The Competition and Markets Authority (CMA) has secured formal commitments from 16 celebrity online influencers to ensure they will now say clearly if they have been paid or received any gifts or loans of products which they endorse.
The influential celebrities, with large online followings, who have acted in response to the CMA’s concerns, include singers Ellie Goulding and Rita Ora, YouTuber Zoe ‘Zoella’ Sugg, former Coronation Street and Our Girl actress Michelle Keegan and TV reality stars Millie Mackintosh and Megan McKenna.
Online endorsements from celebrities and influencers can help brands boost sales, as millions of fans follow their social media channels to see where they go on holiday, what they wear, which products they use and more.
However, where such stars are paid or rewarded to promote a product in their social media feeds, consumer protection law requires them to disclose that they’ve been paid or incentivised to endorse a brand. Otherwise, they risk giving a misleading impression that a post represents their personal view about a product or service.
“The enforcement action taken by the CMA has seen a number of social media stars pledge to be more transparent when posting online,” said Andrea Coscelli, Chief Executive of the CMA.
“It also sends a clear message to all influencers, brands and businesses that they must be open and clear with their followers. We will also continue our work to secure more improvement in this space.”
American YouTubers Jake Paul and Brian “RiceGum” Lee, who have a combined following of 28.5 million, were recently criticised for promoting an online ‘loot box’ website, which many argue is a form of gambling.
The ‘loot box’ model allows purchase of a ‘box’ or ‘crate’ which promises one item from a pre-defined list of products varying in cost. The product is not revealed until after purchase.
The sales model was adapted from modern video games, in which in-game add-ons are purchased the same way.
Warning letters have been sent to a number of UK celebrity influencers, urging them to review their practices where some concerns have been identified.
Further investigation work will look at the role and responsibilities of social media platforms.