Watchdog calls for fines for influencers who fail to declare sponsorship

Read More

The UK competition watchdog has called for the power to fine social media influencers if they fail to tell followers when posts are paid for by advertisers.

The Competition and Markets Authority (CMA) told MPs it needed stronger tools to enforce consumer protection laws and deal with an “endemic marketwide problem”.

This month the advertising regulator named six social media celebrities, including Jodie Marsh and five former Love Island contestants, for repeatedly failing to tell followers when they were paid to promote products in posts.

The CMA’s senior director for consumer protection, George Lusty, told the digital, culture, media and sport committee in the House of Commons that court action, which could result in fines, took too long and called for his organisation to have the power to issue fines to enforce its rulings.

“We think therefore there is a need for more powerful deterrents, and we really welcome what the ASA [Advertising Standards Authority] is doing, but ultimately we think that civil fines would be an important addition to the arsenal of regulators here,” he said.

The government is proposing to give the CMA the power to fine influencers for breaches of consumer protection law, under changes to competition and consumer policy that are currently under consultation. Deceptive or “hidden” advertising is illegal in the UK.

“The market has blossomed, the influencer marketing market has doubled in two years and it’s very, very effective,” Lusty told MPs. “It’s much more powerful than traditional advertising techniques and it’s particularly powerful with younger people in persuading them to buy things.”

However, Lusty said there was a low level of enforcement by the social media platforms themselves. “We’re still seeing across all platforms a very low level of sanctions actually being applied and practised against influencers.”

Last year Instagram, the photo and video sharing app, committed to a package of measures to crackdown on undeclared paid-for posts after an investigation by the CMA. This included Instagram vetting people’s posts if it appears that they have been paid to promote a business.

In 2019 the CMA said it had secured formal commitments from 16 celebrities, including Alexa Chung and Ellie Goulding, to state clearly if they have been paid or received any gifts or loans of products that they endorse.

The chief executive of the ASA, Guy Parker, told the hearing that the “scale and pace” of influencer advertising online and its “ephemeral” nature – some Instagram Story posts disappear after 24 hours, making them difficult to capture for monitoring purposes – contributed to difficulties with enforcement.