ACCC puts influencer industry on notice with new crackdown

An influencer crackdown by the Australian Competition and Consumer Commission (ACCC) has found that a high percentage of social media creators potentially fall afoul of consumer law.

Based on a new report published by the consumer watchdog, 81 per cent of 118 influencers examined across a range of categories made posts that “raised concerns under the Australian Consumer Law for potentially misleading advertising”. It was part of a sweep of creators on Instagram, TikTok, Snapchat, YouTube, Facebook, and Twitch between January and February 2023.

Fashion influencers drew the most ire, with 96 per cent found to make concerning posts, compared to 73 per cent of gaming and technology influencers. Failure to disclose sponsorships or lack of clear disclosure were among the top issues, according to ACCC Acting Chair Catriona Lowe.

“Many of the influencers we reviewed did not make adequate disclosures in their posts where it appeared they were receiving payment, gifts or other incentives to promote brands, products or services,” Lowe said. “We found that many influencers were formatting their posts to hide their advertising disclosure or make it difficult for consumers to notice it.”

It’s common practice for brands and businesses to market products via social media creators. Known as influencer marketing, it encompasses various activities. Influencers with larger followings may receive payment to promote a product in their posts, while smaller creators often receive free products to use on social media. In both cases, they need to clearly label their brand partnership on any related posts. Popular platforms like Instagram and TikTok have integrated tools to help make disclosure simple and clear.

Australian Consumer Law applies to social media activity, including businesses and individuals. Posts may be deemed misleading and therefore breaking the law if sponsorships aren’t clearly disclosed online.

ACCC influencer sweep also targets online reviews

Although the numbers depict influencers in a bad light, the report focuses on those doing the wrong thing. Influencer marketing is a relatively new industry, with standardised guidelines not yet widespread.

As outlined in the book Extremely Online by Washington Post technology journalist Taylor Lorenz, this creator-driven economy is a growing trend. More people prefer to source news from social media platforms instead of traditional news outlets. This is why clear guidelines and practices for social media users are increasingly important.

In 2024, the ACCC will release more education and guidance to help creators and businesses do the right thing. It’ll include reminders of consumer law obligations that require clear disclosure for social media advertising.

Meanwhile, the ACCC also called out shady online review practices, finding that 37 per cent of 137 examined businesses “engaged in concerning conduct”. It found that some companies used third-party review services to manipulate online sentiment.

In some instances, this involved displaying fake reviews and hiding negative reviews. Household appliances and electronics were found to be among the biggest culprits of misleading behaviours.

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