Instagram cracks down on influencer disclosure

Instagram has today committed to the Competition and Markets Authority (CMA) that it will do more to prevent hidden advertising being posted on its platform. 

The CMA - the UK government watchdog charged with protecting the consumer - has been investigating Instagram due to concerns it was not doing enough under UK consumer protection law to prevent its users from endorsing businesses without making it clear that they had been paid or given free gifts to do so.

Hidden advertising is illegal in the UK. By January 2021, anyone attempting to endorse a business on Instagram will be prompted to confirm before posting if it appears they have been offered an incentive. If they have, they will not be able to publish their post until they have included a clear disclosure.

Instagram will also be implementing technology designed to help it identify posts containing adverts that have not been clearly and prominently disclosed. 

By next summer, Instagram will report users posting suspected unlabelled content to the businesses whose products they are endorsing. Those businesses will then be able to take appropriate action swiftly, including asking Instagram to remove posts. Those businesses and influencers who fail to comply with CMA rules will be subject to penalties. 

RELATED: Cash not compliance driving Instagram policy

To date, the onus has been placed upon the influencer to comply with CMA regulations rather than the brand. However, everyone that has been involved in the publication of a sponsored social media post is responsible for it complying with requisite rules and regulations. This is true 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.

Commercial benefits to Instagram from compliance

There is an unmentioned commercial benefit to Instagram in this new arrangement too. 

The move will afford the Facebook-owned platform the opportunity to promote its branded content services to businesses. When reporting users posting suspected unlabelled content to the businesses whose products they are endorsing Instagram will be able to suggest the businesses amplify content through the paid-for service.

Branded content on Instagram began being rolled in December 2019. 

Action by regulators improves clarity

"Action by the UK regulators, whether it’s the ASA or the CMA, is usually helpful for the influencer industry as a whole because it sets a precedent on standards and improves clarity of the rules" says Rupa Shah, founder of Hashtag Ad Consulting - an advisory firm providing advertising regulation guidance and training for social media influencers, social and digital agencies and brands. 

"Because large platforms like Instagram have so much power over how, or even whether, a content creator discloses a paid partnership via the tools that they offer, it’s so important that they are in-tune with regulatory requirements and it’s reassuring to see that Instagram are taking concrete steps to improve the process for clear disclosure and for identifying non-disclosure", continues Ms Shah.  

Regulators change tack

However, given that both the CMA and the ASA have suggested in the past that using the paid partnership tool is not a sufficiently clear disclosure on its own, this focus on improving access to that very tool is somewhat confusing and is potentially a lost opportunity for the CMA who, presumably, could have demanded that AD or #AD (the recommended labels) be added to the paid partnership label. "That surely would have been the neatest solution for brands and content creators alike" says Ms Shah.

In September 2019 ASA revealed findings from research it had conducted to see whether or not people understand when a social media 'influencer' is advertising to them.

The advertising self-regulator used various social posts where some were ads, and others weren't, as well as investigating what labels - such as #ad - the public recognises.

The key finding in the ASA research was that ads should be disclosed and clearly labelled - with 'ad' or '#ad' used at a minimum.

Some question whether the move has been properly thought through. Mark Dandy, founder and CEO at Captivate Influence says:

“Obviously with Instagram being the main revenue earner for a lot of influencers, they don't want to flout their policies and ranked down by algorithms. The [Instagram messaging] comes across quite threatening. If influencers constantly see this they will think they’re in trouble.”

Mr Dandy sees the pendulum potentially swinging too far away from protecting consumers against hidden advertising with this initiative towards scaring off genuine advocates from sharing the products they love online. “Influencers will undoubtedly start tagging everything under the sun - and captions will start to include lines such as: ‘I bought this with my own money but tagged it as Instagram told me to."

Mr Dandy believes an unintended consequence of Instagram’s changes will mean the death of organic promotion of products influencers love to share.

Instagram has committed to the CMA that it will revise and make clearer its policies governing the publication of incentivised endorsements and, importantly, uphold its Terms of Use which include the deletion of posts or termination of user accounts that are found to have breached these policies.

You can read the full undertakings from Facebook Ireland Limited to the Competitions and Markets Authority here.