2024 legislation could reshape the landscape for sports influencers
2024 is shaping up to be a bumper year for sport with the Euro 2024 championship and the Olympics taking place alongside the usual sporting fixtures. With this we expect to see an increase in marketing by sports influencers as brands look to take advantage of sporting fixtures to raise their profiles.
With the Digital Markets, Competition and Consumers Bill expected to pass through Parliament in the first half of this year this summer’s biggest sporting events could coincide with the launch of the Competition and Markets Authority (CMA) new powers to sanction brands and influencers that fall foul of consumer laws.
In this article we look at the impact that the Bill could have on influencers and brands during 2024’s summer of sport and the steps that each should take now to prepare for the changes.
Athletes and influencers
Influencers can be any human, animal or virtually produced persona that is active on an online social media platform. Any persona that falls within this definition will be deemed to be an influencer even if they use a different title or descriptor, for example “blogger”, “content creator” or “celebrity”. This means that footballers and athletes are likely to be influencers in the eyes of the CMA, even if they do not think of themselves this way.
Regulation of influencers
Influencers are jointly regulated by the Advertising Standards Agency (ASA) and the CMA. The ASA regulates influencers compliance with the CAP code relating to advertising standards, and the CMA regulates influencers compliance with consumer law, in particular the Consumer Protection from Unfair Trading Regulations 2008 (CPR).
Most regulation of influencers has focussed on labelling requirements relating to advertising. Both the ASA and the CMA are clear that any promotion of a brand or product by an influencer needs to be immediately clear to the consumer as an advert.
Content is considered to be advertising when the influencer has received “payment” for it. This is not limited to cash payment but can be any kind of incentive received by the influencer, or any commercial relationship with between the influencer and a brand. This may include being a brand ambassador; receiving a discount or commission; receiving free products, invites or services; holding any position in the company; or collaborating with the brand to produce an “edit” or “collaboration”.
Current enforcement powers
A breach of the relevant standards or laws can lead to the influencer or the brand being investigated by the ASA or CMA. The ASA has powers to “name and shame” influencers for breaches of the CAP Code and to refer influencers who persistently breach the code to Trading Standards if they consider that the breach amounts to a breach of consumer law.
Meanwhile the CMA has statutory powers to investigate suspected breaches of the CPR and to bring court action to enforce any breach and compel the brand or influencer to comply.
Enforcement powers proposed under the Digital Markets, Competition and Consumers Bill
The Bill will significantly increase the CMA’s enforcement powers in this area. The Bill gives the CMA new powers to:
- Directly investigate any suspected infringements of the CPR as well as any practice which it believes may harm the wider interest of the UK consumer;
- Establish breaches of the law and issue “enforcement notices” without needing to go to court. This will make the CMA the only regulator with such powers; and
- Impose significant fines on those who breach the regulations. The proposed fines are styled on fines under the UK GDPR and can be up to 10% of annual global turnover, or where action is brought against an individual, up to £300,000.
Impact on influencers and brands
Brands and influencers should take steps now to make sure that they are compliant with influencer marketing laws and guidelines. Both brands and influencers are equally responsible for ensuring that their influencer marketing campaigns are compliant with the CPR’s and, since the Bill doesn’t change the law or introduce any new disclosure requirements, it is unlikely that the CMA will allow a long grace period for non-compliant practices following the Bill becoming law. This means that the CMA’s new powers may come into effect as brands and influencers start to promote content linked to the Euros ad Olympics.
Given the possibility of headline grabbing fines for non-compliance and the negative publicity that goes along with this brands and influencers alike would do well to avoid attracting publicity for the wrong reasons this summer.
For businesses there are a number of steps that they can take to help their brand and influencers demonstrate compliance with the law. These include:
- Having clear guidelines or policies in place and communicated to employees, influencers and their agents on what is expected from them when promoting the brand.
- Consider including clear instructions relating to content creation and influencer’s obligations in any free items which are sent to influencers. It would be prudent to do this even where there is no requirement or expectation that the influencer will use or feature the free gift in their content.
- Backing up guidelines or policies with clear contractual obligations requiring the influencer to comply with the relevant laws and guidelines and, where necessary, setting out consequences for breaching the obligations.
- Making sure that relevant members of staff understand the legal obligations which apply to both brands and influencers relating to influencer marketing. This is likely to include ensuring that relevant members of staff receive comprehensive training to help them to identify non-compliant content.
- Taking a proactive approach to managing influencer marketing, for example by reviewing, and where necessary, making changes to influencer generated content before it is posted and also reviewing content after it is posted and working with influencers to edit or remove non-compliance content.
Meanwhile influencers should:
- Make sure that they undertaking their obligations relating to labelling requirement, and any additional brand specific requirements relating to products or services that they receive.
- Make use of advertising disclosure tools on social media platforms, but be aware that the ASA and CMA have made clear that relying on the disclosure tools along may not be enough.
For more information on how the bill might affect you or your business, contact one of our specialist sports solicitors or request a consultation.
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