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Star Influencers Fail to #AD

Yesterday the Competition and Markets Authority (CMA) announced that it had secured formal commitments from 16 celebrities to ensure their gifted and paid-for posts will be clearly disclosed.

The 16 stars

Alexa Chung, Mario Falcone, Alexandra Felstead (‘Binky’ Felstead), Ellie Goulding, Holly Hagan, Rosie Huntington-Whiteley, Michelle Keegan and Rosia Promotions Limited, Iskra Lawrence, Camilla Mackintosh (‘Millie’ Mackintosh), Megan McKenna and M McKenna Limited, Chloe Sims, Zoe Sugg, Louise Thompson and Louise Thompson Associates Limited, Dina Torkia, Rita Ora, James Chapman and Jim Chapman Limited all agreed to change their social media practices.

CMA past involvement

It's not the first time the CMA has taken action against social media influencers for not disclosing correctly.

In 2015 the CMA wrote to 43 social media personalities that published sponsored content, to warn them that arranging or publishing advertising that is not clearly labelled may result in them breaching the law. That letter stated:

"Misleading readers or viewers falls foul of consumer protection law and could result in enforcement by either the CMA or Trading Standards Services, which may lead to civil and/or criminal action."

So it shouldn't come as a surprise that the CMA has stepped in again. Or, should it ...? After all, isn't that what the Advertising Standards Authority is here for?

In it's statement, the CMA says it is working closely with the ASA in this area. That would make sense as the ASA is the regulatory body for advertising.

Reasons for action

One obvious reason for why the CMA took action is because not all of the problematic posts are ads. And if it's not an ad, then it's outside of the ASA's remit.

For a social media post to cross the line into ad territory, there needs to be both payment (which includes gifts) and editorial control.

Because many brands do not seek to exert editorial control over their influencers' posts, those posts are not ads and the ASA cannot take any action against them.

They are, however, still subject to the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) which prohibit non-disclosure where it creates the impression that a trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer.

Another reason is the high number of celebrities involved. For the ASA to investigate each one individually, publish a ruling and secure assurances would take longer than this group-style action.

The ASA's sister body (CAP) can undertake similar wider industry projects but it would have been restricted in both the types of posts (ads only) and the sanctions it can issue.

The fact that a breach of the CPR's can potentially lead to large fines or even imprisonment would surely weigh more heavily on an influencer's mind than their name appearing on the ASA's website.

New Guidance

The CMA has also issued new guidance for social media influencers. The principles on transparency have not changed but there are a couple of key inclusions that are worth noting:

  • Past relationships: If an influencer no longer has a current relationship with a brand, they should continue to disclose the past relationship for a minimum of one year.

  • "Paid Partnership" tool: These features should not be relied on for disclosure. Additional disclosure statements must be included.

  • Tagging: tagging a brand or tagging a gift from a brand does not amount to clear disclosure

  • Discount codes: A discount code alone does not amount to clear disclosure

Next steps

The CMA action hit the headlines because it chose to pursue celebrities. But out of all the influencer categories, from nano right up to mega-celebrity, surely these were the ones most like to have access to accurate advice on disclosure?

Most, if not all, would have agents and would be working with larger brands with legal advice at their disposal.

It raises the question of whether most influencers truly understand their regulatory responsibilities and whether the teams that surround them, from agents, tech platforms, brands and media production companies, do have a duty of care to ensure influencers know and can apply the rules.

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