Are Influencers Regulated?

We've come along way from sponsorship and advertising deals for sports stars, actors and other celebrities. Now products are marketed by some people whose celebrity and vast wealth comes only from marketing products through posting their own personal 'lifestyle' content in the social media.  Of course, 'traditional' celebrities are also in on the act, and can command even greater sums for their own highly personalised, lifestyle-type endorsements. Yet such personal content is rarely filtered through any type of compliance process, unlike traditional advertising. And the temptation to make a fortune at the touch of a screen often overrides any sense of responsibility on the part of the influencer. As a result, the role of 'influencer' has become one of the most highly regulated in society... and that regulation will only intensify. Please get in touch if you need advice.

It's no surprise that politicians are at pains to see this evolution as wildly positive:

Europeans are spending more time online, meaning that influencers who create content for social media have a greater impact than ever before on the way we perceive and understand the world. In order to ensure that this impact is positive, the EU must provide support to influencers, enabling them to build their media literacy and increase their awareness and appreciation of the rules that govern their actions online. 

- Benjamin Dalle, Flemish Minister for Brussels, Youth, Media and Poverty Reduction

In typical civil law fashion, the EU is calling for positive regulation that will effectively permit the practice of being an influencer and govern how it can be done lawfully.

In common law countries, it's also a case of the law catching up, but the authorities in charge of the marketing rules are less enthusiastic, responding with advertising bans, for example, and now a Financial Conduct Authority prosecution relating to activities between 2018 and 2021 (perhaps more to do with its ban on certain marketing high risk financial derivatives to retail customers). 

The regulators responsible for retail sales (CMA), broadcasting (Ofcom) and advertising (ASA) began jointly targeting 'hidden advertising' in 2020, while the FCA's latest social media guidance is also partly aimed at influencers and other affiliate marketers. 

Yet even the guidelines can be tough to follow, and influencers may well cross the line into other regulated activity, such as the need to register with the FCA for anti-money laundering purposes if you make arrangements with a view to crypto trading, for example.

Please get in touch if you need advice.