Influencer '#AD-Vertising' ' The Asa And The CMA's Response To The DCMS

• Published date: 05 October 2022
• Subject Matter: Antitrust/Competition Law, Media, Telecoms, IT, Entertainment, Compliance, Antitrust, EU Competition , Advertising, Marketing & Branding, Social Media
• Law Firm: Shepherd and Wedderburn LLP
• Author: Carly Duckett

Carly Duckett, Solicitor in our commercial disputes team, discusses the recent responses issued by UK competition and advertising regulators regarding the importance of compliance with regulations by influencers and the brands that work with them.

Influencer marketing is a crucial sector of the UK advertising industry, but the Digital, Culture, Media and Sport ("DCMS") Committee has commented that "if you dig below the shiny surface of what you see on screen, you will discover an altogether murkier world where both influencers and their follows are at risk of exploitation and harm online". This statement from the DCMS Committee Chair, Julian Knight MP, followed the publication of the Committee's 'Influencer Culture: Lights, Camera, Inaction?' report which suggested that the current framework is not keeping pace with the growth of the sector and ought to be reformed.

The Advertising Standards Authority ("ASA"), the UK's advertising regulator, and the Competition and Markets Authority ("CMA"), the UK's competition regulator, have since responded to this report. The ASA monitors adverts across the UK, including those posted by Influencers, for compliance with advertising rules. The CMA enforces competition and consumer laws and can conduct investigations in relation to suspected breaches of those laws in the market. The ASA and CMA work together to ensure that consumers "get a good deal" (to use the CMA's words) and are not misled by advertising.

The ASA and CMA have affirmed the importance of compliance with regulations which require influencers to disclose advertisements to their followers, otherwise they may face sanctions.

The ASA's Response

Influencers have a more personal relationship with their followers than traditional advertising, which places those followers at an increased risk of exploitation by being misled. To combat this, the ASA requires influencers to identify posts that are advertisements, which is often done by including "#ad". The DCMS found insufficient compliance with this requirement and called for the ASA to strengthen this rule and be afforded greater enforcement powers.

The ASA identifies advertisements by its payment and control test, which considers a post to be an advert if the advertiser exerts a degree of editorial control over the post, and there is payment. The DCMS suggested that the control element of this test should be dropped to extend the posts that fall within the ASA's scope. However, the ASA consider that this...