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Fines needed to enforce consumer laws on social media platforms, MPs told
27 January 2022, 11:44
The competition watchdog said it is still seeing a ‘very low level of sanctions’ being applied to influencers who flout the rules.
Fines to enforce consumer protection laws around influencer advertising on social media platforms would be an “important addition” for UK regulators, the competition watchdog has told MPs.
Competition and Markets Authority (CMA) senior director for consumer protection George Lusty told the Digital, Culture, Media and Sport Committee that platforms could do the most to regulate influencer advertising and they have the tools to do it.
But he said: “We’re still seeing across all platforms a very low level of sanctions actually being applied and practiced against influencers.”
He added the CMA believes there should be a focus on platforms to make sure they are meeting their consumer law responsibilities “to make sure that hidden advertising is hidden no more and disclosed properly”.
He called for a “stronger tool kit” to enforce consumer protection laws, adding the general public expects it to be tougher than it is.
Mr Lusty said court action “takes a long time”, and called for the CMA to have the power to fine to enforce its rulings.
He said regulators have collectively tried to address what has become an “endemic market-wide problem” over previous years.
“The market has blossomed, the influencer marketing market has doubled in two years and it’s very, very effective,” he told MPs.
“It’s much more powerful than traditional advertising techniques and its particularly powerful with younger people in persuading them to buy things.
“We think the best way to address that and the way to have the most effectiveness and traction is looking at the point in the value chain where we can achieve the greatest difference.
“At the moment that’s looking at platforms and what they can do with automation, detection, prompts and following that up.”
But Mr Lusty said the problem “still persists”.
He went on: “Therefore we think that platforms need to act on those responsibilities, brands need to do their bit, influencers need to follow the very clear guidance.
“It’s not rocket science – we’ve been able to articulate it jointly with our counterparts in the ASA (Advertising Standards Authority), and we’ve gone out to train people, we’ve put out prompts using user-friendly social media messaging to say what you have to do.
“We think therefore there is a need for more powerful deterrents – and we really welcome what the ASA is doing – but ultimately we think that civil fines would be an important addition to the arsenal of regulators here.”
ASA chief executive Guy Parker said the “scale and pace” of influencer advertising online and its “ephemeral” nature – some Instagram Story posts disappear after 24 hours, making them difficult to capture for monitoring purposes – contribute to difficulties with enforcement.
Just last week, the ASA warned it would name social media influencers in a series of ads on Instagram who consistently fail to tell their followers when they are paid to promote products.
The ASA said despite issuing “repeated warnings”, some popular influencers still fail to reveal when they have been paid to advertise items or services on their platforms.
It also announced it would sanction six influencers – Francesca Allen, Jess Gale, Eve Gale, Belle Hassan, Jodie Marsh and Anna Vakili – for consistently failing to disclose ads on their Instagram accounts, despite repeated warnings and help and guidance on sticking to the rules.
The regulator warned its “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”.