In today’s digital landscape, influencer marketing has become a powerful tool for brands seeking authentic connections with consumers. By sharing personal experiences and relatable endorsements, influencers can impact consumer attitudes and drive purchasing decisions. However, this influence also brings a responsibility to ensure transparency, enabling consumers to make informed choices.
Influencer Marketing and Consumer Legislation
Though there is currently no EU-specific law regulating influencer marketing, the Unfair Commercial Practices Directive provisions, as transposed in Part VIII of the Consumer Affairs Act (Chapter 378), protect consumers from misleading practices that could distort their purchase choices. Under these rules, it is considered a misleading omission if influencers fail to disclose material information, such as the commercial nature of their posts. Specifically, Article 51D(1)(b) of the Consumer Affairs Act, considers it a misleading omission if material information, including the commercial nature of a post, is hidden or presented ambiguously. In addition, Point (11) of the First Schedule (Consumer Affairs Act) forbids using editorial content to promote products without clear disclosure when payment is involved. Point (22) of the First Schedule (Consumer Affairs Act) prohibits false claims or creating the impression that the trader is not acting for purposes relating to their trader, business, craft or profession or falsely representing oneself as consumer.
Are Influencers Traders?
These rules apply to all business-to-consumer transactions. Under the Unfair Commercial Practices Directive, a ‘trader’ is anyone acting in a commercial capacity.
Influencers engaged in profit-oriented activities, whether through paid endorsements, bartered services, or affiliate links, are considered traders under these rules and must adhere to such rules. This means that they are legally obliged to disclose the commercial element of their content transparently.
Transparency and Disclosure Requirements for Influencers
To comply with consumer protection regulations, influencers are expected to:
Clearly disclose commercial relationships: Every post, reel, or story containing paid or sponsored content must explicitly state the commercial relationship. Recommended disclosure methods include labels like advert, or advertisement.
Prominent disclosure placement: Disclosures should be visible at the start of caption and/or prominently displayed on the first screen of content, ensuring readability with high contrast between text and background.
Avoid vague language: Terms like gifted, partner, or ambassador do not adequately convey the commercial nature of the post. Ambiguous acknowledgement, such as “thanks” or merely tagging a brand, are also insufficient.
Transparency in promotional codes and reviews: Sharing discount codes or promoting products without clarifying the business connection, or hiding disclosures within other hashtags, fails to meet transparency standards.
Legal Compliance
Under EU consumer law, influencers, brands and marketing agencies share the responsibility of ensuring transparency. Failure to disclose commercial relationships constitutes a breach of consumer protection laws, which may lead to investigations, legal action, and potential penalties.
As influencer marketing continues to shape consumer behaviour, transparency remains the foundation of consumer trust. By adhering to consumer protection regulations, influencers can maintain credibility and ensure that followers are able to make well-informed purchase decisions.
Influencer Marketing and Consumer Rights Guidebook
