The Competition and Markets Authority (CMA) has launched an investigation into concerns that social media stars are not properly declaring when they have been paid, or otherwise rewarded, to endorse goods or services.
Typically, celebrities and influencers have millions of followers who watch their channels to see where they go on holiday, what they wear, which products they use, the books they read and more.
Online endorsements from celebrities and influencers can help brands reach target audiences and boost sales. Where influencers are paid or rewarded to promote, review or talk about a product in their social media feeds, consumer protection law requires that this must be made clear.
If they do not label their posts properly, fans or followers may be led to believe that an endorsement represents the star’s own view, rather than a paid-for promotion.
They are then more likely to place trust in that product, as they think it has been recommended by someone they admire. They might not do so, however, if it was made clear that the brands featured have paid, or in some other way rewarded, the celebrity in return for endorsement.
As part of its investigation, the CMA has written to a range of celebrities and social media influencers to gather more information about their posts and the nature of the business agreements they have in place with brands.
The CMA investigation is considering the extent to which influencers are clearly and accurately identifying any commercial relationships, and whether people are being misled.
The CMA has seen examples of posts which appear to:
- promote or endorse products without clearly stating if the post has been paid for
- offer the celebrity’s personal opinion on the benefit of a product without clearly disclosing if they are being paid by the brand
George Lusty, the CMA’s Senior Director for Consumer Protection, said:
Social media stars can have a big influence on what their followers do and buy.
If people see clothes, cosmetics, a car, or a holiday being plugged by someone they admire, they might be swayed into buying it.
So, it’s really important they are clearly told whether a celebrity is promoting a product because they have bought it themselves, or because they have been paid or thanked in some way by the brand.
If the CMA finds practices that break consumer protection law, it can take enforcement action.
As part of the investigation the CMA is asking the public to share their experiences. The investigation would particularly benefit from hearing from people who have bought products which were endorsed on social media.
Notes to editors
This investigation follows the CMA’s earlier work from 2016 considering online reviews and endorsements. As part of that work, the CMA accepted undertakings from four companies to ensure that online advertising is clearly labelled or otherwise identified so that it is distinguishable from the opinions of bloggers or journalists. The CMA expects to provide an update on the latest investigation at the end of 2018.
The key piece of consumer protection legislation relevant to the CMA’s investigation is the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). Amongst other requirements it is a banned practice to use editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable to the consumer.
As an enforcer under Part 8 of the Enterprise Act 2002, the CMA can enforce the above legislation through the courts. Ultimately, only a court can decide whether a particular term or practice infringes the law.
The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law.
The CMA is working closely with the Advertising Standards Authority (ASA) in this area. The ASA is the UK’s independent regulator of advertising across all media. In March 2018 the ASA issued a call for evidence to find out more about what types of labels help people to understand when the online content they see, hear and interact with is advertising.
Media enquiries should be directed to email@example.com or 020 3738 6460.
For CMA updates, follow us on Twitter, Facebook and LinkedIn.