A probe by a European market regulator found that the majority of influencers fail to alert consumers when their social media posts are ads. According to the European Commission and national consumer protection authorities from 22 Member States, along with Norway and Iceland, a recent sweep of almost 600 influencers’ posts on Instagram, Snapchat, Twitter, and YouTube, among other platforms, revealed that while nearly all (97 percent) of these individuals posted commercial content, “only one in five systematically indicated that their content was advertising.” By failing to disclose the commercial nature of their posts, these influencers (who were not named in the EU Commission’s report) are likely running afoul of EU consumer law, which mandates that content that is the result of a commercial arrangement mist be clearly disclosed.
The EU Commission’s sweep focused on the posts of 576 influencers, including 82 individuals who have over 1 million followers, 301 with over 100,000 followers, and 73 with between 5,000 and 100,000 followers. As for the “main sectors of activity concerned,” those are, in decreasing order, fashion, lifestyle, beauty, food, travel and fitness/sport. The EU Commission noted in connection with its findings that in their ads, 119 influencers were considered to be “promoting unhealthy or hazardous activities, such as junk food, alcoholic beverages, medical or aesthetic treatments, gambling, or financial services such as crypto trading.”
At a high level, the EU Commission revealed that among some of the key takeaways from the sweep are …
> 97% of the influencers surveyed published posts with commercial content, but only 20% systematically disclosed it as advertising;
> 78% of the verified influencers were exercising a commercial activity; however, only 36% were registered as traders at national level;
> 30% of influencers did not provide any company details on their posts, such as e-mail address, company name, postal address or registration number;
> 38% of the influencers at issue did not use the platform labels that serve to disclose commercial content, such as the “paid partnership” toggle on Instagram, on the contrary, these influencers opted for different wording, such as “collaboration” (16%), “partnership” (15%) or a generic “thanks” message to the partner brand (11%);
> 40% of the influencers made the disclosure visible during the entire commercial communication. 34% of influencers’ profiles made the disclosure immediately visible without needing additional steps, such as by clicking on “read more” or by scrolling down;
> 40% of influencers endorsed their own products, services, or brands. 60% of those did not consistently, or at all, disclose advertising; and
> 44% of the influencers had their own websites, from which a majority was able to sell directly.
As a result of the sweep, the Commission confirmed that 358 influencers are now earmarked for further investigation. “National authorities will now contact them to request that they follow the rules in place. Further enforcement action may be taken if necessary, in accordance with national procedures,” according to the Commission, which says that it will analyze the results of the sweep also in light of the legal obligations of the platforms under the Digital Services Act and will take the necessary enforcement action as appropriate.
The Law in Brief: In the EU (and in the U.S. and beyond), the law mandates that influencers’ commercial communications (i.e., ads) need to be transparent. In accordance with the Unfair Commercial Practices Directive, for instance, which provides a framework on commercial practices that infringe consumer protection, “traders” or persons acting on behalf of traders (this includes influencers), individuals must disclose the “commercial element” behind any influencer marketing content in “a clear way” or in order to avoid having such content be deemed misleading.
In addition, influencers that sell products or services for their own account have the same legal obligations as online shops, according to the EU Commission. This includes providing consumers with legal guarantees or withdrawal rights as required by the Consumer Rights Directive.
Still yet, under the Digital Services Act, which goes into effect on February 17, 2024 for all online platforms in the EU, “all influencers uploading content need to declare whether such content contains commercial communications,” the Commission states.
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