Influencer accountability: The new rules regulating social media marketing

Social media has reshaped many aspects of our life, least not the way advertisers promote their products.

Widely regarded as an unregulated sector, the European Commission has launched a ‘Fitness Check’ to determine whether the existing EU consumer law is adequate for ensuring a high level of consumer protection in the digital environment.

The outcome of a sweep conducted by the European Commission in conjunction with national protection authorities, which examined social media influencers’ disclosure of commercial content, will be incorporated into the Digital Fairness Fitness Check. The Commission aims to complete the fitness check by the first half of 2024.

Italian influencer Chiara Ferragni was thrown in the spotlight last year over a false claim involving a charitable campaign that earned her a €1 million fine for “incorrect commercial practices”. She was also forced to issue an apology on social media.

The influencer teamed up with company Balocco to launch a pandoro with the Ferragni logo, priced at €9, triple its usual price. The box of the product claimed that their sale would translate into a donation to the Regina Margherita paediatric hospital in Turin, but in reality, the donation, of €50,000, had already been made by Balocco alone before they even went on sale, and Ferragni pocketed €1 million with that campaign.

Chiara Ferragni, an Italian influencer, ended up in hot water over misleading claims when advertising Balocco’s special Christmas Pandoro

Ferragni apologised for having made “a communication error” regarding the pandoro and announced that she would donate the million euros she had taken to the Turin hospital.

Speaking to MaltaToday, a Malta Competition and Consumer Affairs Authority (MCCAA) sppokesperson said from a consumer legislation perspective, influencers who generate income from the social media content they create, are regulated by the Unfair Commercial Practices Regulations under Part VIII of the Consumer Affairs Act. These Regulations prohibit commercial practices that mislead consumers or are likely to distort the economic behaviour of average consumers.

“Since influencers’ endorsements often get mixed with everyday content, unlike traditional advertising, consumers are not always aware that the influencers’ content can be commercial,” she said. “By not disclosing the commercial nature of their posts and stories, influencers may give the impression that they are normal consumers using a product when in reality they are acting in the name, or on behalf of a trader. This is prohibited by the Unfair Commercial Practices Directive. Hence, the legal requirement on influencers to clearly disclose commercial content.”

What should influencers be doing when promoting products?

According to the spokesperson, when promoting a product on their social media pages, disclosures by influencers must be clear, visible, prominent and appropriate for the social media platform used.

Disclosures must be used at the start of the post/story and should not require extra clicks to be visible. The disclosures that should be used are #advert or #advertising or the disclosures available on the social media platforms such as ‘paid partnership’.

“Hashtags such as #gifted, #partner, #ambassador are considered unclear and are not acceptable alternatives. Tagging the brand only without a clear disclosure of the adverterial content is also not acceptable,” she said.

What do the influencers think?

MaltaToday reached out to a few Maltese influencers to gauge their views on the new regulation.

Fashion content creator Malcom Gauci said he was aware of the new regulation, voicing his agreement with the new rules.

“Transparency is key, and this regulation aligns with our commitment to providing clear and understandable information,” he said.

Malcom Gauci

The sentiment was shared by singer and influencer Maxine Pace, who said she agrees with the regulation. “I try to abide by the rules as much as I can,” she said.

Influencer Stephanie Agius said regulation helps ensure transparency and fairness in influencer marketing.

“While regulations may pose some challenges, I believe they encourage creativity within ethical boundaries, ultimately enhancing trust with my audience,” she said.

Maxine Pace

Agius also insisted that balancing compliance and authenticity is key. “I maintain authenticity by staying true to my values and interests while adhering to regulations through clear disclosure and honest communication.”

Malcom Gauci said despite the regulation, the content he shares reflects who he is, whether it is sponsored or not.

Steph Agius

“My postings are a genuine reflection of my opinions, and sponsorship doesn’t alter that authenticity. I believe that my audience values my perspective irrespective of the promotional nature of some content. Striving for balance, I consciously ensure a mix of sponsored and non-sponsored content to maintain authenticity and provide a well-rounded experience for my followers. Ultimately, the essence of my content lies in sincerity, regardless of any sponsorship involvement,” he said.

Both Gauci and Agius said they have not noticed any considerable changes in the willingness of brands to collaborate with them.

“It is also my responsibility as a content creator to inform the brands I collaborate with that our partnership will be explicitly disclosed on social platforms,” Gauci said.