CMA investigates influencers

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I was mightily cheered to see that the Competition and Markets Authority (CMA) has just launched an investigation into influencer disclosure. As you may be aware, this has been a bugbear of mine for some time now, first and foremost because I believe that members of the public have the right to be treated honestly and openly, but also because when influencers don’t comply with the CAP Code it brings the promotions industry into disrepute.

I’m going to quote George Lusty, the CMA’s Senior Director for Consumer Protection, here, because he summed it up neatly when, announcing the initiative, he 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.”

Rather like the Federal Trade Commission in the States did in April 2017, the CMA has written to a range of celebrities and social media influencers, many of them apparently big household names. However, while the US body was apparently very forthright in its instructions to influencers, the CMA is initially seeking to gather more information about their posts and the nature of the business agreements they have with brands.

The CMA is going to be working closely with the ASA on this, because, as was announced earlier this year, the ASA is already looking into influencer marketing, but what’s very interesting about the CMA’s involvement in this issue is that if the CMA finds that consumer protection law has been broken, it can actually take enforcement action through the court system.

Essentially, while the ASA can issue a censure in the form of a ruling in which it can uphold a complaint about an influencer and a brand, the CMA can take action which, assuming the courts agree, could result in a real penalty. Under the Consumer Protection from Unfair Trading Regulations 2008, which is the relevant legislation here, the maximum penalty could be a fine and two years’ imprisonment.

This legislation states that if a company pays for editorial content to promote a product, consumers must be able to easily identify that the promotion has been paid for – #Ad or #Spon would be the obvious labels (the ASA favours #Ad, but the CMA tends to be open to #Spon). Now as far as I’m aware, there hasn’t been a case of an influencer being prosecuted under the 2008 regs. Not yet anyway, but maybe it’s only a matter of time?

Finally, as part of its investigation, the CMA is asking members of the public to complete a survey about their experiences of influencer marketing. It’s particularly interested in hearing from people who have bought products which were endorsed on social media and the survey can be found here.

This really is a fascinating development and I’m somewhat curious to see what happens next so, although admittedly the phrase is over-used, all I can say is ‘watch this space’.

Prizeology understands how the UK’s regulatory mechanisms work and specialises in influencer marketing compliance. If you’d like our input on your promotion, do get in touch. And if you haven’t already, download our whitepaper on social media influencers, disclosure and transparency.

Sarah Burns is Prizeology’s Chief Prizeologist.

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