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Fair trading duty could build trust in influencers

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Shoppers could get a fairer deal with legal fixes to make it clearer when brands are paying digital influencers to back their products, say leading European lawyers.

Influencers mention, endorse or review products and services through social media accounts like YouTube, Instagram and Twitter, where they have lots of followers.

But as businesses swarm to popular or cool influencers to plug their brands, buyers can be less confident that such seemingly personal tips are the real deal. Influencers are often found out for failing to mention they’re paid to namecheck a brand, which is how most make their money.

Now lawyers suggest legal changes, including a general, positive duty on advertisers, social platforms and influencers themselves to trade fairly, may prevent consumers being misled.

“The goal is to create more fairness in the way the digital influencers’ marketing practices are conducted,” said Brunel University London’s Dr Christine Riefa.

“Brands have always looked to advertising and endorsements from celebrities in particular to boost sales,” she said. “But the spread of online platforms that rely on user ratings to create trust is changing this dynamic.”

Reframing current laws dealing with misleading digital influencer marketing would better protect buyers in this new landscape, she says in a paper published in The Journal of European Consumer and Market Law.

The Unfair Commercial Practices Directive (UCPD), which is the main EU law handling unfair digital marketing, has ‘vital flaws’, the study argues. Another issue is the UCPD only applies to traders or business-to-consumer (B2C), which leaves out many influencers who aren’t considered traders.

Dr Riefa suggests turning this law on its head. Instead of warning buyers to beware, as happens now, lawmakers should ask traders to behave. Existing law makes it the retailers’ obligation not to trade unfairly. Instead, a positive duty to trade fairly makes it the traders’ duty to be fair towards their consumers, rather than to not be unfair. That way, when an influencer is being paid for a mention, which makes them a trader, they have to behave and be honest about their relationships or face legal action. If they don’t, the advertiser also has to take responsibility.

This legal reset would encourage traders – influencers, platforms and advertisers – to treat buyers fairly, rather than cover up misleading mentions. “It marks a well-needed move in consumer law towards a principle-based approach to tackle the challenges of the digital age,” Dr Riefa said. 

‘Towards fairness in digital influencers’ marketing practices’, by Christine Riefa and Laura Clausen, is published in The Journal of European Consumer and Market Law (EuCML), volume 8, issue 2.

Discover more about the Brunel Law School.

Reported by:

Hayley Jarvis, Media Relations
+44 (0)1895 268176
hayley.jarvis@brunel.ac.uk