Australian regulators are cleaning up influencer misconduct on social media
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Senior Associate
Australia
I am a brand protection and regulatory lawyer focused on advising clients in the retail and consumer and health and life sciences industries.
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Any business that engages influencers to promote their products or services to Australian consumers on social media should be alert to the commencement of the Australian Competition and Consumer Commission’s (ACCC) social media sweep to identify, and take action against, misleading testimonials and influencer endorsements. This directive falls in line with the ACCC’s compliance and enforcement priorities for 2022/2023 and its broad mission to target deceptive marketing in the social media economy.
The sweep commenced in late January 2023 following 150 tip-offs from consumers relating to more than 100 influencers. The public responded to the ACCC’s request for tips by sending in reports of influencers failing to disclose their affiliation with a company whose goods or services they were promoting online. The reports predominantly concerned promotional activity in the beauty, lifestyle, parenting and fashion sectors.
In response, the ACCC have announced that their social media sweep will cover a wide variety of platforms, including YouTube, Facebook, Instagram, TikTok and Twitch. The focus will be on sectors where influencer marketing is common: fashion, beauty and cosmetics, food and beverage, travel, parenting, health, fitness and wellbeing. Along with investigating the conduct of influencers, the ACCC will also consider the role of advertisers, marketers, brands and social media platforms in facilitating misconduct.
This response follows the increasing consumer preference for purchasing goods and services online and the importance that online testimonials and endorsements play in influencing the purchasing decisions of consumers. The ACCC’s priority is to ensure that manipulative marketing techniques designed to pressure or exploit customers into purchasing goods or services are eliminated.
To ensure that they are not swept up in this regulatory action, businesses should require, as a mandatory term of engagement, that influencers disclose the commercial relationship between the influencer and the business in any promotional online posts. Such disclosures must be transparent and unambiguous. The use of hashtags or words such as ‘sp’, ‘spon’, ‘gifted’, ‘collab’ and ‘affiliate’ are unlikely to meet the requirement of transparency. As best practice, businesses should require influencers to use statements such as ‘paid promotion’, ‘ad’ or ‘advertisement’.
Businesses should keep in mind that the penalties for a breach of the…
