From Business Plus

Influencers have been warned to put clear labelling on ads on their social media content or face prosecution.

A number of different hashtags such as #IWorkWith and #OwnBrand are currently used by influencers to indicate advertising.

“For the avoidance of confusion, all commercial content should now be labelled #Ad,” said Kevin O’Brien, a member of the Competition and Consumer Protection Commission.

“Our research found that consumers consistently overestimated their ability to identify influencer advertising. Many consumers feel misled after purchasing an item on the advice of an influencer, and levels of trust in influencers generally are very low. Clear labelling benefits everyone.”

The CCPC and the Advertising Standards Authority for Ireland have published new guidance for influencers on the clear labelling of ads on social media. The guidance addresses paid promotion, items ‘gifted’ by brands or PR agencies, and the advertising of own-brand products and services.

“This guidance will support influencers to comply with their obligations under the law so that consumers know when they are being advertised to,” said O’Brien.

“It is an offence to mislead a consumer, and influencers who fail to comply with Ireland’s consumer protection legislation may be subject to enforcement action up to and including prosecution.”

The guidance was developed following experiments with eye-tracking technology and a survey of 500 social media users. A number of influencers were also asked to review the new guidance and provide feedback to the CCPC.

The CCPC published research into influencer marketing in 2022, which revealed that almost 50% of influencer advertising was not labelled or tagged as advertising. Tags used were often vague and unclear, leaving the consumer in the dark as to whether the influencer had been paid to recommend a product or service.

Influencers in Ireland must label commercial content to comply with the Consumer Protection Act 2007 and the ASAI’s Code.

ASAI chief executive Orla Twomey commented: “Consumers shouldn’t have to question if and when they are being advertised to – it should be instantly clear.”

Even if influencers use the recommended advertisement labels, the post may still breach consumer protection law if, in the overall context, the post is false or misleading. The CCPC publishes these enforcement actions periodically in its online Consumer Protection List.

The European Commission has launched an Influencer Legal Hub where influencers and content creators can find information on EU legislation in the area of fair commercial practices.

The hub provides animated video trainings and a library of resources developed in collaboration with academic experts.

Commissioner for Justice Didier Reynders said: “The business of influencers is thriving and a lot of consumers – often young people or even children – trust their recommendations. However, this business model also comes with legal obligations. Influencers must follow fair commercial practices and their followers are entitled to transparent and reliable information.”

The Commission and national consumer authorities are undertaking a review of online posts to identify testimonials and endorsements that mislead consumers.

Reynders said the result of this social media sweep will feed into the Digital Fairness fitness check that helps assess whether new legislation is necessary to make digital markets as safe as offline markets.