• Startups
  • September 02, 2021

What Are The Legal Considerations in Influencer Marketing?

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By Lawbite Team

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The world of influencers has grown exponentially in the last few years. Endorsements from celebrities, respected commentators and noted business leaders, are now commonplace.

Influencer marketing is now worth more than $13 billion globally. 

If you are a business owner thinking about using influencer marketing, you would need to know about all of the legal considerations that impact influencer marketing such as social media rules and how they can affect you. 

As a business, making sure you are aware of legal issues that can arise in social media marketing is a crucial aspect to the art of modern marketing. Understanding how to comply with laws such as the UK consumer protection law can help businesses protect their company reputation but also the audience that they are marketing.

Influencer marketing can be a tricky concept to understand and many companies are unaware of the laws associated with this variation of marketing.

What is Influencer Marketing?

More and more, influencers are being utilised for marketing and advertising purposes, reflecting the growing world of influencers and social media. 

In influencer marketing, individuals (the influencers) will collaborate with brands to market products or services in exchange for money, free products or services. A business might utilise influencer marketing with the aim of improving brand recognition or raise product awareness. With this comes rules which the influencer and the business needs to abide by. 

When getting involved in influencer marketing it is vital that the influencer is transparent about whether they are being paid to promote the product or service they are advertising. 

This may be indicated by the inclusion of ‘ad’ or ’sponsored’ within the content they create for that particular brand. This is to ensure that their audience is clear that the content is being sponsored. Clear communication between all parties (the business and the influencer) and an understanding of the UK law surrounding influencer marketing is necessary so everyone knows the responsibilities they have.

Many businesses are still unsure about whether the influencer should use the term ‘ad’ when posting on paid posts on social media particularly as it can often change the mind of the viewer. For example, if a blogger is being paid to advertise a product, it can raise the question as to whether it is something that they honestly believe in or whether they are simply posting because they are being paid to do so.

Under influencer marketing laws, specifically Section 2 of the CAP Code which you can read about below, all advertising must be obviously identifiable and consumers should be made aware if a piece of content is an ad before they engage with it. This may be done in different ways across different social media platforms, but sometimes content might be marked with the word ‘ad’ to make it clear to the consumer that a business has paid an influencer to endorse a particular product or service. 

Understanding Influencer Marketing Laws

If you are wondering what the legal constraints in influencer marketing are, you’ll need to understand the importance of influencer marketing laws. 

Businesses and influencers both need to be aware of the legal elements of influencer marketing. This might involve influencer marketing laws associated with the CAP code and CMA. 

  • The CMA (Competition and Markets Authority) is interested in how markets work as a whole and can prioritise action to protect consumers, for example against practices that may mislead large numbers of people. The CMA protects customers against practices which may mislead consumers. The CMA may get involved in influencer marketing to investigate the practices of social media platforms and influencers, such as to make sure influencers are clearly disclosing where they have been paid to endorse certain goods or services. The CMA can take legal action if they think that a business may be misleading or harming consumers through their influencer marketing. 
  • The CAP is a code of practice in the UK which is one of the main regulators of online advertising. They write codes which cover Advertising and Direct & Promotional Marketing which aren’t broadcast, including those used on social media by influencers. Agencies, media and advertisers must comply with this code. The CAP code also applies to PPC (pay for click) ads on search engines (although it does not apply to natural listings). The CAP code may get involved in influencer marketing to make sure that businesses get their influencer marketing right and it is not misleading or harmful towards consumers. Under the CAP code, ads must be obviously identifiable: consumers must be able to recognise that something is an ad. If not, CAP along with the Advertising Standards Authority (ASA) will get involved. 

What Are The Legal Issues in Social Media Marketing?

When it comes to social media marketing, there are legal considerations that businesses, as well as influencers, need to be aware of.

  • Copyright infringement - Copyright is designed to protect the expression of ideas which might include literary works, songs and films. Complying with copyright laws is a vital aspect of influencer marketing.
  • Privacy and Confidentiality - Whilst using social media, the very fact that the audience has chosen to follow an influencer is usually sufficient to communicate with them via the respective social media platform. Although specific rules may apply. However, businesses must secure a clear opt-in to marketing from a consumer, before it is permitted to communicate with them through electronic and other means. Businesses have to collect, use, disclose and store information in compliance with privacy laws
  • Misleading conduct - Consumer protection laws prevent businesses from making false or misleading claims about products or services. For example, if a famous person is used in advertising of a product or service, but is in no way affiliated with that product or the company, this would be misleading conduct.
  • Defamation - This involves content which may damage the reputation of someone or a business. 

There are risks associated with influencer marketing. But these can be mitigated through legal reviews of campaigns, such as obtaining copyright clearances, monitoring of social media sites and implementing a policy within the business regarding digital communication and social media. 

5 Things You Should Consider Before Using Influencer Marketing

As a business, there are various things you need to consider before utilising influencer marketing and social media marketing:

  1. Have an understanding of influencer marketing laws and how this can affect your business.
  2. Make sure you are collecting, using and storing information for influencer marketing in compliance with privacy laws
  3. Make sure both the business and the influencer know their responsibilities in the partnership and what rules and regulations they need to follow. This might be outlined in a contract or partnership agreement
  4. Ensure you are not making any claims in your marketing which could be seen as misleading conduct
  5. Use an influencer who is aligned with the aims, objectives and beliefs of your business. This will ensure a more successful partnership between business and influencer. 

FAQs

LawBite has put together an FAQs section that comprises the questions most often asked about influencer marketing that we haven’t already covered above. ` 

  • How can influencer marketing break the law?

There are various ways influencer marketing might break the law. For example, if both business and influencer are unaware of legal issues associated with influencer marketing and social media marketing such as copyright laws, privacy and confidentiality and misleading conduct.

Businesses and influencers can avoid breaking the law by making sure they are complying with influencer marketing laws associated with the CAP code and CMA. 

  • Who does the CAP code apply to?

The CAP code applies to businesses which use ‘paid for’ ads on platforms like YouTube and other streaming services as well as ads like banners, pop ups and pay per click ads. It also applies to social media posts which are promoted. 

  • What are legal constraints in marketing?

Legal constraints in marketing, specifically influencer and social media marketing, may include privacy and data collection as well as confidentiality, copyright infringement and everything associated with complying with copyright laws. 


You can get legal assistance from LawBite 

As a business owner, there are ways you can ensure you are protecting your business if you’re using influencer marketing. These might include:

  • Handpicking your influencer(s) carefully so you can make sure they are right for your business. For example, do they align with the brand's values in order to portray the brand correctly?
  • Creating a contract or partnership agreement with the influencer which sets expectations for both parties and protects both parties in regard to the partnership. 
  • Including a separation clause in the contract.

LawBite’s mission is to democratise how SMEs get the expert law they need - easier to access, clearer to understand and much more affordable. We connect you with the best lawyers to give you top-class legal advice. If you were enquiring about the legal issues in influencer marketing, we hope this article has been helpful in outlining how you can ensure your business is complying with laws in social media marketing. 

If you have any further questions about legal issues in social media marketing and how LawBite can help, you can read through our FAQs or make an enquiry with us. To learn more about LawBite, you can read our about us page. 

In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.



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