Competition watchdog the ACCC is launching an investigation into the influencer marketing sector to identify misleading and deceptive behaviour.
The ACCC (Australian Competition & Consumer Commission) and Industry body AiMCO (Australian Influencer Marketing Council) have been in talks about targeting high profile cases of influencers making false statements promoting products, omitting key information and not clearly labelling posts that have been paid for by sponsors or advertisers.
The ACCC says it will be conducting a proactive sweep of social media influencer platforms later this month to identify posts that contain potentially misleading reviews or testimonials.
The main issue within the influencer marketing sector is fraud. Influencer fraud occurs when paid influencers use inflated follower numbers to increase their rate of pay for engaging their audience on behalf of a brand, as such leads to further breaches to the legalities surrounding their sponsorships and paid advertising.
The competition watchdog will be focusing on breaches of Australian Consumer Law, including:
- Making incorrect statements or creating a false impression of a product, service or brand.
- Omitting key information in their social media posts, such as underlying commercial relationships, sponsorships or other incentives received to promote a product, service or brand.
- Failing to clearly disclose advertising or sponsorship, including where influencers have labelled posts as advertisements but this labelling is unclear or not prominent.
The ACCC will also consider the role of influencer marketing firms and social media platforms.
Josanne Ryan, CEO AiMCO/ AMAA, said: “The AiMCO Australian Influencer Marketing Code of Practice is very clear on ad disclosure being required for all creator paid promotions for brands on social platforms in order to meet the requirements of Australian Consumer Law and the AANA Code of Ethics which underpins it.
“Since AiMCO launched in 2019, and released the Code in 2020, our organisation has grown from just 25 industry members to 100 due to the growth in the sector. With the growth in ad dollars coming into the sector has come the awareness of the need for solid guidance on best practice and on meeting legal requirements.
“Attention from the Australian regulators is not unexpected, it has been happening in the USA and the UK for a number of years and is a sign of the power of the social platforms and of the growing influence of the Australian creator marketing industry.
“Our members are well aware of the need for advertising to be clearly disclosed and managing risk and brand safety for the brands they work with means that they need to ensure that ad disclosure is part of the creator brief and contract. Also, creators are increasingly understanding the need to be transparent with their audience and that working with brands means they need to treat it like a business and tick all the boxes.
“This sort of regulator attention will bring the issue to the attention of those that perhaps don’t understand that ad disclosure is required under consumer law.
“AiMCO will continue to work with all the regulators and to support the industry with guidance and knowledge.”
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