The rise of influencer marketing has pervaded every sector, and with it many seemingly novel legal questions. What started as candid recommendations from anonymous people has become and industry in itself in the need of regulation. As it often happens with new technologies, there was a “wild West” period when no rules seemed to apply – now we are aware that principles driving influencer marketing are actually very similar to traditional advertisement.
This matter is highly harmonized across Europe thanks to the 2005 Unfair Commercial Practices Directive that has been transposed to every member state.This said, every country has their own internal laws and case law developments that inform best practices in more detail. Also, the local enforcement and consumer bodies that watch compliance have different levels of proactivity.
There are a few universal principles that apply, the most important being that sponsored posts must be marked as commercial. The contrary constitutes false advertisement which is not only illegal, but also against most social media platform’s own Terms and Conditions.
Sponsored posts would include those created after a direct payment but also compensated in the shape of gifts (of the product to be promoted) or invitations to events. In such case, the posts must be marked as commercial using appropriate hashtags. Note that the classic #ad hashtag may not be enough in countries where English is not the first language, so one must find the appropriate local term. Also, it is not acceptable for the hashtag to be hidden at the bottom or between a “cloud" of dozens of hashtags. The key is to make it clear to the public that the recommendation is not spontaneous but paid for or promoted by a brand.
While this matter is perfectly regulated on paper, enforcement of these rules is the elephant in the room. Who watches this? And who enforces? In theory, any consumer can file a complaint or lawsuit, as can the relevant administrative bodies. The reality is that very few claims are being brought about by individuals, while administrative bodies are of variable belligerency (for instance, quite active in Italy, not so much in Spain). In any case, nothing comparable to the US, with their formidably proactive Federal Trade Commission (and a business culture more prone to litigation). This being said, social media posts have a global reach, and both brands and influencers must be wary and prepared to adopt best practices before the tide changes.
Lastly, we always recommend both brands and influencers to have a brief contract in place for social media marketing services to set out the different obligations of each party, such as compensation, number of pots, tone, hashtags, etc. It doesnt need to be long, even a one-pager may suffice, and it can save many potential problems in the future.