Reed Smith Client Alerts

With the growing use of social media platforms and the evolution of a new kind of e-celeb, it is no surprise that brands are increasingly utilising the platforms of celebrities, vloggers, bloggers and other social media personalities (‘Influencers’) to reach their target audiences and boost sales. However, the previously unregulated space is now coming under close scrutiny. The Competition and Markets Authority (‘CMA’), has recently published new guidelines to encourage greater transparency between Influencers, brands and their audiences.

Authors: Sakil A. Suleman Nick Breen Ami Patterson

As Influencer marketing becomes ever more prominent, the CMA is concerned that the public are being misled by Influencers failing to clearly disclose the relationship they have with brands because “without appropriate disclosure ... [followers] may think that an influencer has purchased the product themselves and therefore considers it good value for money or of good quality.” 

Consequently, the CMA has warned that misleading followers could result in enforcement action from the CMA, trading standards or other regulators. The sanctions the CMA may levy include substantial fines, banning of content, and civil and criminal liability. This is additional to the heavy reputational price that both Influencers and brands would suffer. It takes years for brands and Influencers to cultivate trust among consumers, but such negative publicity could erode followers’ trust instantly. 

To assist Influencers and brands to comply with the law, the CMA has published new guidelines. Along with guidance released by the Advertising Standard Authority (‘ASA’), these illustrate that compliance is a key focus for the regulator.