The U.K.’s competition and consumer watchdog has launched an investigation into social media influencers, it announced Thursday. The investigation by the U.K. Competition and Markets Authority (CMA) will look at whether some celebrities and other social media influencers might be misleading fans by not “properly declaring” when they are being paid for online endorsements.
The CMA said it had already written to a range of unnamed celebrities and social media stars to “gather more information about their posts and nature of the business agreements they have in place with brands.” It will also invite the British public to share their experiences, particularly in cases where they have bought products based on social media endorsements.
Online endorsements from celebrities and other influencers can help brands to boost sales, with millions of fans following their idols via services like Twitter and Instagram or watching their YouTube channels. The watchdog said that where influencers are paid, or otherwise compensated, to promote, review or discuss a product via their social media feeds, consumer protection law requires them to make clear they are receiving payments or rewards to do so.
The CMA’s concern is that if fans are not properly informed, they can be led to believe an endorsement is the star’s personal view, which may not always be true. The watchdog argues these followers might not so easily place their trust in a product if it is clear the influencer has been rewarded to promote it.
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“Social media stars can have a big influence on what their followers do and buy,” said George Lusty, the CMA’s senior director for consumer protection. “If people see clothes, cosmetics, a car, or a holiday being plugged by someone they admire, they might be swayed into buying it. So it’s really important they are clearly told whether a celebrity is promoting a product because they have bought it themselves, or because they have been paid or thanked in some way by the brand.”
Decade-old regulations on unfair trading make it illegal to use “editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable to the consumer.”
The competition authority said it has already seen examples of posts that fail to adhere to standards.