Policing misleading adverts by influencers

Commissioned by the Competition and Consumer Protection Commission (CCPC), the report – Online Behaviour; Influencer Marketing – examined Irish consumer engagement with social media platforms and influencers. The research showed that influencer behaviour has a dramatic effect on consumer purchasing. For example, of the consumers that follow influencers, 60% said they recommended a product to a family or friend as a result of an influencer mentioning it and, nearly 24% of consumers who purchased a product as a result of an influencer promoting it said they subsequently felt misled about their purchase.

The report is a must-read for companies selling in Ireland. Specifically, when brands contract with influencers for advertising services, they have a legal responsibility to ensure that the influencers’ content does not fall foul of misleading advertising laws.

While the focus of the CCPC report is primarily on the Irish regulatory regime, its findings are important for any brand selling within the European Union, given that the law on misleading advertising across the EU is harmonised to a large degree, through the implementation of the Unfair Commercial Practices Directive (2005/29/EC) (UCPD) as updated by the Omnibus Directive (Directive (EU) 2019/2161).

Key Findings for Brands

While the complete report is available here, some of the essential findings include:

Be vigilant and police misleading content -- Brands have a legal responsibility to ensure that paid social media content generated by contracted influencers complies with the law, including ensuring that it is not misleading. This sounds straightforward, but the CCPC’s research explains that consumers often overestimate their ability to identify paid-for commercial content in social media feeds. It was also noted that a significant portion of the posts with commercial content were either not labelled as such, or insufficiently labelled considering the requirements of the Irish laws implementing the UCPD. Brands should ensure that their contracts contain prescriptive provisions, reducing the likelihood of influencers triggering issues in an area that is increasingly the focus of regulator attention.

Take account of branded content policies on social media platforms -- The report flags that the CCPC will monitor “branded content” policies of social media platforms. A focus of the CCPC will be ensuring that these policies contain sufficient disclosure requirements in line with consumer protection legislation, and that they are enforced by platforms. Brands should take into account the provisions of “branded content” policies of social media platforms when drafting influencer contracts and content approval policies, to ensure their content does not breach the terms and to avoid the takedown of their content.

Monitor for new Regulator Guidance -- The CCPC has stated that it will join with the Irish self-regulatory organisation, the Advertising Standards Authority for Ireland, (ASAI) to deliver new guidance in areas such as labelling, own brand products and reposts. Brands must be vigilant and monitor for guidance issuing from the CCPC and other relevant regulatory authorities. Contracts should be drafted to reflect new guidance when it issues. The CCPC previously collaborated in 2021 on a jointly hosted webinar to raise awareness about the need for compliance with the relevant laws and codes when publishing promotional content on social media feeds.

Take Note of Self-Regulatory Organisations’ (SRO) Guidance -- The report also highlights the need for traders to take into account guidance issued by SROs. The report cites guidance issued by the European Commission on the UCPD[1] which recognises the role of SROs in developing codes of conduct and enforcing standards under the UCPD. The UCPD Guidance states that these self-regulatory codes of practice can create another means for enforcement through the SROs and can also inform “national authorities and courts in assessing whether a commercial practice is unfair”. The ASAI has previously issued a series of guidance notes dealing with influencer marketing and advertising communications on social media.

Key Takeaway

Sophisticated brands will view the CCPC report against the backdrop of increasing focus on the issues associated with strengthened content and consumer protection laws across the European Economic Area, including in the area of influencer contracts.

[1] Guidance on the interpretation and application of Directive 2005/29/EC of the European Parliament and of the Council concerning unfair business-to-consumer commercial practices in the internal market, 2021/C 526/01, available at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52021XC1229%2805%29