The Australian Competition and Consumer Commission (ACCC) has issued a warning to social media influencers regarding misleading and deceptive conduct and other potential contraventions of the Australian Consumer Law (ACL).
In a press statement, the ACCC noted it was looking into more than 100 social media account holders after complaints from consumers, including claims that the influencers failed to adequately disclose affiliations and paid sponsorships when promoting products to consumers.
The investigations will focus on influencers in the beauty, lifestyle, parenting and fashion sectors among others.
What is Misleading and Deceptive Conduct?
Under the ACL, it is unlawful for a business to engage in misleading or deceptive conduct, or conduct that is likely to mislead or deceive, in connection with the supply - or possible supply - of goods or services.
Relevantly, the words "possible supply" include the advertising and promotion of goods or services.
Influencers engaging in promotional activities as a source of revenue can be regarded as businesses and can therefore be captured under the ACL provisions.
The ACL prohibits several kinds of misconduct, including making false or misleading representations that:
- purport to be a testimonial concerning goods or services;
- concern the quality, purpose, benefits or characteristics of goods or services;
It should be noted that misleading or deceptive conduct includes explicit representations, implied representations and the failure to make appropriate disclosures.
This can capture situations where an advertiser fails to disclose pertinent information about the goods or services, leading the consumer to form an incorrect assumption or impression about the advertised products.
What are the Penalties for Non-Compliance with the ACL?
The penalties for non-compliance with the ACL requirements can include regulatory actions by the ACCC and civil litigation from affected customers or other businesses.
The Courts are empowered to impose a wide range of penalties for contraventions, such as fines, damages, injunctions and adverse publicity notices.
Potentially, the promoter could also be subject to investigation or regulatory actions based on the conduct of an influencer if it can be demonstrated the promoter endorsed, encouraged, approved or were indifferent to the influencer's conduct or statements about their products.
Tips for Ensuring Compliance with the ACL
Social media influencers, and businesses who seek to engage their services, should ensure that they comply with the requirements of the ACL.
This may include ensuring that:
- statements made regarding a product or service are accurate and factual;
- subjective statements, such as opinions and product reviews, are genuine and based on the influencer's actual experience of the product;
- statements made regarding any quality or characteristic of the goods or services can be supported by scientific or other evidence — for example, health claims for beauty or nutritional products;
- any commercial relationship between the promoter and the influencer is appropriately disclosed — for example, a clear statement that the influencer's post is a "paid promotion" or disclosure in circumstances where the promoter has gifted or supplied discounted goods, services or benefits to the influencer for the purposes of the promotion;
- any affiliate links and promotion codes are adequately disclosed — for example, a link or promotion code where the influencer receives a commission from clicks or subsequent purchases;
- appropriate contractual provisions are in place between the influencer and the promoter;
- the promoter has reviewed and vetted any scripts and content prior to publication;
- any other regulated disclosures are made — for example, mandatory financial services licensee disclosures for financial and investment products.
Many social media platforms now have tools to explicitly mark posts that contain paid advertising, sponsored content or commercial partnerships. Appropriate use of such tools may assist with compliance.
Of course, it is strongly recommended that any relationship between a promoter and an influencer should be appropriately documented with a legal contract. Proposed marketing activities should also be reviewed through the lens of legal compliance.
- ACCC social media sweep targets influencers, ACCC Media Release ()
- ACCC Business Guidelines for Advertising and Promotions