Expert Lawyer Says Investigation Is Part Of Wider Crackdown By Regulators

The Competition and Markets Authority (CMA) has today announced it is to examine concerns that social media stars are not properly declaring when they have been rewarded to endorse goods or services.

As part of its investigation, the CMA has written to a range of celebrities and social media influencers to gather more information about their posts and the nature of the business agreements they have in place with brands.

The watchdog is concerned that if celebrities and social media influencers fail to label their posts properly, fans or followers may be led to believe that an endorsement represents their own view.
Consumer protection regulations state that anyone should make it clear in editorial content at first sight if they have been paid or rewarded in some way.

If the CMA finds practices that break consumer protection law, it can take enforcement action.

The CMA says it has seen examples of posts which appear to:

- Promote or endorse products without clearly stating if the post has been paid for 

- Offer the celebrity’s personal opinion on the benefit of a product without clearly disclosing if they are being paid by the brand

George Lusty, the CMA’s Senior Director for Consumer Protection, said: “Social media stars can have a big influence on what their followers do and buy.

“If people see clothes, cosmetics, a car, or a holiday being plugged by someone they admire, they might be swayed into buying it. So, it’s really important they are clearly told whether a celebrity is promoting a product because they have bought it themselves, or because they have been paid or thanked in some way by the brand.” 

Expert Opinion

“Using a high profile person to talk about a product can be a very powerful way for a brand to appeal to certain audiences.

“We regularly advise influencers and brands on such endorsement deals and are seeing an ever-growing crackdown by regulators on those who do not make it clear to viewers that what they are watching is in fact an advert, not the influencer’s unbiased opinion.“

“Using words like “sponsored”, “supported by X” or “funded by X” are insufficient and it is the influencer’s responsibility to ensure that regulations are complied with. Consequences for non-compliance can include the content being taken down and an influencer’s reputation can be badly damaged if they are seen to be ignoring rules designed to protect the public. Ultimately, if an influencer persistently breaks the regulations, they can be referred to other bodies for further action, such as Trading Standards and the highest sanctions available to Trading Standards include unlimited fines and prison sentences up to two years.”
Aurelia Butler-Ball - Partner

Irwin Mitchell recently published a special edition of its UK Powerhouse report which analysed the Consumer Economy. The report highlights challenges that businesses are facing in the sector and includes a range of legal issues and solutions that should be considered at board level. The report can be downloaded here.