The ACCC And Social Media Influencers: Introducing a New Age Of Transparency and Accountability

Authors: Petro Kaloterakis & Anna Pitchouguina, Progressive Legal

Advertising via Social Media Influencers has joined the toolkit of smart businesses seeking to popularise products online. The general idea is that, if an attractive person online uses a product – so will a consumer to liken themselves to that ideal person.  

This transaction is most powerful when the Social Media Influencer appears to genuinely like the product without any affiliation with the brand – so sponsorship is often made hidden or unclear. The Australian Competition and Consumer Commission (ACCC) is cracking down on this dishonest transaction, and influencers and businesses alike should prepare. 

The ACCC received more than 150 tip-offs after encouraging their Facebook fans to dob-in Social Media Influencers who are not disclosing paid partnerships with brands. The ACCC have investigated the majority of the proposed culprits – most of whom are from beauty, lifestyle, parenting and fashion spheres of TikTok, Instagram, Snapchat, YouTube and Facebook. 

This recent move sees the ACCC begin on a mission to bring transparency and accountability to social media.

In this article, we will explore the key findings and recommendations from the ACCC’s crackdown on Social Media Influencers, shed light on the legal implications, and discuss the impact on both influencers and businesses. Let’s take a look at the ACCC’s efforts to reshape the influencer marketing landscape and how it will affect you if you’re a social media influencer. 

The ACCC’s mission to uncovering deceptive marketing 

With the global surge in social media marketing, including the involvement of Public Relations (PR) firms, branding experts, and digital marketing services, the ACCC has recognised the urgency of regulation. Their aim is to ensure that commercial arrangements involving influencers be conducted transparently and ethically – by disclosing sponsorships or product endorsements.  

The ACCC’s scrutiny has focused on posts that contain incorrect information, create false impressions about products or services, omit crucial information about commercial arrangements, or fail to prominently display the commercial nature of the content.  

The interim report highlighting the ACCC’s findings can be found here. 

Challenges with Existing Laws 

While the Australian Consumer Law (ACL) currently regulates influencer activities, the ACCC’s report uncovers significant challenges: 

• 85% of respondents had difficulty distinguishing between advertisements and regular content. 
• Influencers often exercise substantial editorial control over promotional posts. 
• Many influencers present themselves as ordinary individuals, making it difficult to identify promotional content. 

These findings underscore the need for more specific regulations to address the shortcomings of existing laws and ensure greater transparency in influencer marketing. 

Findings and Recommendations 

he ACCC’s report reveals that influencer posts frequently fail to disclose commercial arrangements, and when disclosure does occur, it is often inconspicuous and goes unnoticed by consumers.  

As a response, the ACCC gave a series of recommendations to enhance disclosure compliance and educate stakeholders, including influencers, brands, advertisers, marketing firms, and social media platforms. 

Some of the key recommendations include: 

• Implementing an economy-wide ban on unfair trading practices. 
• Establishing measures to prevent and remove scams, harmful apps, and fake reviews. 
• Enforcing mandatory codes of conduct for digital platforms based on existing laws. 
• Creating an independent digital ombudsman to manage complaints. 

Businesses Need Influencer Agreements 

Influencers like to go above and beyond for paying brands. What this means is that influencers often make additional posts about a brand outside the scope of any agreement about specific posts.

Often the supplementary posts are the ones that do not disclose paid partnership – for example a Coles influencer who after making Instagram posts disclosing paid partnership, also posted a supplementary trip to Coles without the same disclosure.  

Businesses will seek to argue that supplementary posts that don’t adhere to paid partnership disclosure laws are the fault of the influencer. However, Instagram messages or cookie-cutter contracts may fail to prove this.  

Businesses can alleviate culpability if Influencer Agreements detail the exact services and responsibilities of the influencer. 

Progressive Legal appreciate that influencers, are often amateur content creators who are less aware of legal obligations. They bring significant opportunity and risk for our SME clients, that can only be properly managed by tailored Influencer Agreements made my professionals. 

If you want to alleviate the high risk the ACCC’s crackdown creates, contact us on 1800 820 083 or request our advice below for a tailored influencer agreement.

The impact of the ACCC social media influencers crackdown

The ACCC’s crackdown on social media influencers came shortly after the implementation of increased penalties under the ACL for various conduct violations, including misleading representations, unconscionable conduct, harassment, coercion, and supplying unsafe products. These penalties now include substantial fines for businesses and individuals. 

Currently, the ACL carries penalties of up to $2.5 million for individuals posting misleading reviews that do not disclose paid promotion. 

Additionally, new unfair contract laws, effective from November 2023, will apply to various situations, including small businesses relying on standard-form contracts. These laws aim to prevent unfair advantages and financial harm to disadvantaged parties. 

What are the next steps if you’re a social media influencer or content creator?  

The ACCC’s message is clear: consumer protection is a top priority. Whether you’re a seasoned influencer or a burgeoning content creator, ensuring legal compliance is imperative. Here are some recommended steps: 

• Conduct a social media post audit, ensuring clear and prominent disclosure of promotional content. 
• Review and update website content to include sponsorship statements. 
• Seek legal advice to review contracts and ensure compliance with fair terms. 
• Develop a plan for ongoing compliance and content reviews. 

Key Takeaways 

As the influencer marketing industry continues to flourish, the ACCC’s crackdown represents a significant step toward ensuring transparency and accountability in this space.  

With the potential for more stringent regulations on the horizon, influencers and businesses alike must adapt to these changes by prioritising ethical and strict marketing practices.  

By doing so, they can protect consumers and maintain the integrity of influencer marketing in the digital age. The ACCC’s mission is to create a level playing field where consumers can make informed choices, and businesses operate with fairness and transparency. 

At Progressive Legal, we understand the intricacies of these regulatory changes and are equipped to assist both social media influencers and businesses in navigating this new era of accountability. 

Our experienced lawyers can provide you with expert advice on compliance, review contracts to ensure they meet legal standards, and help you develop a strategic plan for managing future promotions. Contact us on 1800 820 083 or request our expert advice below.