The Competition and Markets Authority (CMA) announced on Wednesday, 23 January, that it had secured "formal commitments" from 16 celebrities and influencers including Rita Ora, Millie Mackintosh, Jim Chapman and Louise Thompson that when endorsing products, they will make it clear if they have been paid or received any gifts or other benefit relating to those products. As part of this announcement, the CMA have also released their guide for social media endorsements which aims to encourage influencers to be more transparent with their followers and disclose commercial ties.

The CMA had previously teamed up with the ASA to produce the Influencer Guide. This new announcement and accompanying guide is the latest in a line of attempts aimed at encouraging influencers and brands to be more transparent.

A number of the celebrities and influencers who have given the CMA "formal commitments" are those who have been at the receiving end of negative ASA decisions. The CMA's announcement suggests an attempt to get big names on board in the hope that the carrot rather than the stick has a positive effect on the influencer industry more widely.

What does this mean for brands?

The CMA's new guide is targeted at influencers, marketing teams and brands. For responsible brands and influencers, this guide is unlikely to change much although it does help to clarify that certain types of disclosures don't go far enough.

The headlines from the guide are that influencers should:

  • disclose when they have been paid, given or loaned things;
  • be clear about their relationship with a brand or business, including any past relationship;
  • not be misleading and not suggest they have used a product they haven't, or that they have bought something that was in fact gifted.

The key tension between this guidance and the marketing industry is that the value of influencer marketing is that it does not look or feel like marketing at all. Brands want to exploit the ability to advertise in a more natural way but equally do not want to run the risk of finding themselves exposed as misleading potential customers or experience the potential associated reputational damage.

This latest announcement from the CMA is a clear indication that UK regulators are focusing on this area and that both influencers and brands will find themselves the subject of enforcement action if they do not take steps to comply with the law.

For brands, it will be important to engage with influencers and ensure they are making appropriate disclosures. While brands may not be uploading posts, they will nonetheless be at the receiving end of enforcement action as well as reputational damage as a result of their association with any influencer who fails to comply.

As a reminder, there needs to be both payment and control for the ASA to be able to investigate (as they did in the case of Daniel Wellington AB which contains a helpful overview of the ASA position). The CMA has a wider power to take action even where there is no control.

What disclosures need to be made to ensure ads are easily identifiable?

Importantly, the CMA guidance is not prescriptive but ultimately brands should adopt and enforce a consistent policy with influencers so that all ads of a certain type are labelled in the same way. Policies are not a guarantee of compliance (even if incorporated into a contract between the brand and influencer) but requiring influencers to label posts in the same way means that consumers are receiving a consistent message and therefore should be able to distinguish between paid-for advertising and personal opinion.

The CMA guidance acknowledges that there is unlikely to be one way of making this distinction but does give a list of approaches that do not make it clear enough that there is a commercial relationship, such as simply tagging a brand without additional disclosure or sharing discount codes without mentioning a business connection.

Responsible influencers should be doing this anyway but brands must take responsibility, and have and enforce a robust policy. The policy may need to take different situations into account for example, a brand ambassador may need to label their content differently to the recipient of a gift, but the central message is that anyone viewing an influencer post needs to know if the influencer has a commercial connection to a brand. Ultimately, this is about disclosure and transparency.

Key points for brands

  • Make sure your marketing teams are familiar with this new guidance. This is an area the CMA is interested in and we anticipate further enforcement action.
  • Amend your internal influencer policy (or create one if you don't have one already) to take this latest guidance into account.
  • Ensure your agreements with influencers have clear rules for posts to ensure that they operate within the guidelines.
  • Actively review influencer posts to ensure that they are acting in accordance with the terms of your agreement with them and the CMA guidance.

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