business activity), (iii) when content posted by an influencer is commercial in nature and (iv) when is it not necessary to label the material as advertising? In the second part, I will discuss specific ways to label advertising content that the Polish regulator (President of the OCCP) believes should be used to properly fulfill legal obligations.
To whom are the Recommendations addressed?
The Recommendations are addressed in particular to influencers, advertising agencies and advertisers - i.e. the entities that bear the greatest responsibility for the proper labeling of ads and sponsored content in social media. It is worth bearing in mind that the correct labeling of ads results not only from industry ethical standards (many organizations have developed their own codes of conduct in thisregard2) but also - and perhaps most importantly - from the law3.
Who is an influencer? Is an influencer an entrepreneur? Does an influencer need to have a registered business?
According to the definition provided in the Recommendations (see section below for more on definitions), an "influencer": 1/ is a creator who actively publishes on social media; 2/ communicates with his/her followers; 3/ can influence the opinions, decisions or behavior of his/her followers through his/her publications. Not every influencer is an entrepreneur as defined by law. However, if a given influencer obtains material benefits (not only financial!) from his/her activity and at the same time conducts an organized business activity in his/her own name and on a continuous basis, then such an influencer is an entrepreneur. The above also applies if the influencer has not registered a business. It is worth to remember that - under certain specific circumstances - it is possible to conduct an unregistered business.
What does it mean that an influencer obtains material benefits?
To consider a given content as commercial, an influencer should, among other things, obtain material benefits resulting from his/her activities. Material benefit is not only monetary remuneration. Material benefit can also be in the form of in-kind remuneration, such as receiving products or services, discounts on the purchase of such products or services, profits from the publication of discount codes, receiving bonuses, gifts, promotional vouchers or even covering the additional cost of attending an event (other than just an admission ticket). The material benefit is also an increase in sales of the influencer's own goods or services.
When are materials commercial in nature?
Materials are commercial in nature when their author (influenser) receives material benefits as a result of their publication (discussed above). To consider the content commercial, it does not matter in what form the influencer received remuneration (whether it was monetary or in-kind) and in what form the agreement with an advertising agency or advertiser was concluded. It is worth to note that the above-mentioned agreement may by concluded in any form, not only in writing. Arrangements in the form of a telephone conversation, exchange of e-mails or messages on Messenger may also mean that the contract has been concluded - as long as it contains all the provisions required for the validity of the contract.
For the classification of material as commercial, it is also irrelevant whether the advertiser has an influence on the content of the material, including whether the approval of the agency / advertiser was required before the publication of a given video or post. In other words: even in a situation where the influencer independently realizes the material, according to his own scenario or idea, and the ordering party does not approve it before publication, such material should be marked as commercial. Similarly, in a situation where the influencer expresses only his own opinion about a product or service he received on his own (e.g. a specific model of phone or a service at a beauty salon) - such a review is also commercial material. The situation is different when the influencer did not acquire ownership of the product, but only used it for testing, with the requirement to return it. In this case, it is not necessary to mark the material as commercial. We only have to inform our followers: 1/ from whom we received the product; 2/ that we need to return it and 3/ that we received it free of charge.
For the recognition of material as advertising, the duration of cooperation between the influencer and the agency / advertiser is irrelevant, i.e. whether we advertise something once or whether we are an ambassador of a given brand for several years. In the opinion of the President of the OCCP, if there is any doubt whether the material should be marked as advertising or not, the influencers should mark such material as advertising.
When is it not necessary to mark a material as advertising?
In the opinion of the President of the OCCP, the situations described below do not require labeling the material as advertising. However, it is necessary to inform the followers that the given product / service was received free of charge. This is to clearly distinguish this type of material from neutral content that relates to the influencer's daily life.
The Influencer received an admission ticket to an event (e.g., to a concert, cinema or theater) from the organizer in order to publish a review of such event. The Influencer did not receive any additional remuneration for this; nor did the event organizer cover any additional costs (such as travel or accommodation).
The influencer received a product from the brand to test in order to publish a review of such a product. After testing, the influencer is obliged to return the product and does not receive any additional remuneration from the producer.
The Influencer received a package of gifts from the brand of a small value (the so-called: seeding kits or influencer kits), such as samples of new cosmetics or a new model of thermal mug. This is the first gift from this company.
Is self-promotion an advertisement?
Yes. Self-promotion - that is, the promotion of the influencer's own brand - is also an advertisement, and should therefore be labeled accordingly. We are talking about the situation when the influencer runs a business or owns shares in a particular company, whose goods or services she/he advertises on her/his social media.
Do the Recommendations introduce new legal obligations?
No. The Recommendations do not introduce new legal obligations. Regulations on ad labeling are already in place. However, until now, each author / agency has had its own standards and guidelines in this regard. The purpose of the Recommendations is to suggest an interpretation of the regulations already in force and advice on how these regulations should be applied in practice. The Recommendations, however, introduce definitions of several terms that are commonly used in the influencer marketing industry, and until now have not had their legal definition, namely: "influencer," "social media," "advertising agencies," "advertisers" or " followers." Interestingly, the document also includes a definition of "advertising," which is slightly different than the legal definition of "advertising"in the Broadcasting Law4.
1. Recommendations of the President of the Office of the Competition and Consumer Protection on the labeling of advertising content by influencers on social media; the document is available only in Polish, at: https://uokik.gov.pl/aktualnosci.php?news_id=18898.
2. For example: Code of Ethics in Advertising, published by the Union of Associations Advertising Council: https://radareklamy.pl/en/code-of-ethics-in-advertising/.
3. In particular, the following legal acts should be taken into account: the Law on Provision of Electronic Services, the Law on Broadcasting, the Law on Combating Unfair Competition, the Law on Protection of Competition and Consumers, the Law on Combating Unfair Trade Practices, or the Press Law.
4. Advertising is a commercial transmission, whether from a public or private entity, in connection with its economic or professional activity, aimed at promoting the sale or use of goods or services for a fee; advertising is also self-promotion.
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.