Who: Competition and Markets Authority (“CMA”)
Where: United Kingdom
When: June 2015 – completion TBC
Law stated as at: 11 December 2015
Background:
The CMA is currently investigating practices that involve online advertorials posing as editorial, “opinion”-based articles and reviews.
The investigation follows a wider review by the CMA into the advertorial industry, where, the CMA reported that “…across the six broad sectors that we looked at we estimate that £23 billion a year of consumer spending is potentially influenced by online reviews.”
The CMA is focusing now on fake reviews, the failure to publish some negative reviews and businesses paying for unlabelled or inadequately labelled advertorial content.
According to the CMA, initial investigations have shown that “a number of large companies and media agencies” had published advertorials that were not presented as such in a clear manner.
The Law
The Consumer Protection from Unfair Trading Regulations 2008 include in a list of “always unfair” and hence banned practices, the following:
“Using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial).”
Also relevant could be this “always unfair” practice:
“Falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer“.
The ASA
The CMA is not the only regulator to take an interest in the subject of advertorials posing as editorials. The Advertising Standards Authority (“ASA”) has taken a number of advertisers to task over such misleading practices. Most notably, in November 2014, the ASA found that two popular Youtubers had promoted Oreo cookies without making it clear that they had been paid to do so.
The CAP Code requires adverts to be obviously identifiable as marketing communications. The Committee of Advertising Practice has since published two detailed help notes on “Recognising Marketing Communications” and “Video Bloggs”.
Why this matters:
The CMA has stated that more than half of all consumers in the UK use online reviews when deciding on purchases. This figure is constantly growing and in consequence advertorial content is becoming an increasingly important tool for marketing teams. The CMA and ASA are looking very closely at this area, so the risk of falling foul of the rules (or at least being caught) has never been greater.
Risk avoidance?
The immediacy of social media will often mean that reviewing and monitoring all content promoting a product or service is not possible. It is of the utmost importance that brand owners are able to show that marketing teams are aware of the rules around advertorial content and that there are processes in place internally and with external agencies, that ensure all advertorial content is promoted as such.
Conclusion of the investigation
The investigation is unlikely to be finalised before the middle of 2016, The CMA has stated that as a part of its next steps, it will:
“…follow up on concerns raised during the course of the investigation, in order to assess whether further action is necessary. If we find evidence of consumer law breaches, this may lead to further enforcement work by the CMA.”
