By Ursula Mulvaney – arch.resource member.
Only two days after the launch of the new watchdog on big tech the Competition and Markets Authority (“CMA”) issued a press release regarding CMA action that resulted in Facebook going further to combat the trade of fake and misleading reviews on its sites on Facebook.com and Instagram.com. It is reported that Facebook has agreed further changes to its systems for identifying, removing, and preventing such content on its social media platforms to ensure it is fulfilling commitments previously provided to the CMA in 2020. This followed a CMA investigation of these websites, which found evidence that the illegal trade in fake and misleading reviews was still taking place on both Facebook and Instagram.
The Chief Executive of the CMA commented that “Facebook has a duty to do all it can to stop the trading of such content on its platforms” and whilst the company made significant changes after the CMA intervened again “it is disappointing it has taken them over a year to fix these issues”” The CMA will “continue to keep a close eye on Facebook, including its Instagram business”. The CMA will not hesitate to take further action if required.
Last week brought the launch of the Digital Markets Unit (“DMU”) a tough new regulator to boost online competition. As stated by the Digital Secretary it is a “major milestone in the path to creating the world’s most competitive online markets, with consumers, entrepreneurs and content publishers at their heart”. The Digital Secretary has asked the DMU to begin by looking at the relationships between platforms and content providers and platforms and digital advertisers.
It is understood that Government is considering the final form and function of the DMU and will consult on final proposals along with other key features in the first half of 2021 and will then legislate to put the body on a statutory footing as soon as parliamentary time allows. Some commentators believe legislation is not expected before 2022. Hopefully the government remains committed to making rapid progress in this area.
Once the legislation is in place, it will introduce and enforce a new code for governing the behavior of platforms that currently dominate the market. As part of this process, the CMA has been advising government on the design and implementation of a pro-competition regime for digital markets.
In the meantime, Government last week published an outline of the role of the non-statutory DMU for its first year of operation:-
- Carrying out preparatory work to implement the statutory regime
- Supporting and advising government on establishing the statutory regime
- Evidence gathering on digital markets
- Engaging stakeholders across industry, academia, other regulators, and government.
The DMU will be housed in the CMA and headed by a senior CMA official. The government considers it important that the non-statutory DMU can access a broad range of expertise including in ex-ante regulation and data rights.
Advertising Standards Authority – Influencer Marketing – make it clear that ads are ads
The Advertising Standards Authority (“ASA”) recently published a report on their proactive monitoring of some influencer marketing activity on Instagram and the disappointing level of non-compliance they found. The report explains that it focused on Instagram because complaints to the ASA about Influencer ad disclosure tended to be on this platform. The rules on ad disclosure apply to all platforms and media where influencers choose to engage in advertising.
The report noted that ads were largely found to fall into three sectors: Beauty, Clothing and Leisure. However, in terms of following the rules it is reported that no sector stood out as having an acceptable rate of compliance when it came to labelling ads. This suggests to the ASA that neither influencers nor the brands are taking enough care to ensure consumers know when influencer marketing is occurring. From the perspective of the ASA “the ad rules are clear: it must be obvious to consumers before they read, “like” or otherwise interact with a social media post if what they are engaging with is advertising. In most cases the use of #ad (or similar) is the clearest way of communicating the commercial nature of social media content. Alternatively, a platform’s own disclosure tools, such as Instagram’s Paid Partnership tool, can also help to distinguish advertising from other content”
The ASA has put the influencers and several brands, on notice that if future spot checks they carry out on any platform reveal problems, they will take enforcement action. These may include:-
- Promoting non-compliance on a dedicated page on the ASA website
- Promoting non-compliance through their own targeted paid search ads
- Working directly with the platforms and the CMA on further enforcement action.
Practical Steps:
If you are involved in influencer marketing, ensure you take time to make it clear that ads are ads and be mindful of the ASA tips so you get it right the first time: –
- Label all relevant stories
- Ensure consistency across formats
- Take care with visibility
- “Affiliate” is NOT a safe label
- Familiarity is NOT sufficient
The CMA has also been investigating the disclosure of paid for endorsements on social media platforms. In October 2020 Facebook Ireland Limited provided the CMA with undertakings that it will do more to prevent “hidden advertising” (which is illegal in the UK) being posted on its Instagram Platform. The CMA has been investigating Instagram due to concerns that it was not doing enough under UK consumer protection law to prevent its users from endorsing businesses without making it clear that they had been paid or given free gifts to do so.
For further information please contact arch.resource member Ursula Mulvaney by email at ursula@arch.law
