How UK watchdog protects consumers from poor influencer marketing

The Competition and Markets Authority's legal director explains how the regulator protects consumers from influencer marketing that flouts the law.

Influencers and their sponsoring brands are getting better at effectively disclosing brand tie-ins. Influencer marketing platform, Buzzoole, found the number of sponsored posts published to Instagram in 2018 was 2,621,741 vs 1,516,349 in 2017. This represents a 42% increase.

Klear, a software provider, ran a similar report. It concluded with parallel results. The firm’s State of Influencer Marketing 2019 Report found a 39% uplift in sponsored posts published to Instagram in the 12 months to 31 December 2018.

These figures mark a positive direction for our industry. There is more to do, though.

RELATED: Helping influencer marketers be clear when posts are ads

In the UK there is a common misunderstanding that new influencer marketing laws have been introduced. There have not. There are, however, new guidelines describing how to abide by existing laws. There, too, is heightened activity by both the Advertising Standards Authority (ASA) and the Competition and Markets Authority (CMA) in enforcing those laws.

I approached the CMA to get a better understanding of what this UK regulator is doing to protect consumers from influencer marketing that flouts the law. I wanted to know how far its jurisdiction reaches globally. Where the differences lie between what the CMA's role and that of the ASA. And who is ultimately responsible for ensuring a social media post complies with regulation - is it the brand, the media agency or the influencer? 

Jason Freeman responded to my questions. Jason is director, consumer law at the CMA where he manages a team of lawyers who advise on consumer legal issues across a range of CMA projects. Jason established, and was first chair of, the EU E-Enforcement Expert Group. He maintains an interest in the law related to internet investigations. I have reproduced the transcript from our exchange here:

[SG] In terms of influencer marketing, where do the auspices of the Advertising Standards Authority stop and the Competition and Markets Authority start? is there an overlap?

[JF] We work closely with the Advertising Standards Authority (ASA), but our roles and remit are different. The ASA focusses on adverts, where the brand controls the outcome, whereas the consumer protection law we enforce doesn’t distinguish between an advert and an editorial review – where the influencer has taken payment but created the content independently.

Therefore many influencer marketing posts on social media might not be considered ‘adverts’ by the ASA and subject to its Codes, but still need to comply with consumer protection law.

[SG] Are there any differences in approach towards influencer marketing between the ASA and the CMA?

[JF] At the CMA, we are interested in how markets work as a whole, and can prioritise action to protect consumers, for example against practices that may mislead large numbers of people.

The ASA is the UK’s independent advertising regulator. They respond to complaints from consumers and businesses and take action to ban ads across UK media which are misleading, harmful, offensive or irresponsible, in breach of the Codes written by their sister organisation the Committees of Advertising Practice (CAP). We published a joint guide with the ASA and CAP, which gives more information about our roles and further practical advice for influencers when using social media.

The CMA is not able to comment on specific posts or give influencers advice – if influencers have queries about how consumer protection law relates to their specific circumstances or posts, they should seek independent legal advice. For adverts only, CAP’s Copy Advice team can offer free, bespoke advice.

[SG] Social media is by nature borderless. How can UK regulators have an impact internationally? Can you explain the CMA's work with ICPEN and the FTC?

[JF] The CMA has power to enforce a wide range of laws to protect UK consumers. We can take enforcement action against influencers based outside the UK if their activities are directed towards consumers in the UK.

When determining whether activities are directed towards consumers in the UK, the sorts of factors we would take into account include, but are not restricted to whether:

• the recommended products are available to people in the UK; 
• any links or codes on the recommendation post relate to UK facing sites/other accounts;
• the influencer engages with people in the UK in some way. 

It is a question of fact and degree and we aim to ensure people in the UK are not misled.

We can also request our enforcement counterparts in the EU/EEA to obtain evidence and enforce on our behalf against traders based in their jurisdiction.

We also co-operate with enforcers outside the EU. For example, we have a Memorandum of Understanding with the US Federal Trade Commission (FTC) which enables us to co-operate closely with them where we have a common interest in tackling a problem. Both we and the FTC have a strong interest in tackling misleading online reviews.

Another means by which we work internationally is through the International Consumer Protection and Enforcement Network (ICPEN). ICPEN is an informal network of around 65 consumer protection authorities from around the world whose mission is protecting consumers. The CMA works closely with our ICPEN colleagues, by sharing information, intelligence and best practice, and by collaborating on projects identified as priorities for the network.

Online Reviews and Endorsements, including social media influencers, is one such area of shared interest. ICPEN members produced guidelines for Digital Influencers, part of a package of ICPEN guidance to improve standards for Online Reviews and Endorsements globally: https://www.icpen.org/news/741. These guidelines describe the standard that all ICPEN enforcers would expect digital influencers to adhere to.

[SG] Influencer fraud involves the purchase of social media followers and /or engagement and/ or collusion with others in an attempt to appear more popular or exert influence online. When social media influencers buy followers, buy retweets/likes/favourites etc or buy comments then provide sponsored content for organisations they are passing themselves off as having more online authority than they really possess. This is misleading both for brands and for users of social media platforms … in other words, they’re misleading us, the consumer. Does this area fall within the CMA remit?

[JF] The CMA remains interested in issues concerning online reviews and endorsements and we would be interested in hearing more about fake influencers.  We would expect brands to carry out checks of the influencers they choose to use for their advertising campaigns. We are interested in looking at misleading practices affecting consumers or businesses in this area and have the power to bring civil or criminal proceedings under the Business Protection Regulations, as well as the Consumer Protection Regulations, if we consider it appropriate to do so.

[SG] So far the onus has been placed upon the influencer to comply with CMA regulations rather than the brand (notably the 16 signatures from high-profile influencers announced on 23 January). How culpable are brands and their communications’ agencies when an influencer fails to comply with regulations in a paid-for sponsorship?

[JF] Everyone that has been involved in the publication of a post is responsible, from the brand through any agencies and advisors, to the influencer themselves. Brands and marketing companies have to ensure that influencers endorsing their products make the right disclosures.

We did work previously in 2016 which focussed on marketing companies, businesses who used the services of marketing companies, publishers of online articles/blogs and certain individuals. This time we focussed on the influencers posting the endorsements but we have made clear that all players in the supply chain must not mislead consumers. This is why we have published guidance aimed at those who work with influencers as well as the influencers themselves. We have been working with key partners to spread the messages to brands and agencies.

[SG] We've seen the CMA place its efforts on influencers who fail to effectively disclose sponsorship content details. What is the next influencer marketing area the CMA is to tackle? Where does the CMA stand on image manipulation within content i.e. in before and after beauty treatments or even CGI/virtual influencers?

[JF] The CMA routinely monitors practices in online and digital markets. We will now be turning our attention to the role that the platforms may play.

Should we find evidence of other misleading practices which breach consumer law we could take action in accordance with our prioritisation principles. Certainly manipulation of images to give a misleading impression of the results a product achieved could fall foul of consumer law.