Social Media Endorsements

The CMA is investigating the disclosure of paid for endorsements on social media platforms.

From:
Competition and Markets Authority
Published
16 August 2018
Last updated
3 November 2022 — See all updates
Case type:
Consumer enforcement
Case state:
Open
Market sector:
Communications
Opened:
8 August 2018

Update on enforcement action

3 November 2022: The Competition and Markets Authority (CMA) has published guidance for social media platforms, brands, and content creators to follow so that people can easily spot a paid-for online endorsement.

The CMA has published compliance principles to help social media platforms prevent and tackle hidden advertising appearing on their sites. The principles represent what the CMA considers platforms should be doing to comply with consumer protection law and requires platforms to be proactive in tackling hidden advertising.

The content creators and social media endorsements guidance has updated advice on how to label commercial content to comply with consumer protection law. The guidance covers issues such as disclosing gifts, own-brand relationships and the importance of upfront, prominent disclosures when posting reels, stories or other video content. It builds on and provides further detail to the requirements of the undertakings given by 16 influencers in 2019. The CMA monitors compliance with undertakings given to it.

Brands which use content creators to advertise their products also have a responsibility to be transparent with people and make sure that advertising on social media platforms is properly labelled. The business responsibility and social media endorsements guidance sets out the CMA’s views on how brands can comply with consumer protection law, and the steps brands should take to reduce the risk of hidden advertising, including:

  • ensuring content creators understand their legal obligations before posting as a result of being sent a gift, or entering into an agreement to publish content-based advertising

  • checking that published content is properly identified as advertising, and if not, taking steps to rectify the content to accurately reflect the commercial relationship

The CMA works closely with both Ofcom and the Advertising Standards Authority (ASA) to tackle hidden advertising on social media platforms. Regulatory roles in tackling hidden advertising is a guide to assist everyone involved in online advertising understand each regulator’s respective roles and responsibilities.

The CMA’s publications:

Undertakings from Facebook Ireland Limited

16 October 2020: Facebook Ireland Limited (Facebook) has committed to the CMA that it will do more to prevent hidden advertising being posted on its Instagram platform. The CMA has been investigating Instagram due to concerns that 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 the end of this year, 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.

Instagram will also make it easier for businesses to increase their own compliance with UK law by enabling them to detect posts which promote them or their products so that they can check lawful disclosures have been made.

Moreover, 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.

The CMA will continue investigating the practices of other social media platforms to ensure that changes are made where necessary.

Undertakings

23 January 2019: 16 influencers have provided undertakings to improve disclosures in their social media posts to make it clear when they have been paid or otherwise incentivised to endorse a product or service. The term ‘influencer’ refers to bloggers, vloggers, celebrities and social media personalities. A summary of the undertakings can be found below.

The CMA opened its investigation into concerns that certain influencers were not clearly disclosing when they had been paid or incentivised to promote goods or services.

The CMA has also published a compliance summary for influencers to ensure that they are aware of consumer protection law. This guide is also relevant to brands, marketing agents, intermediaries and all involved in the supply chain.

Results from a CMA questionnaire found that social media endorsements influence people’s buying decisions – people often look to social media channels for opinions and reviews on products and services before making a purchase.

Audiences need to know when an influencer has been paid, incentivised or in any way rewarded to endorse, promote, or review a product or service, including whether a product or service was given or loaned to them for free.

The CMA is now considering the role that platforms may play.

Case Opening

16 August 2018: The CMA has launched a consumer enforcement investigation into concerns that social media stars may not be declaring when they have been paid, or rewarded, to endorse goods or services.

Where celebrities and other social media influencers are paid or otherwise rewarded to promote, review or talk about a product, service or experience in their posts, consumer law requires that this must be made clear to people.

The CMA’s investigation is considering the extent to which celebrities and influencers are clearly and accurately identifying any commercial relationships with brands featured in their posts, and whether people may be being misled.

The investigation is being carried out under Part 8 of the Enterprise Act 2002 in respect of potential breaches of the Consumer Protection from Unfair Trading Regulations 2008.

We expect to provide an update by the end of 2018.

Contacts

People can tell the CMA about their experiences by email to sme@cma.gov.uk.

Information provided will assist the CMA’s understanding of reviews and endorsements on social media platforms. Please note that the CMA will not intervene in individual disputes and cannot enter into correspondence with you.

Project Director, Pauline Keane (pauline.keane@cma.gov.uk)

Principle Case Officer, Cris Sowden (cris.sowden@cma.gov.uk)

Senior Responsible Officer, George Lusty (george.lusty@cma.gov.uk)

Published 16 August 2018
Last updated 3 November 2022 + show all updates

  1. Update on enforcement action, including guides for platforms, businesses and influencers and the regulatory roles for regulators.

  2. Undertakings from Facebook Ireland Limited published.

  3. Page updated to reflect that the CMA will publish the outcomes of its investigation into social media endorsements on Wednesday 23 January 2019.

  4. First published.

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