Social media endorsements – CMA investigations

First published by Author on January 04, 2023 in the following categories: Advertising Consumer Law Digital Investigations Latest Selling Restrictions and tagged with advertising | cma | consumer law | incentives | investigations | market study

For several years, the CMA has been investigating social media endorsements to make sure that vital competition and consumer laws in the UK and not being broken.

Given the prevalence of social media, particularly in respect of it being used for marketing and advertising these days, it is vital that people know when they are seeing advertisements and products and services being pushed for recompense by influences. There have been many questions as to whether it has been clear enough that people know they are being advertised to as opposed to simply being recommended a product, which is the real focus of the CMA investigation.

About the CMA social media endorsements investigations

In August 2018, the CMA (Competition and Markets Authority) launched an investigation in respect of consumer enforcement, focused on social media influencers who reportedly may not be making their posts clear when they are being paid or recompensed for endorsing goods and services.

Competition law and consumer law generally requires people to be made aware if social media influences are being paid, or are receiving some kind of benefits, for endorsing a product or service. However, the CMA is concerned that laws have not been adhered to, and so they launched their social media endorsements investigation to review compliance.

In January 2019, the CMA reported that a number of influencers had provided undertakings in respect of disclosure information about posts they were making. At the time, this was a key step toward ensuring that marketing is ethical in the social media environment. In October 2020, Facebook reportedly committed to the CMA that they would also make sure rules were being complied with in respect of clarity for advertising as well.

Latest in the investigations

The CMA published its latest update on the enforcement action that has been taking place in November 2022. They confirmed that further guidance had been published for social media platforms, as well as for content creators and influences alike.

The CMA also published a set of compliance principles that can help in this regard, and guidance for influencers was also updated. The CMA, in their most recent publication, said that they are:

• 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

You can read more about the CMA action and the recent updates here.

An important matter to follow

Given how popular social media is these days, and how it is now one of the key sources that people use for both news and information about products and services, it is essential that social media endorsements are carried out ethically. It is important that people know when they are being advertised and marketed to, as opposed to someone with influence simply enjoying a particular product or service. Clarity, in this regard, is key.

The social media endorsements matter that the CMA has been looking into is incredibly important, and it will no doubt continue to be important given that trends show social media will continue to be prevalent in coming years. Advertising and marketing need to be clear so people understand what they are seeing in respect of simple recommendations versus people being paid to push products and services. If there is any lack of clarity, people are perhaps not being marketed to in an ethical way. This is something that needs to be stamped out.