Exploiting the popularity of influencers – advertising without restraints?

Marketing, communication, advertising, media agencies (”agencies”) and brands are constantly looking for solutions to provide users with advertisements which overlap as much as possible with their tastes and interests.

However, the adoption of the GDPR leads to restrictions on the manner in which targeted advertising campaigns are carried out, the media agencies and brands being constrained to find alternatives.

Although the concept of “Influencer Marketing” is not new, being used already for many years by agencies and brands, in the last years this type of advertising has enjoyed increasing popularity, especially due to the efficiency of advertising campaigns carried out through influencers. Moreover, the occurrence of platforms which intermediate the relationship between agencies/brands and influencers also contributed to the accelerated development of this type of campaigns.

Nevertheless, considering the impact that this type of campaigns can have on consumers, the issue arose on how are consumers protected against abuses or practices where the main purpose is the manipulation of consumers, and what obligations do media agencies and/or brands which resort to this type of advertising have. Many examples can be given of influencer marketing campaigns that barely touched the ethics and the law.

What is Influencer Marketing and why is it relevant?

“Influencer Marketing” refers to those advertising campaigns carried out by agencies and/or brands by using bloggers, vloggers or other celebrities from the online environment, who are, according to some business KPIs, the best influencers for some specific audiences. These campaigns are carried out, in principle, on social networks and imply the use of these celebrities for presenting or promoting the goods owned by the brand.

Of course, there are also situations in which influencers act completely independently of any brands, in an editorial context, but due to the impact that certain messages can have, this activity may be considered equivalent with the one in which the act directly for or on behalf of media agencies or brands.

It is important to emphasize the fact that not any popular person is automatically also an influencer. The essence of influencers is the fact that they can influence the public’s perception and can alter the economic behaviour of the consumers to which they address, which also determined more and more media agencies and brands to recur to this type of advertising.

Without any doubt, such an advertising mechanism has significant advantages for media agencies and brands for several reasons:

Filtering a specific audience: Media agencies and/or brands may direct their advertisements to a specific audience, without profiling individuals, simply by choosing a celebrity based on the audience segments to which such celebrities usually address. This approach brings advantages also from a personal data protection perspective because, in principle, in such a case, the media agencies and/or brands will not have any additional obligations with respect to the protection of personal data, since the audience is picked on the basis of the influencer and not by processing profiles. In other words, the responsibility is lower and the efficiency maximum.

However, situations may arise in which media agencies and/or brands will process personal data for the purpose of selecting their audience, even if such campaigns are carried out through influencers. Therefore, it is recommendable to perform an assessment on the data protection obligations of the agency/brand, before commencing any influencer campaign (as in the case of regular campaigns), considering that the risks of non-compliance are significant.

The conversion is significantly increased, because the advertisements are often sent as personal recommendations of the influencer, based on its personal experience, which increases its credibility as opposed to regular advertisements. Consumers often find a role model in the influencers, which makes them more vulnerable to abuses from them, and which may also make them more susceptible to consider the suggestions and recommendations they are provided with.

Considering the significant impact that such a practice may have on consumers, the question arises: is there a specific regulation with respect to these activities or are consumers exposed to such a practice without having any means of protection?

What is the legal framework applicable to influencer campaigns?

At this moment in Romania, there is no specific legal framework which addresses this type of advertising or the conditions and restrictions for carrying out such activities. However, in line with the case law of the European courts (especially the German ones), we deem that the provisions of Law no. 363/2007 against unfair practices of traders in relation to consumers and harmonization of the provisions of the European consumer protection legislation (“Law no. 363/2007”) are relevant. Moreover, the Romanian Advertising Council (“RAC”), a self-regulating organism, has issued a Code of Advertising Practice (“Code”)[1], which addresses the concept of influence and imposes a set of general rules regarding influencer communications, these rules being mandatory for RAC members.

Thus, according to article 4.2 from the Code, “the contractual relationship between the influencer and the advertiser must be clearly and visibly disclosed within the communication. The disclosure must be made for each article, post, video, tweet, etc. at the beginning of the communication”. It is important to emphasize that, in accordance with article 4.1 from the Code, the media agencies and brands which use influencers are responsible for the communication performed by them. In other words, it is mandatory for media agencies and brands to ensure that the engaged influencers know and abide by the rules imposed by the Code, as well as by all other legal provisions.

