After multiple reports of suspicious endorsements and testimonials surfaced, the Australian Competition and Consumer Commission (ACCC) is investigating over 100 social media influencers. Reuters published a report on this matter, signalling that such deceptive practices are not tolerated by those in charge of consumer protection.
The inquiry will investigate the operations of Instagram and Facebook, as well as Snapchat, TikTok, YouTube and Twitch to determine if marketers are engaging in any unlawful activities. Those found guilty of violating consumer laws in Australia can face penalties that may reach up to AU$2.5 million!
What Are the Allegations?
It has been alleged that some influencers have posted sponsored or paid content without properly acknowledging the fact that they were being compensated for their posts. Paid content on social media can often be difficult for consumers to recognize. This is usually due to inadequate methods such as a hashtag or an asterisk behind multiple hashtags at the end of posts that are not clear enough to alert them.
Apart from not disclosing whether their recommendations are incentivised by financial rewards or family connections, some influencers have also been accused of encouraging their followers to buy certain goods without being transparent about the potential conflicts of interest.
What Does ACCC Say?
The ACCC has recently voiced its concern regarding the alarming frequency of businesses attempting to manipulate reviews on social media in an effort to increase their sales. They have noted how, “social media platforms are increasingly used by companies as a platform for influencer marketing campaigns.” It appears that deceptive practices employed by these firms have become far too common and must be addressed swiftly.
The ACCC also emphasised the importance of protecting consumers from deceptive marketing practices and ensuring they have access to accurate information when making purchasing decisions online. Furthermore, they observed that this kind of behaviour has become much more widespread since the pandemic, as people have progressively turned to and gone digital for their needs, such as goods and services, recreation and learning.
What Can Influencers Do to Avoid Being Penalised?
Influencers should take steps to protect their reputations and avoid legal issues by always disclosing any relationships they have with brands, whether big or small. This includes disclosing any payments, gifts or other benefits that are exchanged for endorsements. It is important to make sure that any sponsored content accurately reflects the influencer’s true opinion about the product or service being endorsed.
In addition, influencers should be aware of their obligations under Australia’s consumer protection laws and comply with all relevant guidelines. The ACCC’s website provides detailed information about these laws, which can help influencers stay compliant and avoid legal issues.
ACCC to crack down on misleading influencer endorsements across social media https://t.co/tUGwDiiMRL— The Guardian (@guardian) January 26, 2023
It’s evident that regulators are taking serious measures to protect consumers from online businesses’ deceptive marketing tactics with the investigation of Australian social media influencers’ misleading endorsements.
With the prevalence of digital sources, it is imperative that organisations such as ACCC take into account consumer protection when making purchases online. This safeguards individuals and fosters a trustworthy atmosphere for all e-commerce transactions.
What the offenders will face in terms of penalties is yet to be determined, but this investigation should serve as a warning to those tempted to use misleading advertising on social media across Australia. Hopefully it will set an example and prevent similar misconduct from happening again in the future.