Who: The Competition and Markets Authority (CMA)
Where: United Kingdom
When: 3 November 2022
Law stated as at: 12 December 2022
The CMA has published three separate guides for social media platforms, brands and influencers in relation to paid promotions online. The guidance aims to tackle hidden advertising on social media platforms by setting clear expectations of the roles of these key stakeholders, in order to support compliance with consumer protection law.
For social media platforms, the CMA has set out six “compliance principles” that outline the practical steps that platforms should be taking in order to comply with their legal responsibilities. The principles reflect a systemic and outcomes-focused approach, by inviting social media companies to be proactive in preventing hidden advertising on their platforms, including by: improving the information that they give content creators about what to label as a paid-for ad (for example, within the terms of service), providing users with easy to use tools to label commercial content and report suspected hidden advertising, actively enforcing the terms of service if a user is in breach, and using available technology and algorithms to identify and remove hidden ads if they are found.
From a brand perspective, the CMA guidance requires businesses to be aware of their responsibility to tackle hidden advertising, which includes making it clear to influencers about who they pay or send gifts and that influencers must label these posts in an obvious way (for example, by using a tag like #ad). The CMA expects businesses to take action where this doesn’t happen; for example, by asking influencers to remove infringing posts or amend paid-for posts to reflect accurately the commercial relationship
Businesses need to be aware that, when posts are shared as part of a wider campaign, both influencers and the brands can be held accountable for misleading customers.
The guidance for influencers highlights that they need to understand that people should be able to recognise online ads as commercial content, otherwise this could be deemed misleading and a breach of consumer protection law.
Paid-for endorsements should use clear labels like #Ad or #Advert. This includes when influencers are paid to post, when they receive gifts and when they post on behalf of a brand that they own or are already employed by. This supports the CMA and ASA’s existing “Influencers’ guide to making clear that ads are ads” published in February 2020. Influencers should also be aware that the ASA can take action to ban ads that are not properly labelled and impose further sanctions where an influencer still fails with comply with the rules.
Why this matters
This guidance was produced based on the CMA’s work with ASA and Ofcom, as well as social media companies and content creators. It highlights both a systemic and holistic regulatory approach to online advertising, where actors at every level of the chain are expected to take responsibility for tackling hidden advertising online and achieving compliance with consumer protection law.