By James Simons-
The Competition and Markets Authority (CMA) has launched an investigation into concerns that social media stars are not properly declaring when they have been paid, or otherwise rewarded, to endorse goods or services.
Typically, celebrities and influencers have millions of followers who watch their channels to see where they go on holiday, what they wear, which products they use, the books they read and more.
The concern has arisen because Online endorsements from celebrities and influencers can help brands reach target audiences and boost sales. Where influencers are paid or rewarded to promote, review or talk about a product in their social media feeds, consumer protection law requires their payments to be declared. The millions of followers who watch the channels of celebrities to stay updated with their movements and activities gives them plenty of leverage to make alot of extra money.
Without labeling their posts properly, fans or followers may be led to believe that an endorsement represents the star’s own view, rather than a paid-for promotion. This can lead millions of fans to place trust in that product, as they think it has been recommended by someone they admire. This trust may not be present if consumer fans were made aware that the brand had been paid for, therefore highlighting the major difference clarity makes in this respect.As part of its investigation, the CMA has written to a range of celebrities and social media influencers to gather more information about their posts and the nature of the business agreements they have in place with brands.
The CMA investigation is considering the extent to which influencers are clearly and accurately identifying any commercial relationships, and whether people are being misled.
The CMA has seen examples of posts which appear to promote or endorse products without clearly stating if the post has been paid for
offer the celebrity’s personal opinion on the benefit of a product without clearly disclosing if they are being paid by the brand
George Lusty, the CMA’s Senior Director for Consumer Protection, said:
”Social media stars can have a big influence on what their followers do and buy.
If people see clothes, cosmetics, a car, or a holiday being plugged by someone they admire, they might be swayed into buying it.
So, it’s really important they are clearly told whether a celebrity is promoting a product because they have bought it themselves, or because they have been paid or thanked in some way by the brand.
If the CMA finds practices that break consumer protection law, it can take enforcement action.
As part of the investigation the CMA is asking the public to share their experiences. The investigation would particularly benefit from hearing from people who have bought products which were endorsed on social media”.