This month, the UK’s Competition and Market Authority (CMA) has published guidance for businesses on how to ensure transparency around paid endorsements which appear in social media posts. This follows on from previous regulatory guidance with the same stated intention of making it easier for consumers to identify paid advertising online. 

There are now three separate guides from the CMA on this subject for brands, influencers and social media platforms. In addition, a note has been jointly published by the CMA, Advertising Standards Authority (ASA) and Ofcom explaining the regulatory framework applicable to “hidden advertising” on social media platforms.

All the guidance is based on the CMA’s interpretation of existing consumer law. In particular, the CMA continues to rely on a broad interpretation of the duty on traders to meet the requirements of “professional diligence” set out in the Consumer Protection from Unfair Trading Regulations 2008 (the “CPRs”). Its guidance for social media platforms also appears to rely on the assumption that the CPRs operate in a way which makes platforms responsible for third party content.

The guidance for brands (entitled “Business responsibility and social media endorsements”) emphasises that content promoting a brand must be properly labelled as advertising when it results from a company’s marketing activities and/or it is being published on their behalf, regardless of the type of incentive that is offered and even in circumstances where the business doesn’t control the content.

The guide urges business to:

  • communicate to content creators that they must disclose if content that they promote for the brand is an advertisement;
  • check their social media posts, and
  • take action if non-compliant content is posted.

The guidance for influencers follows on from the updated “Influencers’ Guide” published jointly by the Advertising Standards Authority and the CMA in 2020, and contains further practical guidance about what the CMA considers compliance with the requirements to avoid unfair practices in online advertisements. 

The guidance for social media platforms sets out six key “compliance principles” (summarised below) which the CMA says it “expects” all platform operators to follow, although it acknowledges that operators may find other ways of complying with their obligations.

  • Ensuring users, particularly content creators, know that paid endorsements need to be clearly identified as advertising – the CMA suggests providing reminders both when users start using the service and when they are posting content.
  • Providing content creators with tools to label commercial content (ideally a one-click tool) – the CMA suggests this might include using algorithms to identify potential unlabelled advertising content, and automatically prompt content creators to use the tool to label it as advertising.
  • Taking proactive steps and using available technology to prevent hidden advertising – again, the CMA recommends the use of algorithms to achieve this.
  • Facilitating users to report suspected hidden advertising.
  • Promoting compliance by brands using the platform, by raising awareness of relevant policies.
  • Taking appropriate action where hidden advertising is found, including promptly removing content confirmed to be hidden advertising, applying sanctions to offending content creators and maintaining records of steps taken to deal with hidden advertising.

This suite of publications from the CMA further underlines its continued focus on applying consumer law to digital platforms and marketplaces.