ACCC finds more to worry about with influencers and misleading advertising

By AdNews | 7 December 2023
Credit: Laura Chouette via Unsplash.jpg

Competition watchdog ACCC has released two short reports outlining details of the recent findings of internet sweeps of social media influencers and online reviews. 

The update and review is part of the ACCC's ongoing work to scrutinise misleading online reviews and influencer endorsements.

The sweep reviewed influencers across seven sectors; including Instagram, TikTok, Snapchat, YouTube, Facebook and the livestreaming service Twitch, with most influencers in each sector making concerning posts. These influencers were tipped off to the ACCC from consumers.

This ranged from 96% of fashion influencers reviewed making concerning posts to 73% of gaming and technology influencer posts raising concern.

Of the 118 social media influencers reviewed in the ACCC’s influencer sweep, 81% were found to be making posts that raised concerns under the Australian Consumer Law for potentially misleading advertising.

ACCC acting chair Catriona Lowe said the next steps in the platform's continuing scrutiny of these important parts of the online economy include developing strong guidelines for online operators.

"So they clearly know what we expect, before a renewed focus on enforcement. Influencers and businesses need to review their practices and improve compliance with the Australian Consumer Law to ensure consumers can trust the information they find online," she said.

Influencers often cultivate an image of themselves as being relatable and genuine, which can create an element of trust with their followers when it comes to recommendations, says Lowe.

“Based on the findings of our sweep, we are concerned that influencers, brands and advertisers are taking advantage of consumers’ trust through hidden advertising in social media posts by influencers," she said. 

The ACCC, notes Lowe, found that many influencers were formatting their posts to hide their advertising disclosure or make it difficult for consumers to notice it.

“Under the Australian Consumer Law, businesses must not mislead or deceive consumers. This applies to influencers engaging in trade or commerce, as well as brands and marketers using influencers to advertise online," said Lowe. 

The ACCC will release guidance in early 2024 for influencers and businesses to remind them of their obligations under the Australian Consumer Law to disclose advertising in social media posts.

In a separate internet sweep to identify fake or misleading online reviews, the ACCC found that 37% of the 137 businesses reviewed had engaged in concerning conduct.

The sweep found a prevalence of businesses using third-party professional reviewers and review removalists as a tool to manage their online reputation.

Breakdown of influencers swept. Credit: ACCC.

The ACCC reviewed 24 of these businesses that offer services to create fake reviews, remove negative reviews and prevent or edit negative reviews.

For the past two years, the ACCC has prioritised consumer and fair-trading issues relating to manipulative or deceptive advertising and marketing practices in the digital economy.

For social media influencers, there are also industry-led practices and guidelines which provide a standard for Australian influencer businesses and advertisers.

The Australian Association of National Advertisers’ Code of Ethics requires that advertising is clearly distinguishable as such. The Australian Influencer Marketing Council’s Code of Practice also outlines good practice for companies and influencers engaging in influencer marketing, including in disclosing advertisements.

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