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Social media engagement is up. Screen times have increased. The COVID-19 pandemic has hit the brand ambassador and influencer industry in different ways. Advertising campaigns of brand ambassadors for organizations and influencers might have been adjusted. Self-quarantining audiences have different demands. With the strong trust from their followers, influencers on social media channels such as Facebook, Instagram or Twitter still have a power that pays off.

This article gives an updated overview of the legal framework that applies to influencers when posting content with promotional character in Germany, the United Kingdom and the United States.

Autoren: John P. Feldman Nick Breen Alexander Hardinghaus Ramona Kimmich Toam Rubinstein

Germany

Various restrictive orders have been issued by German courts against influencers during recent years for insufficient or missing labeling of their posts as advertising on social media.1 Many of these restrictive orders were appealed. However, in the past, German courts have inconsistently interpreted the statutory labeling requirements applicable to advertising in the context of social media posts by influencers or brand ambassadors. We will discuss these intricacies in more detail below. The inconsistent approach taken by the German courts has led to a scenario of “over-compliance,” with almost every influencer post being labeled as advertisement.

While a clarifying decision of Germany’s Federal Supreme Court (Bundesgerichtshof) is still outstanding, in the meantime the German Federal Ministry of Justice and Consumer Protection (Bundesministerium für Justiz und Verbraucherschutz – BMJV) stepped in. The BMJV published a legislative proposal to soften the regulatory requirements for influencers to label their posts as advertising (Proposal).The Proposal has not reached the legal status of a draft bill yet. The idea of settling the issue was, in general, highly welcomed by the industry. The particular approach to soften the labeling requirements for influencers suggested in the Proposal, however, has received a lot of criticism.3

For the meantime, which tendencies and generally accepted rules can be derived from the case law and regulatory guidance?

Legal framework

Current statutory rules

The statutory labeling requirements for advertising are spread over several laws:

  • Video. The labeling requirements for video content are contained in the German Interstate Broadcasting Treaty (Rundfunkstaatsvertrag – RStV), in particular, in sections 58(3), 7 and 8. The RStV is going to be replaced by its successor, the Interstate Media Treaty (Medienstaatsvertrag – MStV), later this year4.
  • Text and images. Posts containing text and pictures need to comply with the advertising-related provisions of the German Telemedia Act (Telemediengesetz – TMG), in particular, section 6. Once the MStV has entered into effect, the relevant transparency requirements under the MStV will also need to be complied with.
  • General requirement to label commercial communications. Irrespective of the relevant media used, section 5a(6) of the German Act against Unfair Competition (Gesetz gegen den unlauteren Wettbewerb – UWG) requires every market player to label commercial communications in a sufficiently transparent manner so that their commercial nature is clear to the recipients. A statutory exemption from this general labeling requirement applies where the commercial intent of a commercial communication is directly apparent from the context. Unfortunately, German courts have not reached a common approach for determining under which circumstances the commercial intent of a commercial communication is so obvious that it would fall within the scope of the statutory exemption from the general labeling requirement.

In addition, in January 2020, the German media regulators, the State Media Authorities (Landesmedienanstalten), issued an updated version of their existing joint guidance paper on labeling adverts on social media (Guidance Paper)5. The Guidance Paper is intended to help organizations and influencers to comply with the requirements on labeling adverts and separating adverts from other content on social media, taking into consideration the different legal regimes that apply to different media. However, the Guidance Paper is not binding for German courts. Accordingly, compliance with the Guidance Paper does not protect influencers against potential restrictive orders from German courts, which competitors and consumer protection associations may apply for, based on alleged breaches of the UWG. Due to the lack of any landmark decision from the Federal Supreme Court, there is still a considerable degree of legal uncertainty.