The UK’s Competition and Markets Authority (CMA) has launched an investigation into concerns that social media stars are not properly declaring when they have been paid, or otherwise rewarded, to endorse goods or services.
Where influencers are paid or rewarded to promote, review or talk about a product in their social media feeds, local consumer protection law requires that this must be made clear.
As part of its investigation, the CMA has written to a range of stars to gather more information about their posts and the nature of the business agreements they have in place with brands.
The CMA says it has seen posts from celebrities which “promote or endorse products without clearly stating if the post has been paid for” and which “offer the celebrity’s personal opinion on the benefit of a product without clearly disclosing if they are being paid by the brand”.
George Lusty, the CMA’s Senior Director for Consumer Protection, said, “Social media stars can have a big influence on what their followers do and buy. If people see clothes, cosmetics, a car, or a holiday being plugged by someone they admire, they might be swayed into buying it. So, it’s really important they are clearly told whether a celebrity is promoting a product because they have bought it themselves, or because they have been paid or thanked in some way by the brand.”
If the CMA finds practices that break consumer protection law, it can take enforcement action. As part of the investigation the organization is asking the public to share any examples they have come across.
Stateside, the Federal Trade Commission last year began their own crackdown on transparency and social media influencers. The FTC sent more than 100 warning letters to individuals and brands, including actress Ashley Benson, singer Ciara and model Amber Rose.
Celebrity endorsements spread far and wide today. The financial sector is the latest to get in on the act. Those recently supporting financial products via social media include Elizabeth Banks, Paris Hilton, boxer Floyd Mayweather, Jamie Foxx and reality TV contestant JoJo Fletcher.