On 16 August 2018, the UK's Competition and Markets Authority (CMA) – the government body responsible for monitoring and preventing anti-competitive activities – announced that it was investigating social media influencers (Influencers) that were not disclosing whether they have been paid to endorse goods. The CMA announced that it has written to Influencers, including celebrities, regarding the nature of their relationship to the brands they are endorsing. This is similar to action taken by the United States' Federal Trade Commission in 2017 wherein the FTC announced that it sent warning letters to Influencers regarding their social media posts and sent letters to brand owners and Influencers to educate them about their use of social media, specifically, Instagram to promote goods and services. The FTC followed up by sending some of these same recipients warning letters in which they were specifically asked to respond in writing whether they have material connections with the brands that they are endorsing and what actions they will take to ensure that all of their posts to social media clearly and conspicuously disclose their relationships, if any, with those brands.
In the UK, as in Canada and the US, social media personalities, bloggers, artists, and athletes have all been used as Influencers, posting photographs of themselves on social media using recognizable products and services. Many of these posts are actually endorsements for which the Influencer received something of value from the brand owner, but this is not something that has always been made clear to the Influencer's followers.
In the UK, the consumer protection legislation relevant to the current investigation is the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and the CMA works closely with the Advertising Standards Authority (ASA) the independent advertising regulator of advertising in any media. The ASA has previously issued guidance stating that Influencer posts should be clearly labelled with "#ad" or the equivalent, and made a number of rulings against Influencer posts which were misleading as they did not make it clear that they were marketing communications.
Canada has likewise been active very recently in the Influencer area. Canada's Competition Bureau is the relevant law enforcement agency and its focus is on compliance with the Competition Act. It works with a self-regulating advertising industry group, Ad Standards. The Bureau has published an Influencers' Checklist that recommends that disclosures be inseparable from content when shared and that ambiguous references and abbreviations be avoided such as "#SP" or "#SPON." On 9 August 2018, the Ad Standards' Influencer Marketing Steering Committee updated its Disclosure Guidelines with specific examples similar to the FTC's guidance document, The FTC Endorsement Guides: What People are Asking. In addition to disclosures by Influencers, the Bureau is heavily focused on pursuing consumer reviews and testimonials that are not genuine or where material connections have not been disclosed.
If you have any questions about how this may impact your company's use of Influencers as well as making proper disclosures and having appropriate language in your company's social media policy, please contact your Baker McKenzie attorney or any of the contacts below.