Are Influencers required by law to disclose relationships?

Legal Blog: Are Influencers required by law to disclose relationships? by Philipa Jane Farley. I offer business support to bloggers and business owners so that they have an easy, fun time safely interacting with their online customer community.

Recently, there has been recognition of the fact that using influencers for marketing often turns out to be best money spent by a brand for advertising.  This marketplace is coming to the fore with established influencers leading the pack and services such as Webfluential opening the door for others and, at the same time, creating standards to regulate and protect the interests of parties involved.  After a bit of looking and learning, I have to ask the question "are influencers required by law to disclose relationships?"

The Consumer's Right to Disclosure of Information

Does Consumer Right number 4, which is the Right to Disclosure of Information, apply in the instance of influencers campaigning on behalf of brands?  I do believe the intention of the legislature was such that this section should apply to agents such as Estate Agents. Unpacked, it covers a few scenarios, but, for the purposes of this information piece, let us look purely at influencer marketing practises and material.  

Does this Right to Disclosure apply in the case of Influencer Marketing?

The business of an influencer is to solicit clients for a person or product through the representations they, the influencer, make in return for remuneration or gain.   An influencer does fall into the definition of an intermediary as described by the CPA:

‘‘intermediary’’ means a person who, in the ordinary course of business and for remuneration or gain, engages in the business of—
(a) representing another person with respect to the actual or potential supply of any goods or services;
(b) accepting possession of any goods or other property from a person for the purpose of offering the property for sale; or
(c) offering to sell to a consumer, soliciting offers for or selling to a consumer any goods or property that belongs to a third person, or service to be supplied by
a third person,
but does not include a person whose activities as an intermediary are regulated in terms of any other national legislation;

But, just because the cap fits doesn't necessarily mean that the law applies.  

Section 27(1) of the CPA relates to the disclosure of information by intermediaries (in this case, influencers).   Let us look at this section closely. You are the intermediary (influencer). You represent a person or product for remuneration or gain. You, in your posts and discussion online, aim to solicit clients for the person or product you are representing.   The Act states:

27. (1) An intermediary must—

(a) disclose prescribed information to—

(i) any person whom the intermediary solicits or agrees to represent with  respect to the sale of any property or services, or from whom the intermediary accepts any property for the purpose of offering it for sale; and

(ii) any person from whom the intermediary solicits an offer, or to whom the  intermediary offers to supply or supplies—

(aa) any service to be performed by a third person; or

(bb) any goods or property belonging to a third person; and

(b) keep the prescribed records of all relationships and transactions contemplated  in this section.

The influencer would be required to disclose prescribed information to an agency/brand rep in terms of s27(1)(a) because the relationship is covered by s27(1)(a)(i).  So, yes, in this scenario the CPA does apply.   Please see the end of this article for the link to the requirements as laid out in the Consumer Protection Act Regulations.

BUT, my opinion is that s27(1)(a)(ii) does not, in fact, cover the scope of an influencers electronic posts to the general public (blog posts, tweets, Facebook posts, etc.).  You post a blog post in which you rave (or not) about an item or an experience - is this soliciting an offer from a person? No. You tweet about your amazing burger at whatever joint (the burger you got for free in return for the tweet) - is this soliciting an offer from a person? No. In either of these scenarios, are you offering to supply services by a third party or goods or property belonging to a third party? No! So, in terms of the relationship the influencer has with the general public, by law, no disclosure of the relationship or of prescribed information is required.

So, LEGALLY speaking, my opinion is that you do not in fact have to disclose your relationship with a brand or agency if you are an influencer in South Africa.  Just make sure your contracts establish jurisdiction in South Africa so there is no argument in a foreign jurisdiction.

But, Ethics?

Yes, ethics. What do marketing and advertising ethics dictate? What is the norm in the blogging world?  Influencers, the norm is disclosure.  There is much written on this topic so I am not going to cover it in detail here.  

My opinion here is that influencers should not be forced to write posts, tweets, etc. in a prescribed manner by an agency or brand if the influencer disagrees with the content.  We start going into grey areas of fraud and false advertising.

I would say that it is reasonable for a brand or agency to ask for a look-see before something is posted, but not to have the final say.  Why did the agency or brand choose the influencer in the first instance?  Because they have a voice and they have reach.  That needs to be trusted.  It is nearly instantly obvious to a loyal follower of an influencer when the voice is forced.  The audience questions the sincerity of the post and the value of the opinion drops.   If the experience is utterly awful, then the influencer should be honest with the agency or brand and rather decline the opportunity if possible to post or comment, unless the brand decides to use this as a learning experience and let the influencer be honest.   Influencers need to stay true to who they are and write about the experience in their usual voice.  

My advice for influencers

Influencers need to have disclaimers on their websites that are easily available to readers that advise readers of the fact that they are asked to review products and experiences from time to time.  Assure the readers (and be honest about this) that you, as the influencer, will always attempt to give an accurate representation of your experience.  When writing your post, politely and subtly include the fact that it was an experience afforded to you by X brand.  You don't necessarily have to do this, by law.  However, it does leave a bad taste in the mouth of the reader when they realise the post was sponsored or paid for and the influencer hasn't made this known.  Also, our local electronic law is fast catching up to international standards and those are, for the most part, that you are required to disclose.

Consumer Protection Act Regulations can be viewed on this link.  Regulation 9 and 10 relate to prescribed information and records as discussed above.

*Please note that this 'blog' post should not be regarded as 'legal advice' and should most certainly not take the place of a legal professional who is advising you on a case as they will be well-versed with the facts of each individual case.