Navigating social media influencer requirements.

In recent years, social media influencers have transformed the way brands engage with consumers. Influencers carry significant power in shaping trends, opinions and purchasing decisions of consumers. However, this newfound influence has also brought about a set of legal responsibilities that brands engaging influencers must understand and navigate.

In this blog, we’ll delve into the legal requirements that brands who engage influencers need to be aware of when operating in Australia.

ACCC report

On 7 December 2023, the Australian Competition and Consumer Commission (ACCC) released a report detailing its findings following an internet sweep of 118 social media influencers.

This internet sweep reviewed influencers across Instagram, TikTok, Snapchat, YouTube, Facebook and Twitch in the following sectors:

• fashion;
• beauty and cosmetics;
• food and beverage;
• travel and lifestyle;
• health, fitness and wellbeing;
• home and parenting; and
• gaming and technology.

Influencers not disclosing brand relationships

Brands, advertisers and marketing firms were key focuses of the internet sweep given their role in facilitating influencer posts. The ACCC report found that 81% of the influencers reviewed were making posts that raised concerns under the Australian Consumer Law (ACL) for potentially misleading advertising.

The most common issue identified was influencers not disclosing brand relationships in their posts.

Disclosure and transparency

As we discussed in 2023, a critical legal obligation for influencers is disclosure and transparency. The ACCC requires influencers to clearly disclose any commercial relationships or incentives they have with brands when promoting products or services, including sponsored posts, product placements, affiliate marketing and freebies. To ensure consumers are not misled by influencer content, the ACCC are being increasingly vigilant in enforcing these disclosure rules.

Brands must ensure the influencers it engages for sponsored content, product placements or any other paid advertisement, make disclosures that are clear, prominent and easily understandable to the average consumer. Utilising hashtags such as #ad, #sponsored or #paidpartnership in social media post captions, or clearly mentioning the commercial nature of the post at the beginning of a video, are common adequate disclosure practices.

An influencer’s failure to disclose paid partnerships or brand relationships can lead to fines and damage to the relevant brand and/or influencer’s credibility, which may be irreversible in an industry built on reputation, authenticity and credibility.

Truth in advertising

In addition to disclosure and transparency, influencers must adhere to truth in advertising standards set by the ACCC. This means that any claims made about a product or service must be accurate, honest and substantiated. Whether promoting the benefits of a skincare product or the results of a fitness program, influencers must ensure that their statements are truthful and not misleading.

Exaggerated claims, fake testimonials and deceptive practices are not only unethical and potentially damaging to a brand and/or influencers’ reputation, but also illegal under the ACL. Brands should critically evaluate the claims the influencers it engages make about its products or services and avoid any endorsements that cannot be substantiated.

Key takeaways

Influencers play a significant role in shaping consumer behaviour and brand perception in Australia. However, with great influence comes great responsibility, including legal obligations to disclose paid partnerships and maintain truth in advertising.

The ACCC has noted that businesses should:

• ensure that any influencers it engages are aware of their ACL obligations when promoting a brand’s products or services; and
• be careful when providing influencers with scripts to follow when making posts (importantly, scripts should not require influencers to misrepresent their experience or honest views on a product or service).

With the risk of breaking the law, significant fines and potentially irreversible reputational damage, #disclosure, #transparency and #truth should be (and need to be) trending for brands and influencers across Australia.

For brands using influencers, the need for well-documented influencer agreements is essential. These agreements should state how influencers are to disclose their paid or sponsored content when posting on social media.

For more information on protecting your brand when engaging influencers, contact Bespoke.