The CMA releases additional guidance in relation to paid-for online endorsement

UK- Advertising and Marketing

On 3 November 2022, the Competition and Markets Authority ("CMA"), working with the Advertising Standards Authority ("ASA") and Ofcom, has published three separate guides for social media companies, brands, and influencers which are intended to provide each with clear guidance in relation to paid promotions and ensure appropriate measures are put in place to protect social media users from hidden advertising.

Key date(s)

• 3 November 2022 – CMA releases guidance for social media companies, brands, and influencers in relation to paid-for online endorsements.

Status

• On 3 November 2022, the Competition and Markets Authority ("CMA"), working with the Advertising Standards Authority ("ASA") and Ofcom, published three separate guides for social media companies, brands, and influencers which are intended to provide each with clear guidance in relation to paid promotions and ensure appropriate measures are put in place to protect social media users from hidden advertising.

 What it hopes to achieve 

• The new guides set out the expectations for social media platforms, brands and influencers about being open and upfront when it comes to paid promotions, as well as explaining the roles and responsibilities of the different regulators of online advertising.

Who does it impact? 

• This latest guidance was developed by the CMA to provide further resources to assist platforms, brands, and influencers comply with existing legislation and rules. To that end, while the legal position remains unchanged as a result of this release, affected parties now have additional guidelines and principles by which they can measure their expected compliance.
• These guidelines could be considered alongside the recently published ISBA Code of Conduct for influencer marketing, which provides further guidance for brands and influencers in marketing more generally.

Key points 

1. Guidance for social media platforms

• • The CMA, working alongside social media platforms such as TikTok, YouTube, Twitter, Snapchat, Pinterest, and Twitch has developed "Compliance Principles" to assist in platforms' prevention of hidden advertising (which are a development of similar undertakings provided by Facebook to the CMA in October 2020). The Compliance Principles require platforms to:
    • inform users that incentivised endorsements are required to be clearly identified as advertising and clearly distinguishable from other content;
    • provide content creators with tools so they are easily and effectively able to label any content as advertising;
    • take appropriate, proportionate, proactive steps and use available technology to prevent hidden advertising from appearing on their sites;
    • make it simple for users to report suspected hidden advertising easily and effectively;
    • facilitate legal compliance by brands; and
    • enforce terms and conditions and take appropriate action when violations occur.

     

    The CMA considers that social media platforms are more likely to comply with the requirements of consumer law and reduce the risk of future enforcement action if they implement the above principles, but note that:

    • platforms may comply with consumer law via alternative means not provided for in the Compliance Principles;
    • platforms must continue to review their compliance and update measures proactively; and

    these guidelines do have any legal status and that only courts have the ultimate discretion to determine when a law is broken.

2. Guidance for businesses and brands

• • This guidance was produced by the CMA with the aim of clarifying and reinforcing the responsibility of brands and businesses to tackle hidden advertising.In the guidance, the CMA notes that regardless of the status of the relationship between brands and influencers (for example, whether there was a formal agreement or whether the influencer received gifts), promotional content should be labelled clearly as adverts.Brands could:
    • work with content creators they engage to understand their legal obligations to disclose adverts;
    • include instructions in gifts that any content posted regarding the gift should be appropriately labelled; and
    • introduce policies setting out "brand rules" on influencer conduct, requiring creators to follow ASA and CMA guidance;

    The guidance also suggests that brands check creators' posts to ensure content is properly identified as advertising. Crucially, this principle extends to circumstances in which businesses do not explicitly ask for influencers to create content. On becoming aware of content with insufficient labelling regarding their brand, businesses should take action to remedy this.

3. Guidance for influencers

• • In this final guide, the CMA reaffirm that when influencers are paid to post, receive gifts, or post on behalf of a brand they own or are employed by, posts should clearly display the "'#Ad" or "#Advert" hashtag (and avoid less clear hashtags like "#gift").The guide explains the influence illegal adverts can have, misleading consumers and giving the impression that influencers stand by products and brands when they have benefitted from incentives to do the same.The CMA states that influencers should:
    • not make false or unsupported statements (e.g. claims that cannot be proven or the influencer has not tested themselves);
    • label adverts clearly (using terms such as "Ad" or "Advert");
    • avoid ambiguous labels (such as "gifted", "collab" or "made possible by");
    • ensure disclosures are clearly visible (audiences should not have to magnify content to cross-reference information with the influencer's profile page, for example);
    • ensure that disclosures are obvious as soon as the audience engage with the content; and
    • be clear when they are employed by or own a brand they promote.

     

    The CMA notes that the ASA can ban undisclosed adverts by influencers and, if necessary, impose further sanctions.

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