Influencer Marketing Laws

How many times have you been scrolling through your Instagram feed and taken a closer look, or purchased a product, because you’ve seen it in a post with a celebrity? We don’t like to admit it, but a large percentage of us do it.

Social media, glamour, and stars like the Kardashians, Miley Cyrus and Celeste Barber come to mind when you think, ‘influencer’. Influencer marketing is a strategy used by a brand to engage the services of an influencer to promote its product or service on social media in order to build awareness, increase traffic, and generate buzz around a brand. It’s a turbocharged marketing strategy that is powerful. As a brand, if used properly, you can reach your ideal market faster, reach new target markets, and it will boost your reputation and credibility. The exposure can have an immeasurable impact on your brand due to the large following, and often ‘cult status’, of an influencer.

When you hear ‘social media’ and ‘influencer’ in a sentence, you probably don’t think law or legal considerations, right? Influencer marketing laws, whether you are a brand wanting to contract an influencer’s services, or you are an influencer, it’s important to consider the legal implications of such agreements.

Let’s look at some particular legal issues in detail that are relevant in influencer marketing laws.

Failure to disclose the purpose

The Australian Association of National Advertisers Code of Ethics requires an influencer to disclose that a post is a paid endorsement of a product or service. However, this is non-binding and the Code of Ethics does not specify how an influencer should advise an audience that a post is an advertisement.

This is when the Competition and Consumer Act kicks in. This legislation brings ‘misleading and deceptive conduct’ into play, so the seriousness dial has been turned up. By not disclosing that a post is an advertisement and an influencer is being paid to promote the product or service, can be a potential breach of the legislation.

The Australian Competition and Consumer Commission has broad powers here and, at an extreme, can commence court proceedings should it identify a breach has occurred. And, in addition to that, should a party suffer loss or damage as a result of a breach, they can bring a claim for damages.

Influencer Marketing Laws. How to avoid this?

An influencer should identify in a post that it is a paid endorsement. The agreement made between the parties (brand and influencer) should clearly set out how the influencer should disclose the advertisement in the post, for examples through the use of hashtags. The brand should maintain a close watch on all of the posts made by the influencer during the campaign, including comments made under the post by viewers, for possible misleading or deceptive conduct.

Have an agreement in place. 

This brings us to the need for an Influencer Agreement. The parties to the agreement are the brand and influencer, and should set out the following:

– That there is a paid agreement between the brand and influencer for the influencer to endorse the brand’s product or service for a specified period or number of posts

– The payment is in the influencer’s honest opinion of the product or service, and there is no coercion to provide a positive review

– The endorsement should suit the flow of the existing style and brand of the influencer

– The paid post should impact and stand out.

Copyright and intellectual property

Copyright and intellectual property concerns may arise when it comes to who owns the content. Content on social media is complicated as it involves not just the brand and influencer, but also the platform itself.

Copyright, in general, protects the owner or creator of the content. There is a layer of complication on social media, however, as a user of the social platform, you agree to licence the rights for the platform to use the content you create. Between the brand and influencer, however, the influencer agreement should specify any assignment or rights of ownership should the brand wish to claim ownership of the content.

Social media and influencer marketing has taken off like a jet. It has moved so fast that the laws are playing catch up to try and keep up with the pace. The laws in this area are still relatively new so will continue to evolve and mature. As a result, it is a complex area to navigate.

So, next time you see an influencer posting about a product or service, check out how they have disclosed it is a paid advertisement, see what hashtags they have used, see whether it screams advertisement and whether it suits the image of the influencer, and have a read through the comments. Warning though, once you start looking, you won’t be able to stop!

If you have any questions or concerns about influencer marketing laws, contact us today.


Important disclaimer: The material contained in this publication is of a general nature only and it is not, nor is intended to be legal advice. This publication is based on the law as it was prior to the date of your reading of it. If you wish to take any action based on the content of this publication, we recommend that you seek professional legal advice.