Taxes & Law

EU takes action against surreptitious advertising: Influencer practices in focus

Fatih-Kağan Taşkoparan

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  • EU Commission wants to investigate influencer practices more closely.
  • They will be obliged to be more transparent in future.
  • Together with national consumer protection associations, postings that could be misleading for consumers are to be reviewed.

They give us sports and nutrition tips, recommend cosmetic products such as shampoos, serums or even collagen drinks for a younger look or test the latest tech gadget for us - we all know them: they smile into the camera with their flawless faces, pose in beautiful places and make us dream of an easier and more beautiful life: influencers. What's special about them: Their followers place great trust in them, build a personal connection with them and find their tips particularly reliable. Social media platforms have therefore long been more than just channels for communication and entertainment. They have developed into flourishing marketplaces where both brands and companies can tap into a huge reservoir of potential customers.

Influencer influence personal purchasing behavior - this is of course an advantage for companies that enter into partnerships with social media personalities, but it can also be problematic, especially with regard to minors. It is often impossible to tell whether the post is a personal product recommendation or a paid advertising partnership and whether they have been paid for the recommendation. The European Commission therefore announcedto take a closer look at influencers in the coming weeks and examine their market behavior together with national consumer protection associations.

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Influencer marketing has become according to the EU Commission "developed into a mainstay of the digital economy" and is expected to reach a global value of 19.98 billion euros reach. With the enormous growth of social media, influencer marketing is therefore no longer an optional marketing strategy, but a necessary measure for many companies. The reach of influencers growsand thus also their marketing potential.

The basis of their success is the trust that people place in them. It is their currency for generating publicity for brands, products or services. It is often difficult to tell whether this is advertising or a recommendation. But it is precisely this difference that the EU Commission for... believes is crucial for an informed purchasing decision. This is why it will work together with national consumer protection authorities to scrutinize posts on social media for misleading information and other legal violations. After all, they are ultimately entrepreneurs. Like all companies that deal with consumers, they must also comply with EU regulations, according to the Commission.

 "The influencer business is flourishing and many customers - often young people or even children - trust their recommendations. However, this business model also entails legal obligations. Influencers must also adhere to fair business practices and their followers have a right to transparent and reliable information."

EU Justice Commissioner Didier Reynders 

Mandatory labeling for influencers

This is primarily about transparency for words such as "advertising" or "advertisement", which refer to paid contributions. To simplify this, the EU has developed its own "Influencer Legal Hub" has been set up. It offers video training, written legal briefs, overviews of important European laws and cases decided by the Court of Justice of the European Union as well as links to other relevant national consumer protection authorities, which should help to make social media a transparent space in which a clear distinction can be made between personal preferences and paid opinions.