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Influencers under Fyre: Celebrities commit to be more transparent regarding product endorsements

The Fyre Festival debacle has not only resulted in legal action being taken against the organisers, one of whom is now in jail, but has also put the role of social influencers under the spotlight.  It is claimed that several hundred influencers obtained tickets or money in exchange for their promotion of the event, in many cases without making the payment clear in their posts. The festival was a sell out but it turned out to be far from the luxury festival it was billed as. Whilst the influencers weren’t themselves responsible for the organisation of the event, many are claiming that they played their part in misleading people.  The event is illustrative of the power of influencers and why they have come under the radar of both the Advertising Standards Authority (ASA) and the Competition and Markets Authority (CMA) particularly in the last year. 

The CMA launched an investigation last year into paid for endorsements on social media platforms following concerns around a lack of transparency.  On the back of this investigation, in January 2019 the CMA secured ‘formal commitments’ from 16 well- known celebrities to be transparent about any payment or other rewards received in exchange for product endorsements. The celebrities who have signed up include Ellie Goulding, Rita Ora and reality tv stars such as Millie Mackintosh, Louise Thompson and Megan McKenna.

In our previous article [link], we looked at the requirements of the ASA for identifying an ad as an ad.  Content will constitute an ad under the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code) where there is both payment for the content and editorial control by the agency/brand over the content.

Consumer protection legislation which is enforced by the CMA, goes even further than the CAP Code.  Even where content does not constitute an ad due to the lack of editorial control, consumer protection legislation requires paid for endorsements to be clearly identifiable as such.  Following its investigation, the CMA has now issued its own guidance to influencers [link] marketing teams and brands which is in addition to the guidance issued in September 2018 in conjunction with the ASA [link].

The key points in the CMA Guidance are as follows:

  • Any “payment” must be disclosed in the post. Payment need not be monetary and other rewards and incentives such as a freebie or loan of a product need to be disclosed;
  • An influencer must make any relationship with a brand clear in the post, this includes previous relationships with a brand within the last year;
  • Posts must not be misleading. If it is not apparent that a post is a promotion, a consumer may be misled into believing that there is no commercial relationship between the influencer and the brand.
  • If an influencer has not actually tried the product or service, this should be made clear.
  • Any disclosure should be made upfront within the post. A consumer should not have to hunt around for further information to work out whether it is a promotion or not.

Whilst the CMA recognises that there may be different ways to be transparent about a commercial relationship which will vary depending upon the payment, reward or incentive given and the social media platform on which the post appears, the CMA sets out a number of terms that it states would be appropriate messaging including:

  • ‘Advertisement Feature’ or ‘Advertisement Promotion’
  • #Ad or #Advert

On the converse, the CMA also sets out a number of practices that they don’t think go far enough including:

  • #sp or #spon
  • ‘Thanks to [brand]’ or ‘in collaboration with [brand]’
  • adding #ad directly after the brand name
  • hiding #ad amongst other text and/or hashtags.

This is not a case of one size fits all and brands and influencers must consider the nature of the relationship, the type of “payment” being made and the platform on which the post is being made.

The CMA Guidance provides some useful advice around transparency but whether in practice it is followed remains to be seen.  With influencers hungry for followers and fame and brands wanting to leverage the most out of an influencer’s power with minimal disruption to the user experience, there is undoubtedly a tension when it comes to transparency as required by the law.

The CMA Guidance is not prescriptive so it does not cover every scenario. This is therefore not an easy area to navigate. Any brand looking to use influencers must ensure that they have the right protections built into their agreement to ensure that the influencer acts on the right side of the law. Due diligence on influencers is also important as there are reputational issues at stake for those who get it wrong.

For more advice on the relevant laws that apply to influencers, the disclosures that need to be made and influencer agreements, contact Sarah Williamson, Media and Advertising Partner at Ashfords LLP on +44 (0) 20 7544 244 or s.williamson@ashfords.co.uk

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