In Short
- Influencers must clearly disclose paid promotions to comply with Australian Consumer Law (ACL) and avoid misleading consumers.
- Both businesses and influencers can be held accountable for false or misleading representations under the ACL.
- The Australian Association of National Advertisers (AANA) requires advertising content to be distinguishable from other content.
Tips for Businesses
Ensure influencers clearly disclose paid partnerships, using hashtags like #ad or #sponsored. Keep records of agreements to show compliance. Monitor influencer content to prevent misleading claims, your business can be held responsible. Transparency protects your reputation and builds trust with consumers.
Engaging the services of a well-known social media celebrity can do wonders for advertising your brand. The benefits include widening your audience base and securing trust and brand loyalty from customers who respect the social media ‘influencer’ at the centre of the post. However, in paying such ‘influencers’ to promote your product and brand, you need to consider whether they need to disclose to their followers that they are getting paid for their posts. Not doing this could leave you in breach of laws in Australia. This article explores influencer marketing laws in more detail. It outlines the current regulatory framework on influencer advertising, provides examples of failed advertising cases and tips to ensure your business remains legally compliant.
Australian Law
The regulatory framework in Australia around advertising consists of the legislative framework, advertising industry regulation and industry-specific regulations such as therapeutic goods.
Legislation
Australian Consumer Law (ACL)
Promoting a product or a service may attract the ACL by breaching the following sections:
- section 18 prohibits engaging in misleading or deceptive conduct for commercial purposes; and
- section 29 prohibits making false or misleading representations for commercial purposes, including testimonials.
The ACL can consider influencer marketing misleading under its provisions if the influencer does not disclose that they are receiving remuneration. It can be misleading to followers if they believe the influencer is providing their honest, unbiased opinion about a product when the business is paying for that opinion. For example, the case of ACCC v Advanced Medical Institute Pty Ltd highlights that the company requiring the misleading testimonial, the advertising agency that creates the campaign, and the celebrity providing the testimonial can all be liable for misleading conduct.
Australian Competition and Consumer Commission (ACCC)
The ACCC has provided some guidance on complying with the law and posting on social media. The deputy chair’s points on this topic can be summarised as follows:
- it is not illegal to pay an influencer as long as third parties are aware of the endorsement;
- you are on safe grounds as long as you disclose the commercial relationship; and
- not revealing the relationship is where the potential for liability arises.
Advertising Industry Self-regulation
The Australian Association of National Advertisers (AANA) implements a self-regulatory affairs program and is the first point of contact for advice on marketing and communication queries. The AANA has adopted a Code of Ethics, which is platform and media-neutral. It applies to all advertisers and marketers who promote brands, products or services to Australian audiences. The Australian Influencer Marketing Council (AiMCO) is also an industry association that has produced the AiMCO Influencer Marketing Code of Practice. This Code of Practice delineates and encourages the adoption of appropriate industry standards to support professional standards within influencer marketing in Australia.
Industry Specific Regulation
Therapeutic Goods Administration (TGA)
Under the Therapeutic Goods Advertising Code, your business must advertise therapeutic goods to the public in a safe and ethical manner. Accordingly, you must support informed healthcare choices and must not be inconsistent with relevant current public health campaigns.
Currently, testimonials (comments made about a personal experience with a good) are a popular form of advertising. However, recent changes to the Therapeutic Advertising Code have clarified that any person involved in the production, sale, supply or marketing of therapeutic goods is not permitted to provide testimonials in relation to such goods. This includes influencers engaged by a therapeutic goods company to promote the goods. The TGA provides further guidance on how you should advertise such products.
Endorsements
Unfortunately, many businesses engage in influencer marketing without requiring the influencers to disclose that they are receiving remuneration. For example, influencers may post a photo and a caption stating how great they find a particular product.
Australia Post and Warner Bros. are companies that have come under scrutiny for employing such tactics.
Australia Post
In January 2015, Australia Post was found using Instagram influencers to promote their brand, without disclosing that they received remuneration.
Such influencers included Ashy Bines, Camilla Akerberg and Jeska Lee. Each influencer posted photos of themselves at an Australia Post branch utilising their services and acclaiming the business.
Furthermore, the influencers deleted critical follower comments regarding the lack of disclosure. This lack of disclosure negatively affected Australia Post’s reputation, particularly with the audience they were targeting.
Warner Bros.
Warner Bros. has also faced issues of deceptive advertising in the US. This concerns their YouTube influencer campaign for the release of its video game, Middle Earth: Shadow of Mordor.
The Federal Trade Commission (FTC) launched an investigation against Warner Bros for deceptive advertising and reached a settlement in July 2022. For the next 20 years, Warner Bros. is required to:
- refrain from misrepresenting that an influencer is an ordinary consumer;
- include disclosures in YouTube videos and other media of all influencer marketing;
- advise each endorser in writing of their responsibility to disclose their connection to Warner Bros.;
- withhold payment to endorsers who fail to make such disclosures; and
- submit reports to the FTC of their compliance with the above.
Although an overseas matter, it provides some important considerations for retailers to be aware of in Australia.
Avoiding Misleading Advertising
Many influencers understand it is best practice to disclose if a post is a paid endorsement. Increasingly, it may be insufficient to disclose receiving a benefit by using abbreviated or less common labels such as:
- “#sp”;
- “#Spon”;
- “#gifted”;
- “#Affiliate”; and
- “#Collab”.
Influencers must now specifically identify that products are being advertised in a way that is easily understood. For example, they may use:
- “#ad”;
- “#Advert”;
- “#BrandedContent”;
- “#PaidPartnership”;
- “#PaidPromotion”;
- “#Sponsored”; and
- “#Advertising”.
The Australian Influencer Marketing Council has provided a helpful cheat sheet that an influencer should consider before posting promotional content on their social media platform.
As you can see, the best practice is full disclosure. To achieve this, it is important to follow the steps below:
- have a clear agreement with your influencer or celebrity that requires them to provide such disclosure to receive payment;
- ensure it is evident they will receive payment only for their honest opinion of your product. They cannot be forced to provide a positive review if this is not the case;
- provide clear guidelines on how the influencer should promote the post to ensure that it is compliant;
- ensure that their post is not scripted or does not reflect their genuine views. A post should fit naturally with the reputation and style of that influencer; and
- the disclosure should be prominent in the post.
As a franchisor, you must not engage in misleading and deceptive conduct. We explain what it is and how to avoid it.
Key Takeaways
In summary, there is an expansion of the regulatory framework around advertising laws. This is a direct result of the increasing use of advertising on social media platforms such as Facebook, Instagram and TikTok. Although such advertising is still predominantly self-regulated, it is prudent to be mindful of the guidance given by the various bodies. This is particularly so for certain products such as therapeutic goods. To protect your brand’s reputation, you should require your influencers to disclose endorsements.
If you have any questions about influencer marketing laws, speak with one of LegalVision’s advertising, marketing and consumer lawyers by contacting LegalVision today. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us on 1800 534 315 or visit our membership page.
Frequently Asked Questions
While there are no specific laws, the Australian Consumer Law (ACL) and industry codes such as the Australian Association of National Advertisers (AANA) and Australian Influencer Marketing Council (AiMCO) provide Codes which you should consider. Certain industries, such as the therapeutic goods industry, have their own regulations to follow.
You should specifically identify that the product you received is advertised. This includes using terms such as #Advertising, #BrandedContent and #PaidPartnership. Using abbreviations such as #sp or #spon or simply tagging the brand is insufficient.
We appreciate your feedback – your submission has been successfully received.
