Fines for influencers?
Did you notice that the Competition and Markets Authority (CMA) recently called for social media influencers to be fined if they don’t use #ad when they should? No? Well, there’s been a lot of talk about fines recently and perhaps you’ve been caught up in whether or not our esteemed Prime Minister will receive a fixed penalty fine for breaching his own lockdown regulations…
If so, you’re forgiven – I’m sure most of us have been transfixed by partygate – but the CMA did indeed tell MPs that it needs stronger powers to make sure consumer protection laws are adhered to and to tackle what was described as an “endemic, market-wide problem”.
Of course, Prizeology was one of the first – if not the first – organisations globally to highlight that a lack of influencer transparency about whether or not they had been paid to promote a particular product was misleading consumers.
Seminal research
Back in 2018, our ground-breaking (if we do say so ourselves!) report, Under the Influence: UK Consumer Attitudes to Social Media Influencer Marketing, found that over half of the UK public – 61% – felt brands were not transparent about their use of influencer marketing. What’s more, the vast majority – 88% – believed that they should be informed if people were being paid to promote products.
The research left no doubt that this lack of transparency was damaging for brands, with over half of the UK public – 60% – saying that their perception of a brand improved when the brand was transparent about its use of product promotions.
Lengthy legal process
Back in the House of Commons and George Lusty, Senior Director for Consumer Protection at the CMA, told members of the parliamentary Digital, Culture, Media and Sport Committee that taking influencers to court for non-disclosure could result in them being fined, but took too long. To speed things up, he asked for the CMA to be given the ability to back up its rulings with fines.
“We think therefore there is a need for more powerful deterrents, and we really welcome what the ASA [Advertising Standards Authority] is doing, but ultimately we think that civil fines would be an important addition to the arsenal of regulators here,” he said.
He continued, “The influencer marketing market has doubled in two years and it’s very, very effective. It’s much more powerful than traditional advertising techniques and it’s particularly powerful with younger people in persuading them to buy things.”
Effective deterrents
The ASA currently has a list that publicly names and shames influencers who breach the CAP Code – former Love Islander Amber Gill is the latest addition. It is also running targeted Instagram ads that cleverly highlight which influencers (hello Jodie Marsh!) have been sanctioned for non-disclosure.
However, it doesn’t appear to be winning the battle and the platforms themselves don’t seem serious about confronting influencers. As the CMA’s Lusty told MPs, “We’re still seeing across all platforms a very low level of sanctions actually being applied and practised against influencers.”
The government appears willing to give the CMA the powers it’s asking for to fine influencers for breaches of consumer protection law and is currently consulting on policy changes, which is good. Mind you, these young women (and they are largely young women) are successful and affluent, and one has to wonder how high the fines will have to go before they act as a genuine deterrent.
If you’d like to contact Prizeology, please call us on 020 7856 0402 or email us on hello@prizeology.com.
