The Rise of the Influencer: Consumer Protection and #Sponsored Content
Are you an influencer? Do you earn money or other benefits by creating content on social media?
Influencers that are offered deals to advertise a brand’s products over social media platforms will qualify as traders and should thus disclose their adverts in a transparent manner. Over the coming weeks, the European Commission will be screening online posts to identify any sponsored posts uploaded to social media by influencers which could mislead consumers.
This article will briefly consider your obligations, as an influencer, on the digital market.
The rise of social media has given brand owners the ability to push their products to market by assimilating their goods with the face of someone famous – the influencer. Despite the lack of a legal definition of what an influencer is, one can infer that an influencer is a person capable of influencing the public with their lifestyle options. Influencers are viewed as the perfect source of what products to use and purchase; their power to influence consumer behaviour makes them invaluable to brand owners.
What is construed as problematic, however, is the way influencers market products.
Advertisements are marketing tools used by traders to primarily address consumers. The Consumer Affairs Act (the ‘Act’) defines a trader as any person, whether natural or legal, who acts for purposes relating to his trade, business or profession.(1) Under the Unfair Commercial Practices Directive (the ‘UCPD’), this definition also encompasses anyone acting in the name of or on behalf of a trader.(2) The extension of the definition of a trader to anyone acting on the trader’s behalf would include influencers.
The aim of the UCPD and the Act is to protect consumers from the consequences of unfair commercial practices and to address such commercial practices that directly relate to influencing consumers’ transactional decisions. Since consumers are considered to be at a weaker position than traders, certain safeguards come into play to ensure that consumers are not prejudiced when choosing to make a sale. Both the Act and the UCPD prohibit traders from creating a false impression of the nature of the products they are selling, and from exploiting their position of power in relation to consumers in such a way as to significantly limiting the consumers’ ability to make an informed purchase.(3)
The UCPD and the Act list two forms of misleading commercial practices. The first concerns misleading actions. Such commercial practices will be regarded as misleading if they contain false information, rendering such practices untruthful, and which are likely to cause consumers to make a transactional decision they would have otherwise not made. In terms of the UCPD, influencers must clearly demonstrate any commercial motives behind posts they upload when referring to certain products in their posts. This would include clearly demonstrating that the post has been sponsored. The second form of misleading commercial practices deals with misleading omissions, whereby traders omit to include material information that the average consumer would need to be able to make an informed decision when purchasing something. Therefore, if an influencer fails to identify the commercial intent behind a post uploaded, that will constitute a misleading omission – consumers should not be deceived by hidden adverts.
Additionally, influencers are to also ensure that consumers are not harmed by the products advertised in their social media posts. In terms of the Product Safety Act,(4) only safe products are to be placed on the market and, in addition to that, various product-specific legislation has been enacted – such as the Cosmetics Regulation(5) – that establish rules that products placed on the market must comply with. To make sure that the products advertised are safe, influencers can browse the European Union’s Safety Gate for information about products that could pose a risk to the safety of its consumers.
The legal responsibility to disclose that a post on social media is sponsored thus falls within the hands of the influencer publishing it.
Over the course of the next few weeks, the European Commission will be filtering through online posts to identify any posts uploaded to social media which could mislead consumers.(6) In the light of this, the European Commission has developed the Influencer Legal Hub – this space contains a number of video trainings, legal briefs, and other resources to assist influencers with becoming familiar with European consumer protection standards. Influencers should check this Hub out to ensure that their sponsored content is in line with consumer protection rules.
- Consumer Affairs Act, Chapter 378 of the laws of Malta, article 2
- Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council, article 2
- ibid., article 2(j)
- Product Safety Act, Chapter 427 of the laws of Malta
- Regulation (EC) No 1223/2009 of the European Parliament and of the Council of 30 November 2009 on cosmetic products (recast)
This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr Annalies Muscat and Dr Laura Spiteri
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