News & Insights

In the rapidly evolving digital age, influencer marketing has become a powerful and widely utilised tool through which brands are able to build trust with their target audience. In response to the growth of influencer advertising, the Australian Competition and Consumer Commission (ACCC) recently conducted a comprehensive review of influencers to ensure transparency, and to protect consumers from misleading and deceptive practices. The outcomes of this review shed light on the need for both influencers and brands to exercise caution and adhere to regulatory guidelines.

ACCC Review

The ACCC reviewed influencers operating on key social media platforms such as Instagram, TikTok, Snapchat, YouTube, Facebook, and the livestreaming service, Twitch. The ACCC’s review was also spread across various industries, including, non-exhaustively, fashion, retail, online gaming, health and fitness and technology.

Key findings of ACCC review

The ACCC’s review highlighted several concerns related to influencer advertising, primarily focusing on the potential for misleading and deceptive conduct. Key issues identified included the lack of clear disclosure when content was sponsored, the ambiguous nature of affiliate marketing relationships and the potential impact on consumer trust.

One significant aspect of the review was the emphasis on influencers’ responsibility to provide clear disclosures about the commercial nature of their content. The ACCC stressed that consumers should be able to easily identify when content is sponsored or contains affiliate links. Failure to do so may result in the infringement of consumer protection laws.

The ACCC has confirmed that it intends to release comprehensive guidance material for influencers and brands early this year.  Please contact us to stay updated on the guidelines and ensure you receive this information.

Our recommendations for compliance

While we await the release of the ACCC’s guidelines, we’ve put together some recommendations of our own that will assist influencers and brands to avoid engaging in misleading and deceptive conduct:

1. Transparent Disclosure

Influencers must make clear and upfront disclosure about the commercial relationships they have with brands. This includes using hashtags like #ad or #sponsored in a prominent position within the content. Clear disclosure ensures that consumers can readily distinguish between organic and sponsored content. Notably, the ACCC confirmed that disclosing commercial relationships with the use of semi-transparent and confusing tags, such as “#sp” or “#spon”, was not sufficient disclosure for the purposes of Australia’s consumer protection laws.

If you are an influencer, we recommend setting some time aside to review your prior posts/content as soon as possible. All commercial and/or sponsored posts should clearly notify consumers that they are advertisements.

2. Avoid misrepresentation

Influencers and brands alike should be aware about the laws against misleading and deceptive conduct in trade or commerce. In particular, it is important that influencers do not misrepresent their experience with a product – even in circumstances where the brand they are working with provides them with a pre-written script.

3. Educating Influencers

Brands should take an active role in educating influencers about advertising standards and regulations. Providing influencers with guidelines on proper disclosure practices will contribute to a more transparent and compliant influencer marketing ecosystem. However, influencers should be aware that the buck stops with them – a brand’s failure to notify them about the requirement to disclose the existence of a commercial relationship between them will not serve to reduce the influencer’s liability for a breach of consumer protection legislation.

4. Comprehensive Contracts

Brands and influencers should establish clear terms in their contracts regarding disclosure requirements. Explicitly outlining the expectations for transparent advertising in contractual agreements can help mitigate the risk of unintentional non-compliance.

5. Regular Monitoring and Audits

Brands should implement a system of regular monitoring and audits to ensure that the influencers they engage are consistently adhering to disclosure guidelines. Proactive measures will help identify and rectify potential issues before they escalate.

6. Industry Collaboration

Industry stakeholders, including influencers, brands, and regulatory bodies, should collaborate to develop and promote best practices for influencer advertising. This collective effort can foster a responsible and ethical influencer marketing environment.

Key takeaways

The ACCC’s recent review of influencer advertising underscores the importance of transparency in maintaining consumer trust. Influencers and brands alike must be proactive in ensuring compliance with advertising standards to avoid misleading and deceptive conduct. We expect that the ACCC’s upcoming release of guidance material will be followed by a grace period for influencers and brands to adopt these minimum standards. If influencers and brands don’t adopt these minimum standards, it is likely they should expect a ‘please explain’ notice from the ACCC. This may result in enforcement action against influencers and brands that continue to breach Australia’s consumer protection laws.

If you require any advice or assistance in navigating the laws impacting the influencer marketing landscape, please contact Macpherson Kelley’s IP, Trade & Technology team.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.