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  • Writer's picturehayleytowers11

Influencers put on notice by the ACCC

Updated: Apr 2


Image of influencer modelling fashion outfit

In case you missed it, the ACCC is cracking down on social media “influencers” and their endorsements of products and services. This is big business now, with many enterprises turning to influencers for their “trusted reviews” and apparent authenticity.

 

As part of the ACCC review, consumers were asked to provide information and tip offs on influencers across various social media platforms including TikTok, YouTube, Instagram and Facebook. As a result of this - as well as organic searches done by the ACCC - the ACCC ‘swept’ 118 influencer accounts.

 

The ACCC stated that the aim of the sweep was to identify posts by social media influencers that contain potentially misleading reviews or endorsements, and which may cause consumer harm. The most obvious consumer harm is consumers being misled into thinking that an influencer is making a genuine, unsponsored endorsement.

 

The problem areas reviewed and reported on were:

 

  • Not disclosing brand relationships in their posts. This was the most common issue identified. It included influencers not disclosing whether they received gifts or payment or were otherwise incentivised to promote brands, products or services in their posts and sharing of posts. It also includes influencers not disclosing that they own a brand or business where the affiliation is unclear.

 

  • Using vague or confusing language or graphics to describe brand relationships in their posts. This includes the use of “sp” for sponsored “collab”, “creative partner” and other similar abbreviations, as well as disclosures only being made verbally at the end of a long video, and mixing advertising disclosures into a long list of other hashtags or putting “#ad” in tiny white font. It also includes making an initial disclosure about a brand relationship in a post but then failing to make any similar disclosures in later posts about the brand.

 

  • Making incorrect statements about brands, products or services in their posts. This included claims made by influencers that they’d purchased items themselves when they’d been gifted, or claims to have organically selected items in their “favourite” lists when some of these items were selected due to a brand relationship, or even claims to have used a product or service e.g. suggesting they’ve stayed at a resort but they have not actually been there.

 

  • Engaging in other concerning practices – subscription traps, multi-level marketing (MLM). These practices were held to be more relevant to the health, fitness and wellbeing sectors and included influencers seeking to promote MLM schemes dressed up as ordinary health programs. For those unfamiliar with MLMs, this involves encouraging followers to sign up to wellbeing programs and recruiting others to do the same to earn commission from sales. MLMs are not illegal in themselves, but some can be in breach of the pyramid selling provisions of the ACL. Subscription traps are when influencers promote free trials for programs or courses, which require consumers to provide their credit card or DD details up front to access the trial. The Ts&Cs of these service agreements were found to often be hard to find and complex, meaning consumers may not realise that fees will be charged after their free trial ends and they can also have trouble cancelling once the trial ends.

 

Shockingly (or perhaps not so much), the ACCC raised concerns about 81% of the 118 influencers that they investigated across a range of industries.

 

The sweep was not intended to identify specific breaches of the Australian Consumer Law (ACL) but ACCC have stated that they have


undertaken further work to determine whether influencer posts flagged as being of concern may be in breach of the ACL”.


In particular, the ACCC will be looking at the MLMs and subscription traps to determine if legal enforcement is required against certain brands and influencers.

 

MLMs and Subscription traps aside, the main breaches that the ACCC will investigate include misleading and deceptive conduct which is prohibited under s18 of the ACL.

 

It is unlawful for a business to make statements in trade or commerce that:

• are misleading or deceptive; or

• are likely to mislead or deceive.

 

Misleading and deceptive conduct includes a failure to disclose relevant information and it is no excuse to say it was “an honest mistake”, meaning that it does not have to be intentional.

 

Misleading or deceptive conduct (and other breaches of the ACL) may result in court-ordered civil remedies and it is left to be seen what, if any, action the ACCC will take as a result of this initial high-level sweep.


While the major influencers themselves are likely to be the initial target of any action taken by the ACCC, the ACCC has also said it will examine the brands and advertisers' roles in facilitating this conduct. The businesses who contracted with the influencer may also be targeted by any consumer claims that are made.

 

The ACCC also stated that it will be releasing further guidance material for influencers, brands, and advertisers, so stay tuned for more.

 

The Takeaway: If you are an influencer (even one with a smaller following) or a business that uses influencers in its brand marketing, you should be aware of these issues and that the ACCC is targeting this area of consumer harm. For businesses, this means reviewing which influencers you contract with, reviewing your contracts with the influencers, and looking at whether you have provided scripts to the influencer to follow (that are potentially misleading).

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