The Competition and Markets Authority (CMA) has secured formal commitments from 16 celebrities with huge online followings to ensure they will say clearly if they have been paid or received any gifts or loans of products which they endorse.
The move comes after a CMA investigation into the celebrities, who include singers Ellie Goulding and Rita Ora, models Alexa Chung and Rosie Huntington-Whiteley, reality TV stars Millie Mackintosh and Megan McKenna, and vlogger Zoella.
The investigation began in August 2018, and assessed whether influencers were clearly disclosing paid-for endorsements. The CMA considers payment to be any form of reward, including money, gifts of services or products, or the loan of a product.
It follows earlier work in 2015 that considered online reviews and endorsements. As part of that, 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 has not made a finding on whether the influencers’ practices have breached consumer law, but said that all 16 influencers co-operated with it and volunteered to make changes to their practices. It notes that the provision of undertakings is not an admission of a breach of the law. Failure to comply with the agreement, however could lead to large fines or a prison sentence of up to two years if any of the celebrities were taken to court and found guilty.
Andrea Coscelli, chief executive of the CMA, said: “Influencers can have a huge impact on what their fans decide to buy. People could, quite rightly, feel misled if what they thought was a recommendation from someone they admired turns out to be a marketing ploy.
“You should be able to tell as soon as you look at a post if there is some form of payment or reward involved, so you can decide whether something is really worth spending your hard-earned money on.
“The enforcement action taken by the CMA has seen a number of social media stars pledge to be more transparent when posting online. It also sends a clear message to all influencers, brands and businesses that they must be open and clear with their followers. We will also continue our work to secure more improvement in this space.”
The CMA has also published a quick guide for social media influencers, marketing companies, agents and brands to ensure they are aware of their obligations under consumer protection law. This is in addition to the joint guidance issued with the Committee of Advertising Practice (CAP) “An Influencer’s Guide to making clear that ads are ads” published in September 2018.
The full list of celebrities named by the CMA is: Alexa Chung, Mario Falcone, Alexandra Felstead (‘Binky’ Felstead), Ellie Goulding, Holly Hagan, Rosie Huntington-Whiteley, Michelle Keegan and Rosia Promotions Limited, Iskra Lawrence, Camilla Mackintosh (‘Millie’ Mackintosh), Megan McKenna and M McKenna Limited, Chloe Sims, Zoe Sugg (Zoella), Louise Thompson and Louise Thompson Associates Limited, Dina Torkia, Rita Ora, James Chapman and Jim Chapman Limited.
This is the latest example of the regulatory authorities starting to crack down on the sometimes murky world of influencer marketing. In April 2017, the Federal Trade Commission (FTC) in the US revealed that it had sent out more than 90 letters reminding influencers and marketers of their obligation to “conspicuously disclose their relationships to brands when promoting or endorsing products through social media.”
At the time, the FTC said the letters were informed by petitions filed by Public Citizen and affiliated organizations regarding influencer advertising on Instagram, and by Instagram posts reviewed by FTC staff.