In early 2023, the Australian Competition and Consumer Commission (ACCC) conducted an internet sweep of influencers who were promoting and advertising products on social media. In December 2023, the ACCC released their findings, determining and identifying deceptive marketing practices used across the digital economy.

In the December 2023 publication, the ACCC identified the following key issues when conducting the sweep with influencers: 

• Not disclosing brand relationships in posts.
• Vaguely or confusingly attempting to disclose brand relationships.
• Publishing False or inaccurate statements about a brand, product or service

Overall, the ACCC found that 81% of the influencers caught up in the sweep raised concerns about doing either one or all of the above.  The sectors with the most concerning posts were fashion influencers, home and parenting influencers and travel and lifestyle influencers.

With the ACCC planning to release a targeted guidance document for influencers and businesses involved in influencer advertising in early 2024, those advertising on social media should be aware of the potential for a crackdown on transparency for commercial arrangements in this space. There is the reality of potential prosecutions.

Social media platforms such as Instagram, TikTok, and Snapchat allow influencers to market certain lifestyle, beauty and fashion products directly to consumers, or more accurately, their “followers.” This directness has allowed social media marketing to grow exponentially over the past decade. Many businesses use influencers to market their products to the masses, however, this growth also comes the watchful eye of the ACCC, and this latest report highlights a need for more specific regulations and controls.

Issues with misleading advertising have raised concerns about possible breaches of the Australian Consumer Law (ACL), which bans businesses from misleading or deceiving consumers. With businesses turning to social media influencers to target (often younger) customers, it is important that both businesses and influencers are wary of their obligations to comply with the ACL or risk facing consequences in the future.

Influencers must be compliant with the ACL. Some suggestions to ensure this include doing the following:

• Ensuring that promotional posts are labelled accordingly, making it clear to consumers that an incentive was received for making a post (this stands even if the product was received for free).
• Advertising the product “as is” and ensuring no misleading claims are made.
• Ensuring that the advertisement is free from deception (for example, not vastly altering pictures of the product or making deceptive comments about the products quality or purpose).
• Influencers who receive an advertising “script” should be wary. Before posting, influencers need to ensure that their experience of the product is accurate. Both influencers and businesses are responsible for complying with the ACL and ensuring that they are advertising responsibly.

Advertising on social media still needs to comply with the ACL, and it is important to ensure that influencers and businesses are doing this before stronger guidelines for online advertising in the digital economy are enacted. 

If you would like to discuss ensuring that you are currently complying with the ACL or if you have any other corporate concerns, please don’t hesitate to contact Tal Williams, Isabella Campbell, or anyone in Holman Webb Lawyers Business, Corporate, and Commercial team.