27 September 2018

"Nothing To Declare"? Competition Regulator Targets Online Celebrity Endorsements

Brodies LLP


Brodies LLP
The investigation is a reminder that consumer protection law is far-reaching, and can crop up in what might seem to be unlikely places.
UK Media, Telecoms, IT, Entertainment
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The UK competition and consumer regulator, the Competition and Markets Authority (CMA), is launching an investigation into the conduct of celebrities on social media who endorse products or services without properly declaring that they have been paid or otherwise rewarded to do so.

The CMA is concerned about the extent to which online stars are properly identifying commercial relationships, and whether fans viewing the content are being misled. The investigation is a reminder that consumer protection law is far-reaching, and can crop up in what might seem to be unlikely places.

This comes on the back of the CMA's previous investigation into online reviews and endorsements, which led to the regulator accepting undertakings from four businesses to the effect that online advertising would be clearly labelled or otherwise distinguished from the opinion of, say, a blogger, commentator or journalist.

Social media commercial endorsements are big business, exposing goods and services to worldwide audiences.

Facebook, Snapchat and Instagram are awash with snaps and videos of stars and other "social media influencers" who draw the attention of their millions of followers to what clothes they are wearing, the cars they are driving, which cosmetic products they use and where they go on holiday. If they are paid or otherwise rewarded to promote, review or talk about this sort of thing in their social media streams then consumer protection law requires that this must be made clear.

Failure to abide by consumer law could result in enforcement action by the CMA. The CMA's principal concern is consumer detriment: if social media posts are not properly labelled then fans "may be led to believe that an endorsement represents the star's own view, rather than a paid-for promotion. They are then more likely to place trust in that product, as they think it has been recommended by someone they admire." But is the celebrity promoting something because they themselves bought it and like it, or because a commercial organisation is rewarding them to do so?

The UK Advertising Standards Agency (ASA) is also alive to the issues in this field. The ASA recently held that consumers would not necessarily realise that "#sp" stood for "sponsored post" in a video uploaded by reality TV household name Millie Mackintosh, in which she advertised Britvic's J20 soft drink. The ASA determined that the advert was not obviously identifiable as a marketing communication and breached the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing Code (CAP Code). As such the ASA held that the advert must not appear again in its current form and that future adverts by Britvic Soft Drinks Limited must be obviously identifiable as such.

The next steps in the CMA investigation will be interesting. A number of famous names and social media A-listers have been contacted by the CMA and asked to provide more information about their social media content and the nature of any commercial agreements in place with brands. The CMA also wants the public to share their experiences, and you can do so here.

And, just to be on the safe side (and without claiming to be a household name), I declare that I am not being paid by the CMA to endorse this investigation...

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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