Reed Smith Client Alerts

We are all familiar with celebrities and social media stars using their social media accounts to promote brands and products. For some, it is their main source of income and they can make millions in endorsement and sponsorship deals. Major TV and sports icons can command hundreds of thousands of pounds per post, which may sound extraordinary but the reality is that this is fast becoming one of the primary means for marketing to young people.

Authors: Gregor Pryor Nick Breen

The problem with influencer marketing is that the commercial relationship is not always appropriately disclosed, making it difficult for consumers to distinguish between editorial content and advertising.

In response to this, the Competition and Markets Authority (CMA) has now launched an investigation into the failure of influencers to properly declare the promotional or paid-for nature of some of their social media posts. 

Regulatory scrutiny on these issues is nothing new; the CMA conducted similar work in 2016 in relation to online review and endorsements. Similarly, the Advertising Standards Authority (ASA) announced earlier this year that it had launched a project exploring consumers’ ability to recognise ads online and the adequacy of labelling.