The UK’s Competition and Markets Authority announced yesterday, following its investigation (see our earlier article available here), that it has secured commitments from 16 social media influencers about how they post online (see link to CMA press release here). The influencers, including singer Rita Ora and model Alexa Chung, have agreed to clearly state if they are in a commercial relationship, or are receiving payment in kind, for any products that they endorse on their social media channels.

Reflecting on the formal pledge made by the 16 celebrities, Andrea Coscelli, Chief Executive of the CMA (a UK government department responsible inter alia for enforcing consumer legislation) noted that influencers have a “huge impact on what their fans decide to buy”. He stated “you should be able to tell as soon as you look at a post if there is some form of payment or reward involved..” and these steps by the CMA relay a salient message to brands and influencers that “they must be open and clear” in order to comply with consumer protection law.

The CMA has also published a new quick guide for influencers about how to be transparent with followers (see link here “Guidance”). This is the latest guidance provided during a long-running effort by national enforcers such as the ASA and CMA to clamp down on unclear influencer marketing and advertising practices and to assist them with understanding what they need to do to comply with the rules. See our earlier blog posts published in the last few months on this topic here and here.

While this latest guidance focuses on what influencers must do, it is clear from earlier guidance that the responsibility for compliant posts is shared between the influencer and the brand with which they are connected; so brands should also take note and update their influencer guidelines accordingly.

Guidance from the CMA for labelling of influencer posts

The main points are that influencers should:

1. make it clear to followers when they have been rewarded to advertise a product or service, e.g. through payment, or being gifted or loaned a product;
2. be transparent about their relationship with any brands/businesses (current or reasonably recent past i.e. “within the last year”) by expressly stating their post is promotional in nature (e.g. just including discount codes in a post is not enough);
3. not mislead consumers, e.g. by failing to disclose their “business purpose” and suggesting they are just a consumer of the relevant product or service; by suggesting they bought it when it was a gift/freebie; or, by suggesting they have used a product/service when they haven’t.

The CMA maintains the existing regulator position that there is no one way to make posts clear and that different platforms have different options for doing so, but they have provided some quick do’s (e.g. ‘Advertisement Feature’ / ‘Advertisement Promotion’, #Ad, #Advert, and using the ‘Paid Partnership’ tool on Instagram in addition to these hashtags) and don’ts (e.g. #sp; #spon; #client; #[BRAND NAME]ad; “thank you [BRAND]”; or merely tagging a brand). They state that an effective disclosure must be (i) transparent; (ii) easy to understand; (iii) unambiguous; (iv) timely; (v) prominent; and (vi) on the same page as the post (no click required to view).

Links to earlier guidance by the ASA and the CMA are available here, here and here.

Conclusion

The CMA’s announcement and Guidance does not constitute new rules or rule changes, but it does add a few new points of detail to existing guidance (particularly the more detailed list of disclosures which do not go far enough to draw the promotional nature of the product reference to the consumer’s attention). It also makes clear that this is and continues to be a hot topic for the regulators. For example, in addition to the pledges it has obtained from the 16 influencers, warning letters have also been sent to other celebrities asking them to review their current practices, and the CMA has said it will be undertaking further investigation work into the role and responsibilities of social media platforms.

Accordingly, brands that have working relationships with influencers must actively work with influencers to ensure that they understand and are complying with the rules, because ultimately the brands may also be held responsible if an influencer’s post fails to comply.

We anticipate that further guidance, new platform tools, and new recommended practices may emerge once the CMA has carried out its investigation of social media platforms.