UK Government responds to the DCMS Committee report on influencer culture

UK – Advertising and Marketing 

The UK Government published a response to the DCMS Committee's report on influencer culture. The Government intends to broaden the scope of the CMA's enforcement powers to determine where consumer law has been broken, and expressed the Department of Education's willingness to consider potential legislative changes to protect child influencers.

Key date(s)

• 9 May 2022 - The Digital, Culture, Media and Sport Committee published its Twelfth Report of Session 2021–22, titled "Influencer Culture: Lights, camera, inaction?" (the "Report")
• 23 September 2022 – UK Government publishes response to the DCMS Committee's report (the "Response").

Status

• On 26 March 2021, the DCMS Committee (the "Committee") launched an inquiry into “the power of influencers on social media, how influencer culture operates, and … the absence of regulation on the promotion of products or services, aside from the existing policies of individual platforms” with a view to assessing whether further regulation is required. The Committee's Report, published in May 2022, highlighted several regulatory gaps, in particular concerning advertising disclosure and the protection of children, both as influencers and viewers of influencer content. The Report called for the urgent reform of influencer marketing regulation.
• On 23 September 2022, Government's Response to the Report was published. The Response addressed the Committee's concerns and gave an indication of the Government's legislative agenda with respect to the online influencer market. The Response did not indicate any immediate changes to legislation which had not already been publicised. However, the response does indicate the stronger stance the Government intends to take towards the influencer industry

 What it hopes to achieve 

• The Government's response outlines its consideration of the issues raised by the Committee in its Report and the ways in which the Government expects these to be addressed.
• While the Committee's report highlighted the perceived shortcomings in current regulations and prompted further action including legislative action from the Government, the Government in its response has highlighted that existing legislation and consultations in the pipeline are already aimed at addressing the issues raised by the Committee.

Who does it impact? 

• The Government's response did not indicate any immediate changes to legislation which had not already been publicised. However, the response does indicate the stronger stance the Government intends to take towards the influencer industry, given the growing scope of the CMA's powers and the Department for Education's potential legislative agenda. There will likely be an increased need to ensure agreements are compliant with newly introduced legislation and regulations.
• Brands and influencers may need to formally agree "best practices" with respect to online advertising: marketing products in ways which are brand-appropriate and legally compliant.
• Meanwhile, platforms may need in the medium term to publicise and circulate more in-depth policies on sponsored content and marketing, as well as developing user interfaces to more clearly designate sponsored content.
• Consumers and vulnerable people will likely benefit from the Government's stated approach, but this will ultimately depend on the content of the published bills and regulations.

Key points 

The Government issued the following 6 key substantive responses to issues raised by the Committee's Report:

1. Online Safety Bill

• • The Government rejected the Report's recommendation that the Online Safety Bill be amended to require online platforms to tailor complaint mechanisms to different types of harm. The Government took the view that the Bill already required platforms to take appropriate action in response to different complaints.

2. Code of Conduct for Influencer Marketing

• • The Government strongly supported the work done by the Incorporated Society of British Advertisers ("ISBA") to-date in developing an influencer code of conduct. In support of this, the Government has already held initial discussions with its industry partners on appropriate guidance to include in the proposed code of conduct.
  • The existence of the ISBA's code of conduct, as well as the Advertising Standards Authority's ("ASA") guidelines on influencer activity was part of the Government's rationale for not imminently producing a further code of conduct for influencer marketing. The Government intends to work alongside the bodies and provide input as required for further or updated codes.

3. CMA enforcement powers

• • The Government agreed with the Report's concerns that the Competition and Markets Authority ("CMA") lacked sufficient enforcement powers, such as stronger powers to enforce compliance and the ability to make decision independently without the need to go to court. The Government referred to its draft Digital Markets, Consumer and Competition Bill which was announced in the 2022 Queen's Speech. The measures proposed in this bill will give the CMA the ability to decide for itself when consumer law has been broken, and to issue fines for rule-breakers.

4. Online Advertising Programme
   • The Committee's Report raised concerns around the lack of transparency of advertising in influencer posts. The Government noted in its response that it is currently considering responses to its consultation on the Online Advertising Programme, which closed on 8 June 2022. The focus of this programme is to improve transparency and accountability, protect consumers, and reduce harms found in online advertising. The Government stated they will consider the Committee's recommendation that the ASA be given statutory authority to enforce the CAP Code as part of the range of options of regulatory oversight that could be applied across the online advertising supply chain.
5. Department for Education and Child Influencers
   • The Committee noted the growth in recent years of the market for child influencers and the corresponding safeguarding concerns that accompany this, as well as the apparent gap in UK child labour and performance regulations. The Government referred to the current powers the Department for Education has under Section 37 of the Children and Young Persons Act 1963 to grant licences for children to participate in certain types of performance, but noted that user-generated content sits outside the scope of the current legislation. The Government stated that the Department for Education is open to exploring whether there may be a suitable legislative vehicle for delivering the Committee's aim of protecting child influencers.
6. Market Review
   • The Government decided against actioning the Committee's recommendation of a review of the influencer ecosystem on the view that the Committee's report shed sufficient light on the ecosystem. While the Government will keep this under review, the Government elected to focus its efforts on the working through the actions proposed by the Committee's Report in the first instance.

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