Furthermore, according to article 7 para. (2) from Law no. 363/2007: “It shall also be regarded as a misleading omission when, […] a trader […] fails to identify the commercial intent of the commercial practice if not already apparent from the context, and where, in either case, this causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise.” Thus, in most cases, influencers omit to identify the commercial intent of the practice, misleading the consumers with respect to the nature of the communication. Although the consumers believe that they are in the presence of a post with a private and personal purpose (e.g. presenting a personal opinion or experience), its purpose is to influence and manipulate the consumers in order to determine them to purchase a product or service. The scope of the provisions of Law no. 363/2007 is broader, because it also covers the situations in which there is no contractual relationship between the influencer and the brands.

When do I become an influencer (trader) under the law?

As also shown by the European case law, especially that of the German courts, when an influencer exploits its image for business purposes, it will always act as a trader and not a consumer. Considering the harmonization at the European level of the legislation regarding unfair practices in relation to consumers, this interpretation is without a doubt also applicable in Romania. However, courts and authorities from Germany, respectively Austria, failed to provide a threshold of followers which would turn a person into an influencer. The Code also does not include detailed criteria with respect to qualifying a person as an influencer.

Thus, the question arises: which are the criteria which must be taken into account when distinguishing between an influencer and a person acting exclusively for private purposes?

As mentioned above, the essence of being qualified as an influencer is the ability to influence the behaviour of consumers and determine them to take a transactional decision which they would not have taken otherwise. In this respect, as long as a person acts within the scope of its private life (i.e. when he/she addressed exclusively to friends and/or family), the number of followers should be irrelevant. What is important is to be able to prove, factually, that the activity of the influencer had a decisive effect (or is susceptible of having a decisive effect) on the behaviour of consumers, whether 100, 1,000 or 100,000.

The law on consumer protection has the purpose to protect each individual consumer and does not only include situations in which the trader’s activity affects a minim number of consumers. In other words, from this point of view, it is not justified to distinguish between regular campaigns and influencer campaigns. Of course, it remains to be seen whether this interpretation will also be adopted by the Romanian courts of law or whether they will set a minim necessary threshold of followers. In any case, a media agency or a brand will not be able to claim that the respective person does not have sufficient influence, especially since the influence they have was the reason why they were engaged by them.

Which are the scenarios in which advertisements must be tagged?

As mentioned in the Code, when there is a contractual relationship between a brand/agency and an influencer, we will always have a tagging obligation, otherwise, both the media agency/brand and the influencer may be held liable. However, not only these posts fall under the scope of the legal provisions.

In this respect, it is relevant to assess the case law of European, especially that of the German courts, because the provisions regarding unfair practices in relation to consumers have been, mostly, harmonized at European level and therefore their reasoning is relevant for the Romanian courts as well. As stated by the courts in Berlin[2], not any post of an influencer will be considered a commercial activity and has to be tagged as advertisement, but only those activities which from an objective point of view “have the purpose of promoting the sale of goods and services”.

When this post represents the beliefs, ideologies or opinions of the influencer, it does not have to be tagged as an advertisement. For example, in a case in Germany, when Vreni Frost, a German influencer, posted a picture with her wearing certain clothing products, referring to the companies which produced them, the court decided that there is a legitimate purpose to inform its readers with respect to their origin, and thus it cannot be qualified as an advertisement. Of course, she was able to provide proof that she personally purchased the products and that they were not received from brands.[3]

Similarly, the Austrian Advertising Council[4] tried to provide a set of essential criteria which have to be analyzed when assessing whether the post of influencers has a commercial nature and thus, it can be qualified as an advertisement. These criteria should also be taken into account by our courts and authorities. The following should be analyzed: (i) the editorial control which the agency or brands have over the content, and (ii) whether there is any kind of compensation for the influencer.

