With more than 100 influencers under its microscope, the Australian Competition and Consumer Commission (ACCC) is scouring social media for ‘misleading testimonials and endorsements by influencers’ as part of its newly announced list of priorities. A sweep has been launched across TikTok, Instagram, Facebook, Snapchat and YouTube in a bid to protect consumers in the digital economy.
Beyond influencers, the ACCC is also scrutinising other parties in the marketing ecosystem, including advertisers, marketers, brands and social media platforms in enabling misconduct.
As more Australians elect to shop online, there is an increasing reliance on reviews and testimonials in the purchasing process. According to ACCC chair Gina Cass-Gottlieb, the onus is on social media influencers to declare any affiliations with products or companies, and to provide transparency as to commercial motivations behind posting. In addition to undisclosed paid arrangements, the ACCC is also looking for testimonials that withhold essential or qualifying information. Such conduct falls under Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth)), where ‘misleading or deceptive conduct’ can attract penalties of up to $2.5 million.
While it is common knowledge that influencers can be paid or sponsored for advertising products, the ACCC is concerned that consumers may be disempowered and make less informed purchasing decisions, in circumstances that they are not disclosing that it is a paid or sponsored advertisement. For instance, where influencers, advertisers and brands conspire to create the illusion of ‘organic’ promotion, the aspirational consumer may be left susceptible. This is also the case for smaller influencers, who are able to cultivate more authentic relationships with their audience.
The rationale of the ACCC is that online markets must be efficient and efficiency comes from confidence. Without disclosure by influencers, consumers may see posts as having the integrity of a person’s recommendation behind it.
In the event that you have received a demand from the ACCC, Rostron Carlyle Rojas Lawyers is happy to assist in reviewing your case, responding, and providing advice on your obligations.
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