Business Consulting Influencers Social Media

Bad News for Influencers. New regulations and expected fines

As any other people, Influencers too have an obligation to stay on the right side of the law. „If you endorse a product or service through social media, your message should make it obvious when you have a relationship – a “material connection” – with the brand. That could be a personal, family, or employment relationship or a financial relationship – for example, if a brand pays you or gives you free or discounted products.” Stipulates the official press release from the FTC.

According to the US Federal Trade Commission, „Disclosures 101 for Social Media Influencers answers the questions you may have about when to disclose, how to disclose, and what else you need to know.”

When to Disclose

⊲ Disclose when you have any financial, employment, personal,

or family relationship with a brand.

» Financial relationships aren’t limited to money. Disclose the

relationship if you got anything of value to mention a product.

» If a brand gives you free or discounted products or other perks

and then you mention one of its products, make a disclosure

even if you weren’t asked to mention that product.

» Don’t assume your followers already know about your

brand relationships.

» Make disclosures even if you think your evaluations

are unbiased.

⊲ Keep in mind that tags, likes, pins, and similar ways of showing

you like a brand or product are endorsements.

⊲ If posting from abroad, U.S. law applies if it’s reasonably

foreseeable that the post will affect U.S. consumers. Foreign laws

might also apply.

⊲ If you have no brand relationship and are just telling people about

a product you bought and happen to like, you don’t need to

declare that you don’t have a brand relationship.

What Else to Know

⊲ You can’t talk about your experience with a product you

haven’t tried.

⊲ If you’re paid to talk about a product and thought it was terrible,

you can’t say it’s terrific.

⊲ You can’t make up claims about a product that would require

proof the advertiser doesn’t have – such as scientific proof that

a product can treat a health condition.

Does this affect Europe as well?

In a study commissioned by the European Commission, Behavioural Study on Advertising and Marketing Practices in Online Social Media, the EC prepared the ground for similar policies. Just to cite some of the definitions from the report and the scope:

“Disguised advertising’ is any form of commercial communication that presents itself as non-commercial, in a way that it ‘blends in’ with other content published by users on OSM. With regards to the format, disguised advertising aims to look like non-commercial content, and appear in the same places on the platform where non-commercial content appears.1 With regards to the content, some traders also aim to make it appear as noncommercial as possible by ensuring that it shares the characteristics of content posted by non-commercial users.2 Disguising advertisements as non-commercial content prevents OSM users from recognising it as commercial, filtering it out, ignoring it or even from evaluating it negatively.

During this study, we identified three key types of disguised advertising practices that can be considered as potentially problematic for consumers: native advertising, influencer marketing and advertorials. The sections below concretely describe and exemplify these practices.”

Although the FTC policy is in place to offer protection for US customers it is safe to say that it will affect all major influencers around the world unless they have no US followers.

This is not the end of the regulation but the initial phase as we expect to see fines and event tighter rules in the online sector, both in USA and EU.

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