Don’t get swept up in ACCC’s influencer crackdown..

27/03/23 | Reading time: 3 minutes

Each year, the Australian Competition and Consumer Commission (ACCC) announces its Compliance and Enforcement Priorities. In 2022-23, one of its priorities was to identify deceptive marketing practices across the digital economy.

On 27 January 2023, the ACCC announced that it will be starting a sweep to identify misleading testimonials and endorsements by social media influencers. This comes as members of the public responded to the consumer watchdog’s call out on Facebook to report influencers who are not disclosing their posts as ads.

Recap on influencer codes in Australia

In 2021, we discussed the (at the time) recent changes to Australian Association of National Advertisers Code of Ethics (Code) which included the requirement for influencers to clearly disclose any commercial relationships. Later in the year, we also discussed some of Ad Standards’ first decisions in applying this requirement.

So, what does the Code say again? Section 2.7 of the Code simply states ‘Advertising shall be clearly distinguished as such’.

The accompanying Practice Note provides further guidance on this with respect to influencer and affiliate marketing. It provides:

  • that where there is a commercial relationship between an influencer or affiliate and a brand, the relationship must be ‘clear, obvious and upfront to the audience and expressed in a way that is easily understood’;
  • examples of acceptable disclosures include the following labels: ‘#ad’, ‘Advert’, ‘Advertising’, ‘Branded Content’, ‘Paid Partnership’ and ‘Paid Promotion’;
  • labels such as ‘#sp’, ‘Spon’, ‘gifted’, ‘Affiliate’, ‘Collab’, ‘thanks to’ or just mentioning the brand are less clear and may not be sufficient in clearly distinguishing the post as advertising.

Based on our experience:

  • use of Instagram and TikTok’s ‘paid partnership’ functions are also acceptable; and
  • burying disclosure labels in captions (eg including a disclosure hashtag at the end of other hashtags) does not meet the Code’s criteria. Disclosures should be prominent.

The Australian Influencer Marketing Council provides best practice resources to its members. These resources include the Australian Influencer Marketing Code of Practice which is influenced by the Code.

Ad Standards, the Code and the ACCC

The advertising industry is self-regulated in Australia. Any complaints relating to advertising is submitted to Ad Standards who makes decisions using industry codes such as the Australian Association of National Advertisers Code of Ethics. Ad Standards does not have the power to punish influencers or brands who do not comply with applicable industry codes.

The Code overlaps with the objectives of the ACCC and the Australian Consumer Law (ACL) to ensure that consumers are not mislead or deceived into believing that sponsored posts are organic when this is not the case. If found in breach of the ACL, individuals and businesses may face financial penalties.

It is a breach of the ACL to:

  • engage in misleading or deceptive conduct; and
  • make false or misleading representations about goods or services including testimonials relating to goods or services.

The ACCC’s intervention here is a reminder that while industry codes are generally voluntary, certain conduct may be caught under and punishable by legislation.

Key takeaways

  • Check your (or affiliated influencers’) sponsored social media posts and ensure that it can be clearly distinguishable as advertising in accordance with the Code;
  • Revisit the Code and the accompanying Practice Note to familiarise yourself with obligations relevant to influencer marketing;
  • If you are an influencer, ensure your comments in any sponsored posts are accurate, truthful and your own;
  • If you are a brand or agency working with influencers, it is important to have a written agreement in place to ensure that influencers are complying with applicable codes and legislation. You may also consider developing social media guidelines to provide influencers you engage.