As the ACCC announces a crackdown on influencers, some dos and don'ts of influencer advertising

Dean Gerakiteys, Natalie Coulton
18 Aug 2022
Time to read: 4 minutes

With renewed ACCC focus on businesses using social media advertising, including sponsored posts and influencers, review your key compliance measures to avoid undue scrutiny.

Social media influencers are becoming an increasingly popular means of promoting products and services. As the use of influencers continues to increase, we are also seeing more attention being paid to the way in which the use of such advertising is regulated in Australia. This has come to a head with the ACCC announcing that influencer advertising on social media platforms will be a major focus for the next interim report the ACCC will be preparing as part of its ongoing 5-year Digital Platform Services Inquiry. In its recent media release, the ACCC has indicated that a major concern they will be looking into is the misuse of social media to generate and disseminate misleading or deceptive content.

Given this booming industry is about to be put under the microscope, now is as good a time as any for businesses to brush up on the current legal landscape surrounding influencer advertising and to ensure they are well equipped to utilise influencers in the most effective way.

Where's the problem?

As the ACCC is responsible for enforcing the Australian Consumer Law, it is likely that the key issue of interest will be around the lack of clarity which often surrounds whether a post is intended to be, or may objectively be considered to be an advertisement. This lack of clarity in and of itself can potentially be unlawful if it is misleading or deceptive or liable to mislead or deceive, something the ACCC has indicated is of concern. However, that is not the only way in which sponsored social media posts or influencers can be considered misleading or deceptive.

If you haven't heard about the industry codes, I highly recommend you get on board

Beyond the Australian Consumer Law, there are various other product or industry specific codes which businesses and influencers need to be aware of and abide by when promoting goods or services on social media. Caution is advised for those whose businesses that seek to engage influencers to sell financial products or therapeutic goods, as each of these industries have specific additional advertising requirements. ASIC has recently provided guidance to influencers peddling financial products and the Therapeutic Goods Administration's Advertising Code has recently been updated to specifically address influencer advertising of therapeutic goods.

In addition to those industry-specific guidelines, there are various voluntary, self-regulated industry codes that are applicable to social media advertising using influencers, including those for which the Australian Association of National Advertisers (AANA) is responsible. Advertisers should be familiar with the AANA's more specific Advertising Codes for things such as food and beverage advertising, advertising to children, the use of environmental claims in advertising and advertising of wagering products in Australia but the AANA's Code of Ethics is the most crucial as it applies to all advertisements, including social media posts by influencers.

The AANA Code of Ethics contains the core set of standards and overarching principles with which advertising in any medium must comply. The AANA Code applies to advertising and marketing communications where two key criteria are met:

  1. Does the marketer have a reasonable degree of control over the material?; and
  2. Does the material draw the attention of the public in a manner calculated to promote the product or service?

A key tenet of the AANA Code is that advertising material must be clearly distinguishable as advertising. That is, it should not be disguised as news, independent market research, user-generated content, private blogs or independent reviews.

While there had been some historical scope for debate as to how that applied to social media influencers, that has now been clarified with the removal of the "relevant audience test". It is not enough to simply show that people know the influencer is an influencer and therefore suggest that people would know the post is advertising content.

Haha whoops… I hope no one saw that

Under the AANA self-regulatory scheme, Ad Standards Australia is the body which is responsible for enforcing and determining breaches of the AANA Code of Ethics.

While the AANA Code does not have the force of law and Ad Standards' decisions are not legally binding, if an advertiser does not respond to the determination notice or refuses to modify or remove the content, Ad Standards will work with industry contacts such as media organisations to resolve the issue. In extreme cases, Ad Standards may also refer instances to the ACCC for investigation. Advertisers who fail to comply also risk reputational damage for knowingly refusing to comply which means that the majority of advertisers do in fact comply.

Just for me? You definitely should have!

At this stage there are no laws or regulations specifically directed at regulating social media advertising or influencers. However, the Australian Influencer Marketing Council (AiMCO) has produced a voluntary self-regulation initiative relevant to influencer marketing through its Australian Influencer Marketing Code of Practice . This Code of Practice provides useful guidance on how and when advertisers and influencers should be making relevant disclosures. Rather than being directed only at the output for influencer marketing, this Code of Practice takes a more holistic approach to guiding advertisers through the entire process of contracting with influencers.

Hmm… what else am I forgetting?

In addition to the various laws, codes and guidance documents mentioned above, there are also platform specific policies for each of the social media platforms that specify what is considered branded content and the applicable restrictions that apply to such content, contravention of which may result in content being removed by the platform itself.

Are you ready?

Businesses should consider the following helpful tips when utilising social media advertising or engaging influencers:

  • Don't allow others to make misleading claims – the fact that an influencer is saying it rather than a business does not mean the business will not be liable;
  • Treat social media posts and influencer advertising in the same way as traditional advertising;
  • Monitor and remove any posts that may be false, misleading or deceptive as soon as possible;
  • It should be clear on the face of the advertisement whether the influencer received a benefit for the post;
  • The influencer must have in fact used the product if that is what they are saying;
  • The influencer must genuinely hold the belief which is being advocated;
  • Review any boilerplate agreements for the engagement on influencers and ensure they are up to date;
  • Update and re-run internal training on what is and is not allowed when it comes to social media advertising;
  • Review and update any outdated internal compliance materials regularly; and
  • Be on the lookout for posts or content which isn't clearly marked as being advertising content.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.