WHY USE SOCIAL MEDIA?
As social media grows and becomes more influential in every day life, companies are tapping into the increased exposure this can give their products and/or brand. Coupled with this, the rise in celebrity endorsements has led to a new phenomenon whereby companies now see social media as a highly effective means to promote their products and brands through the "personalities" of the celebrities they sponsor.
However, with this comes some danger. Whilst it is relatively easy for consumers to identify when a celebrity is endorsing a product or brand through traditional advertising (usually because the promotion is accompanied by heavy branding of that company) with social media, where celebrities personal pages are being used, the distinction between what is advertisement and what is personal opinion becomes blurred. It is this concern that has led the Office of Fair Trading ("OFT") and the Advertising Standards Agency ("ASA") to take decisive action against what they deem to be "deceptive advertising".
REGULATION AND INVESTIGATIONS
Under the Consumer Protection from Unfair Trading Regulations 2008 (the "Regulations"), an individual is specifically prohibited from using editorial content in the media to promote a product where they have been paid to make such promotion, without making this clear to any individual reading that promotion.
Ultimately this means that where an individual is under an obligation (be it contractual or otherwise) to talk about a particular product or brand, or where companies are blogging or tweeting on individuals behalves, this must be clearly disclosed to the consumer reading that blog or tweet.
The leading case on this involved Handpicked Media, a social media agency. Here, the OFT were concerned that Handpicked Media were engaging individuals to publish online content which promoted the activities of Handpicked Media's clients, without sufficiently disclosing to consumers that these promotions had been paid for. The OFT found that Handpicked Media had breached the Regulations as they had carried out commercial practices which:
- Constituted misleading omissions contrary to Regulation 3(4)(b) under Regulation 6 as the promotions did not disclose material information (namely that the promotion had been paid for) or provided information in a manner that was unclear, unintelligible, ambiguous or untimely; and
- Constituted unfair commercial practice contrary to paragraph 11 of Schedule 1 of the Regulations as editorial content had been used in the media to promote a product without making it clear in the content, images or sounds that the promotion had been paid for.
Following the investigation, and as required under the Enterprise Act 2002, the OFT consulted with Handpicked Media to ensure that the identified infringements were not continued or repeated.
More recently, the OFT launched an investigation against Mars over the endorsement of its Snicker bar by various celebrities on Twitter. These tweets were criticised for not initially revealing that they were promoting the chocolate brand, leading to concerns that the celebrities' Twitter accounts had been hacked.
Adequate disclosure of paid for promotions or endorsements via social media has now become a hot topic for the OFT and ASA. As can be seen from the recent furore concerning Mars, a hard line is being taken against companies that are believed to be using social media to advertise products or brands in a "deceptive" manner.
Under the Enterprise Act 2002 enforcement agencies (such as the OFT) are entitled to take civil enforcement action in respect of a breach of the Regulations. It is a criminal offence to breach Regulation 6 (misleading omission) and Schedule 1 (unfair commercial practices) of the Regulations. These offences are strict liability offences (i.e. offences that can be committed entirely innocently) the sanctions for which can either be:
- A summary conviction, to a fine not exceeding the statutory maximum (currently Ł5,000); or
- On conviction on indictment, a fine or imprisonment for a term not exceeding two years (or both).
Generally what we have seen in the recent cases is that the OFT and ASA are more likely to take a "slap on the wrist" approach to enforcement, requiring the companies to ensure that such advertisement is not repeated and placing any offending companies on their "name and shame" watch list.
USING SOCIAL MEDIA
This does not, however, mean that celebrities who are sponsored by companies can never post any content relating to products or brands on their social media pages – it simply means that, where they have been asked to do this by their sponsor (either contractually or otherwise), they need to disclose this fact alongside the relevant post.
To adequately disclose on Twitter, the tweeter needs to include the hashtags '#ad' or '#advert' alongside the relevant tweet.
Recently the OFT and ASA launched an investigation into Mars over whether the use of the hashtag "#spon" in the final tweet (of a series of tweets) provided adequate disclosure for the purposes of the Regulations. The ASA has now confirmed that the use of "#spon" with the final tweet only (which was the only one featuring the product, the other four being simple "teasers") did adequately mark the tweets as marketing communication and the industry codes had not been breached. It can therefore assume that, provided some form of hashtag denoting the marketing nature of the tweet is used (be it #ad, #advert or #spon), this will provide adequate disclosure under the Regulations.
In their Terms of Service, Facebook specifically prohibits individuals from promoting brands, products or services on their pages. This is a move taken by Facebook to try and ensure companies will buy the available advertising space and not simply circumvent this through "posts" on walls.
Interestingly, however, in Facebook's recent IPO, they have indicated that they are looking into inserting sponsored adverts into the newsfeed of users on its mobile app where that user has "Liked" a product. As of yet, there has been no discussion on how Facebook intends to meet the disclosure requirement under the Regulations nor whether the OFT or ASA will take as hard a line against these advertisements as they have against those on Twitter.
The regulations and restrictions on using social media to restrict the endorsement of products do not, however, mean that celebrities who are sponsored by companies can never tweet about that company or its products. Where a celebrity is simply excited about a certain product or promotion, and they are under no obligation from the company to talk about this, they can use their twitter or facebook page in the normal manner without having to make any disclosure.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.