23 January 2019

What has the CMA announced?

The Competition and Markets Authority (CMA) announced on 23 January 2019 that it has secured formal commitments from 16 celebrities with significant social media presence in the UK, that they will be clearer in their online posts when they have been paid to endorse products, received gifts for endorsing products or loans of products which they endorse.

The CMA’s announcement is issued along with guidance for social media endorsements and follows on from joint guidance issued by the CMA and the Committee for Advertising Practice (CAP) in September 2018 for social media influencers.

What does the CMA guidance say?

The guidance issued by the CMA today is more direct than the joint guidance issued with CAP in September 2018 and along with the announcement of the formal commitments announced from the 16 high profile celebrities, makes it clear that the CMA is stepping up its activity in this space.

The general focus of the CMA guidance is to ensure that social media influencers and celebrities are clearer in their posts where they have been paid, incentivised or otherwise rewarded to endorse or review something. The guidance makes clear that this should be achieved by:

  • Saying clearly when an endorsement is made in return for money or other reward (including gifts of services or products or a loan of products) or when something has been given for free 'out of the blue' in the hope that it will be included in a post;
  • Being clear what the relationship is between the brand or business and the person making the endorsement. Simply giving information about a discount code or competition in a post isn’t enough to create an obvious association. The post must make clear if something is a promotion. Recent past relationships with a brand or company should also be declared (e.g. where there has been a paid relationship in the last year) even if the post in question is not a formal promotion between the person making the post and the relevant brand or company;
  • Doing more to ensure that consumers are not being misled by an impression that the person making the post is just a consumer or has actually made use of the services or products themselves. It must be clear if the post is a “business” post or if products or services shown have been gifted to the person making the post;
  • Using the words 'Advertisement Feature' or 'Advertisement Promotion', #Ad, #Advert, or the 'Paid Partnership' tool on Instagram in addition to these hashtags. However it is not just about using the right words, it is also about how and where these words are used. For example using #[brand name]ad or using #Ad amongst many other hashtags will not be sufficiently clear. Similarly tagging the brand without additional disclosure, or using ambiguous language like 'made possible by', or simply thanking a brand, will not be enough.

What does this announcement mean for those involved in online promotion of products and services?

There is a strong focus in the guidance of the tie in with consumer protection laws and particularly the Consumer Protection from Unfair Trading Regulations (CPUT). The CPUT contains prohibitions on certain specific misleading activities as well as a general prohibition on practices that can distort consumer behaviour. The focus of the guidance is all about preventing misleading behaviours, so the inference is that a failure to follow the guidance when brands and companies come together with celebrities and social media influencers to promote products and services, will be seen by the CMA to be a breach of the CPUT. It is also clear that the CMA sees that all those involved (including any agencies involved) will have responsibility if they have not discharged their obligations to ensure that online activity is not misleading to consumers. It is important to note that the CPUT contains criminal penalties for those held to have committed an offence under the regulations.

It’s also clear that the CMA was reluctant to simply issue more guidance and the commitments secured from some very high profile celebrities will doubtless be seen as a move to try to change behaviour from the 'top' and take more practical steps to try to change behaviour and protect consumers.

This strong warning shot from the CMA cannot be ignored and the guidance must be carefully considered by celebrities, agencies and brands alike when working together to advertise or endorse products or services online.

How can Burges Salmon help?

For further information, please contact Helen Scott-Lawler or Tim Deacon.

This article relates to our series which addresses the key issues and important considerations for businesses when advertising which we are releasing following the ASA’s release of a five year strategy which sets out a new focus on reinforcing regulations around online advertising. You can see our first article in the series here. The next article in the series will address key considerations when entering into agreements with social influencers.

Key contact

Helen Scott-Lawler

Helen Scott-Lawler Partner

  • Head of Food and Drink
  • Commercial
  • Intellectual Property and Media

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