More than a dozen celebrities, including Alexa Chung and Ellie Goulding, have pledged to change the way they label social media posts after Britain’s competition watchdog clamped down on the practice of stars being paid for endorsing products without disclosing they were being rewarded by the company.
The Competition and Markets Authority (CMA) said it had secured formal commitments from 16 celebrities to state clearly if they have been paid or received any gifts or loans of products that they endorse.
The celebrities, with millions of followers on social media, include the singers Goulding and Rita Ora, the models Chung and Rosie Huntington-Whiteley, the former Coronation Street and Our Girl actor Michelle Keegan, the former Towie actor Mario Falcone, the model James Chapman (known for his men’s fashion YouTube channel), and the TV reality stars Millie Mackintosh and Megan McKenna.
Online endorsements from celebrities or bloggers can help brands boost sales as fans follow their social media channels to see where they go on holiday, what they wear or eat and which products they use. Social media influencerscan earn tens of thousands of pounds from companies for a single post.
However, where they are paid or rewarded to promote a product in their social media feeds, consumer protection law requires them to disclose this. If they don’t, they can be prosecuted by the CMA and fines could then be imposed. Breaking a court order could lead to two years in prison. The watchdog has published a guide for influencers.
The CMA’s chief executive, Andrea Coscelli, said: “Influencers can have a huge impact on what their fans decide to buy. People could, quite rightly, feel misled if what they thought was a recommendation from someone they admired turns out to be a marketing ploy.
“You should be able to tell as soon as you look at a post if there is some form of payment or reward involved, so you can decide whether something is really worth spending your hard-earned money on.”
Warning letters have been sent to a number of other celebrities and influencers, as well as 70 advertising and PR agencies, since the CMA began its investigation in August. It hopes the 16 celebrities who have given formal commitments will lead by example and that others will follow suit. All of them co-operated with the CMA and volunteered to make changes to their practices.
Some high-profile influencers use the hashtag #ad on social media to disclose when they have been paid to post about a product. But the CMA concluded that was not enough as it could be buried among other hashtags and said a commercial relationship must be clearly declared in the post.
The watchdog said three out of five people it had interviewed said they had been influenced by celebrities.
The London-based fashion label Kitri sold out of its £145 Gabriella dress in less than an hour after a fashion blogger posted a picture of it on Instagram.
The CMA said it would investigate further to look at the role and responsibilities of social media platforms. The Advertising Standards Authority is also investigating after a surge in the number of complaints.