Thus, in practice, it can be distinguished between the following main situations, which are relevant from the perspective of classifying an influencer’s posts:

An influencer is paid or rewarded for promoting or providing positive feedback with respect to the product: in such a situation it will always be considered advertising, with the obligation to tag such a post accordingly. This situation is also taken into account by article 4.2 from the Code and can also infer from the influencer’s definition from the Code. It is important to emphasize that in such a situation, the media agency and the brand are responsible for the influencer, in accordance with the Code;

Influencer receives goods or free samples, but the brand does not have any expectations or control with respect to the content: in such case, in principle, there is no obligation to tag the content. However, when the post has a clear advertising nature (or as mentioned by the Berlin courts, from an objective point of view have the purpose of promoting the sale of goods and services) then these must be tagged accordingly, even in the absence of any implication from the media agency or the brand. In such case we can talk, in principle, of the liability of the influencer for the violation of the legal provisions;

When the influencer buys the goods and the posts represent the expression of its right to freedom of expression: in such case, in principle, there is no obligation to tag the content. As in the case above, an objective analysis must be performed, in order to determine whether the post does not cover, in fact, a strong advertising nature.

Also, article 7 para. (2) of Law no. 363/2007 states that when the commercial nature of an activity is apparent from the context, tagging the content as advertisement is not necessary. In other words, if through the professional nature of the pictures or video posted, the nature of the messages sent or other factual elements, it is clear that such post has the purpose of promoting goods and services, it is not necessary to tag such content. However, considering the fact that, currently, more and more influencers have advanced editorial skills, providing content with the highest standard of quality and professionalism, it will be difficult to distinguish between the situations in which the exception applies and those in which tagging the content is necessary. Thus, in case of doubts with respect to this exception, it is recommendable to tag the content as an advertisement.

How should advertisements be tagged?

According to the Code, the contractual relationship must be “clear and visible” without any details on what this means. More details are provided in the guide issued by the Austrian Advertising Council, according to which the advertisements must be tagged in such a manner that the consumer knows, from the start, that it is an advertisement, for exempla by posting a #advertisement in front of any post on social networks. The same reasoning applies to product placement. These rules are in line with the case law of the German courts which stated that any advertisement must be tagged with the corresponding mention placed in front.

Of course, the advertising nature of the post must be obvious for the average consumer, without him being forced to perform an assessment of the post. In this respect, putting the hashtag “#ad” or a similar mention in a string of other hashtags was considered insufficient by the German courts and may also be considered insufficient from the perspective of the Romanian law. Moreover, when the post is specifically addressed to Romanian consumers, the tagging should be done in Romanian language, otherwise, there is a risk that consumers were not accurately informed.

Finally, influencers and media agencies/brands will have to comply with the provisions of Law no. 148/2000 regarding advertising (“Law no. 148/2000”) with respect to advertisements, especially when such content is addressed to minors. Thus, according to the provisions of Law no. 148/2000 it is prohibited to advertise if: (i) it is subliminal; (ii) damages the respect for human dignity or public morals; (iii) includes discrimination based on race, sex, language, origin, social origin, ethnicity or nationality; (iv) damages the religious or political beliefs; (v) damages the image, honor, dignity or private life of persons; (vi) exploits superstitions, credulity or fear of persons; (vii) damages the security of persons or incites to violence; (viii) encourages a behavior which damages the environment; (ix) favorizes the commercialization of goods or services which are manufactured or distributed in violation of the legal provisions.”

Moreover, when advertisements are addressed to minors, they may not harm them physically, morally, intellectually, or psychologically or take advantage of their lack of experience or credulity. Under the same lines, the Code mentions that “the statements made by the influencers must be truthful, not misleading and verifiable” and in case of “posts about the use of the respective product by influencers, they are to make statements that represent their honest opinions and personal and authentic experience regarding the product, based on the evidence they possess, providing, where appropriate, the corresponding testimonials.”

Conclusion

Although there is no specific legal framework for influencer marketing, this activity must comply with the legal provisions regarding consumer protection, especially considering that the impact it may have is significant. Thus, it is recommendable for media agencies and brands to analyze with utmost care the nature of the posts on social networks, as well as to follow compliance by influencers with the legal provisions regarding tagging, because, based on the specific circumstances, the agency and the brand may also be sanctioned for the violation of the legal provisions. They are also obliged to comply with the provisions regarding consumer protection, in regard to their own activity.

Although we are not close to having a consistent unitary national or European case law in this area, what is important is the fact that the importance and impact of this activity have been acknowledged and the first steps were taken towards regulating this area.

[1] Available at this link. 
[2] See the first court decision of Landgericht Berlin no. 52 O 101/18 from 24.05.2018, respectively the appeal decision of Kammergericht Berlin no. 5 U 83/18 from 08.01.2019.
[3] Idem.
[4] The guide in the German language is available at this link.