The global phenomenon of influencer marketing and advertising has experienced rapid growth in recent years, making it one of the most popular and effective forms of online advertising. However, this burgeoning industry brings with it potential risks for consumers and various challenges for regulators.
This blog post will discuss some outcomes deriving from the interlacing of influencer marketing and legal implications.
State the relationship with the Brand in sponsored posts
Influencer marketing is a way for brands to connect with their audience through a third party. In this case, that third party is an influencer with a social media following who uses their influence to promote brands and products.
The goal of influencer marketing is to build trust, credibility, and awareness around your brand - all things that helps growing your business in the long term.
You should clearly state if you have a relationship with the brand(s) mentioned in a post. This is important for your followers as well, who need to understand whether what they're seeing is an ad or an organic post by the influencer.
The requirements for identifiable advertising apply to all influencer marketing regardless of how it is carried out. The presence of a commercial collaboration must be indicated in the post or video.
Guidelines on influencer marketing in the EU
In most countries, influencer marketing is already regulated by national laws such as consumer protection and marketing laws. These laws usually have a broad reach which means that they also cover influencer marketing.
Many countries have also come up with guidelines on this topic. One example is Sweden, where it's mandatory for sponsored or affiliated content to clearly state that it's an advertisement; otherwise, it could be considered misleading advertising and could lead to legal consequences.
In France, a draft bill aiming to fight against scams and abuses by influencers on social networks was adopted by the French National Assembly on 30 March 2023. The objective of the bill is to establish a regulatory framework for influencer marketing and to address unlawful commercial activities on the web.
Work on this is also underway on a global level. Among other things, The European Union published a study in February 2022 on the topic which may give some interesting insights to both individual and public actors when interpreting and applying national laws and regulations. The study suggests that to properly regulate influencers' activities, a balance must be struck between enabling the Single Market for both commercial activities and online social interaction, as well as protecting consumer interests. Among many topics discussed in the study, they mention that ****failure to disclose the commercial intent of a trader may be qualified as a misleading omission according to the Unfair Commercial Practices Directive (Directive 2005/29/EC). It can be concluded based on the European Commission Guidance on the interpretation and application of the UCPD released on 29 December 2021, that any digital creator who frequently carries out promotional activities towards followers or non-followers on social media platforms is likely to qualify as a trader, regardless of the size of their following.
Considering influencers can reach consumers globally, examining legal implications in various countries is interesting. Authorities are increasingly providing interesting data on the topic. The European Consumer Center France offers a list of influencers' obligations and responsibilities in Europe, providing interesting insights into certain EU countries.
Violating the rules can lead to penalties, fines, and legal fees.
In the last years, problems surrounding hidden marketing in social media have been put to light. The main idea is that there should be a dividing line between marketing and personal opinion. Influencer marketing can be a powerful tool. It is not uncommon that the influencers’ communities build a real connection with the influencer which in it its turn makes them more inclined to buy products recommended by an influencer. The followers should be aware of when an influencer is marketing a product or is giving a personal opinion. Influencers who violate applicable marketing rules can be fined.
It happens that posts on social media lack an explicit mention of advertising or it is not sufficiently clear and prominent.
In addition, the influencer's reputation may be damaged as a result. This is especially the case if the product that was recommended is not holding its promises, In that case, their community feels that they have been taken advantage of.
Influencers must be transparent in their relationship with all brands that they promote, as well as with their audience. It’s important to disclose any potential conflicts of interest and avoid making misleading statements or claims. For example, if an influencer receives free products from a brand (or even pays for them) but doesn’t disclose this information on social media, it could lead to legal implications.
Social media is in constant change
As social media evolves and changes, it can be difficult to stay abreast of all the rules and regulations. For instance, Instagram Stories are only available for 24 hours before they are gone forever, making it harder for authorities to track influencer marketing that isn't in compliance with the relevant marketing laws. Furthermore, this could also lead to a decrease in trust among users and an overall loss of faith in the platform. It is therefore crucial for users to be aware of the rules and regulations associated with influencer marketing on social media platforms, to avoid potential legal repercussions.
Topics that are usually more strongly regulated within influencer marketing
It's important to note that there are topics that are usually more strongly regulated within influencer marketing. These include:
- Children and minors.
When companies and brands choose partners, marketing methods and products to be marketed, they should, among other things, consider the age of the influencer's target audience. If influencer marketing reaches minors on a wide scale and the content is interesting to them, it becomes extra important to give the influencer clear instructions.
- Alcohol, adult content, tobacco, cosmetic procedures, and gambling products.
National laws and regulations tend to be more restrictive when it comes to the marketing of alcohol, tobacco, cosmetic procedures, and gambling products tend to be more strict. For example, in France, the legislator is taking steps to regulate influencer marketing in certain sensitive domains. These include surgical procedures (including cosmetic procedures), financial products or services, and counterfeit goods.
Hard for digital creators entering the marketing segment to follow the rules sometimes
The access to guidelines, information, and tools related to influencer marketing is growing. This means that it is increasingly easy to navigate this space. However, micro-influencers and young influencers may find it hard to navigate in this space as everything is new and can be a bit overwhelming.
For example, digital creators entering the marketing scene for the first time may not know that they may have to state that they have received the products they are presenting for free. Brands and agencies can here have an important role to play where they can help with guiding the influencer. This is also positive for the brand as marketing that is not well managed may have a negative outcome for the brand.
Insights from our experts
Keep yourself updated with the latest news, insights and strategies about the finance side of the Creator Economy
A great read for those who want to get ready with either product seeding or paid collaborations within influencer marketing!Read more
Sergio recognised a huge business opportunity in micro-influencers when individuals solely sought collaborations with celebrities and big influencersRead more