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ACCC Cracks Down on Social Media Influencers

  • 23 April 2024
  • Studio Legal

Written by Alyce Evans and Principal, Jennifer Tutty

Are you:

(A) A social media influencer (micro or major)?

(B) Working in advertising and marketing?

(C) Running a business that works with influencers?

If you answered YES to any of the above, then read on.

ACCC Cracks Down on Misleading Social Media Ads

In the past few weeks, the Australian Competition & Consumer Commission (ACCC) has seriously cracked down on social media influencers (and the agencies and brands working with them).

Their mission? To put a stop to misleading testimonials and endorsements (ie. sponsored posts) on social media platforms.

What does this mean?

If you’re an influencer receiving a benefit in exchange for posting about products and services, then you need to make this clear to your audience. A failure to do so may constitute ‘misleading and deceptive conduct’ under the Australian Consumer Law (found in Schedule 2 of the Competition and Consumer Act 2010).

In other words, if you haven’t been adding a #AD or a similar disclaimer to these posts or videos, the ACCC may consider your conduct to be misleading and deceptive.

Remember, a ‘benefit’ doesn’t have to be money, and could come in the form of free ‘gifts’ or other benefits from the business you are promoting. Whether you’re a micro-influencer or the next Kim K, these rules apply to you and it’s crucial to ensure you understand and are complying with them.

Additionally, the ACCC is also investigating the roles of other parties involved in the misconduct, such as advertisers, brands, agencies, and the social media platforms themselves.

If you fall into one of these categories, you need to ensure the influencers you are working with are clearly labelling any sponsored posts / ads as such.

How to label your social media sponsored posts?

In our article: #AD: The New Rules of Social Media Marketing that Influencers Need to Know we discuss the Australian Association of National Advertisers’ (AANA) Code of Ethics. This Code of Ethics provides guidance on how to promote products and services on social media.

Ad Standards and the AANA Code

In Australia, the advertising industry is self-regulated by Ad Standards. The Ad Standards panel will use the AANA Code to rule on any complaints regarding non-compliant content. As Ad Standards is not a court or government regulator, it doesn’t have the power to punish influencers who flout the rules. However, this does not mean that the AANA Code can or should be ignored.

The AANA Code provides guidance on social media advertising, with emphasis placed on transparently and clearly labelling ads as such.

How this applies to the current ACCC crackdown

The AANA Code aligns with the ACCC’s objective of ensuring that social media posts or videos (which are advertisements/sponsored posts) are not misleading and deceiving consumers into believing they are ‘organic’ content, when they are not. Effectively if an influencer has an affiliation with the product or business they are promoting, they must disclose this.

We strongly encourage all influencers, brands and marketing/advertising agencies refresh your knowledge on the AANA Code of Ethics requirements here.

Key Tips:

1. If a brand offers to pay you to promote its product on your social media or gives you free products or gifts in exchange for a post, then this is an ‘ad’ and you must label it as such.

2. Creating content under a commercial arrangement with a brand? You must make this clear and obvious to your followers.

3. There is a fine line between posting ‘organic’ content about products you like, and advertising. If you’re receiving a benefit from the brand for making the post, it’s an ad. Even if you genuinely like the products or brand, if you’re posting about them under a commercial arrangement with that brand, this is an ad and needs to be disclosed.

4. There is a fine line between posting ‘organic’ content about products you like, and advertising. If you’re receiving a benefit from the brand for making the post, it’s an ad. Even if you genuinely like the products or brand, if you’re posting about them under a commercial arrangement with that brand, this is an ad and needs to be disclosed.

5. #Ad is likely to meet the AANA Code’s requirements. Other labels such as ‘Advert’, ‘Advertising’, ‘Branded Content’, ‘Paid Partnership’ may meet the Code’s requirement. One of these labels must be used to disclose your affilitation with the brand, business or product.    

6. Ambiguous labels such as ‘sp’, ‘spon’, ‘gifted’, ‘affiliate’, ‘collab’, ‘thanks to’ or tagging the brand are unlikely to meet the Code’s requirements. These may be considered misleading or deceptive by the ACCC. 

7. Hidden hash tags and burying the disclosure at the end of a long post or in a bundle of multiple hash tags won’t meet the Code’s requirements. Additionally, they may be considered misleading and deceptive.

Why is the ACCC taking action?

Each year, the ACCC releases its ‘Compliance and Enforcement Priorities’ for the following year. One if its priorities for 2023 is to tackle the issue of manipulative or deceptive advertising across social media and digital platforms.

According to ACCC Chair Gina Cass-Gottlieb, “With more Australians choosing to shop online, consumers often rely on reviews and testimonials when making purchases, but misleading endorsements can be very harmful”.

Additionally, Ms Cass-Gottlieb commented, “It is important social media influencers are clear if there are any commercial motivations behind their posts. This includes those posts that are incentivised and presented as impartial but are not. The ACCC will not hesitate to take action where we see consumers are at risk of being misled or deceived by a testimonial, and there is potential for significant harm.”

Further Information

In addition to reviewing the AANA Code of Ethics (see our blog here and the AANA website here), we recommend reading the following resources:

The Australian Influencer Marketing Code of Practice

Studio Legal’s article: ‘What is the TGA Code and What Does it Mean for Brands and Social Media Influencers?’

The Therapeutic Goods (Therapeutic Goods Advertising Code) Instrument 2021, Schedule 1 (TGA Code)

Get in touch

If you’re an influencer, a marketing/advertising or a brand engaging in influencer marketing on social media, and would like advice on your legal obligations, please contact us at through our online form or via email at hello@studiolegal.com.au.

Photo by Laura Chouette on Unsplash.

DISCLAIMER

The information in this article is of a general nature. It does not constitute formal legal advice and should not be relied on as such. Please see the full disclaimer in our website terms. Please contact Studio Legal if you are seeking advice about a specific legal matter.