Influencers on social media

Among all other impacts social media networks have profoundly changed the way in which
marketing information is used and disseminated to promote products and services. In particular,
social networks have contributed to the rise of social media influencers establishing advertising
practices among significant media audience. The influencer profession becomes more and more
popular especially among young people and that is why “Geometry Global” (2017) claims that
social media influencers play in a certain way the role of a trusted individual in the online
community. This new activity accelerated by Internet has also attracted the attention of
regulators. In 2018, the US Federal Trade Commission reminded 90 influencers that they should
disclose any “material connection” with advertised consumer goods, underlining that truth in
advertising also applies to social media”. On February 25, 2020, the Italian Competition
Authority (AGCM) closed its proceedings against the Italian food giant Barilla G. e R. Fratelli
Società per Azioni (“Barilla”) and nine micro-influencers concerning unfair commercial
practices due to unrecognisable advertising on social media. The body did not charge any
infringement in the case accepting that the binding undertakings proposed by Barilla and the
micro-influencers were suitable to ensure compliance with the rules on transparency that
constitute a basis for influencers’ marketing practices.
On 9 October 2020, the Spanish government, Spanish advertisers association (AEA) and Spanish
advertising self-regulatory organisation (Autocontrol) promoting responsible advertising
published the "Code of conduct on the use of influencers in advertising". This is the first
regulatory document related to advertising on social media that refers to influencers in Spain.
The Code will come into force on 1 January 2021 and from that time on the companies affiliated
to AEA or Autocontrol, as well as other companies and influencers that will adhere to the Code,
must comply with its rules. They will have the obligation to refer to the Code when fulfilling
contracts. It is common for influencers to enter into promotional agreements with brands. The
remuneration methods that are applied when advertising a product cover also free products (such
as event invitations, gifts or trips) as means of payment for the influencer.
Any influencer content that is classified as advertising must be clearly identifiable as such by the
tags “ad”, “advertising”, “sponsored”, “in association with”, “thanks to (Brand)”, “(Brand’s)
gift” and “sponsored by”, through separate tags or any other sufficient indication of commercial
purpose. The rule is valid for posting on influencers’ personal accounts and sharing
advertisements on other social media posts. On the other hand, the Code recommends that
influencers do use generic indications (“information”, “legal” or similar), unclear tags such as
“Colab”, “Sponso”, or “sp”, or require an action of any kind from the user (“click here”, for
example).
Potential fines for non-compliance with the Code will be imposed by the Plenary of the Jury of
the Advertising of Autocontrol. For greater transparency the names of companies and influencers
adhering to the Code of conduct will be published.

For more information about the regulation of influencers’ marketing interested persons can visit:

Germany
UK 
Hungary
Czech Republic
Italy
Denmark

Compiled by Media 21 Foundation from:
Media Writes 

SSRN
Galalaw
micro-influencer-marketing