CMA pursues #transparency for consumers across digital markets

Upon becoming a mother, I discovered a whole new world (aka fell into the rabbit hole) of mummy bloggers and vloggers who are happy to share their tips and tricks for parenting and even more keen to demonstrate the snazzy kit they do it with. I used to wonder how they could possibly afford it all, until I started noticing the hashtags (#ad, #spon, #gifted).  These have become more prominent since January when the CMA's consumer protection arm issued guidelines for social media endorsements.  Sixteen celebrities have given binding commitments to be more transparent where they have been paid by a brand or business.

"Influencer" marketing has become a multi-billion dollar industry, driving up sales in a way that traditional ad spend never could (and creating the world's youngest ever "self-made" billionaire in make-up mogul Kylie Jenner).  The CMA has sought to keep up with this new wave of marketing by helping us, the consumer, draw the line between genuine recommendation and paid promotion. The agency is continuing to investigate the role that platforms may play.

Consumers, particularly those seen as vulnerable, are a focus for the CMA. While its powers to enforce breaches of consumer law are currently limited, Lord Tyrie has sought to increase the agency's toolkit, including fines and personal sanctions (e.g. director disqualification).

Companies that work with influencers to promote their brands should be aware of, and ensure that their partners are complying with, these new guidelines.

The uptick in the agency's consumer protection enforcement has had a strong focus on digital markets. The CMA recently took Viagogo to court for misleading customers, and secured undertakings from other secondary ticketing sites. Last month, the agency closed another inquiry into certain practices used by hotel booking sites, including the role that commission plays in the order of search results. As with influencers, the CMA wants it to be crystal clear where a recommendation is paid for, allowing the consumer to take that knowledge into account before making a purchase decision.

Our Competition Law in the Digital Age briefing sets out more detail on the hotels case.