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Influencers put on notice as ACCC finds eight in ten violating consumer law

- December 8, 2023 3 MIN READ

 

The Australian Competition and Consumer Commission (ACCC) has found an alarming number of influencers are continuing to mislead consumers by failing to reveal paid partnerships and sponsorship agreements.

A recent sweep by the watchdog found 81 per cent had breached Australian Consumer Law due to misleading advertising. The review spanned seven sectors, revealing a high rate of concern across the board, ranging from 96 per cent for fashion influencers to 73 per cent for gaming and technology influencers.

A key concern raised by the ACCC is the lack of disclosure by influencers regarding their brand relationships in posts, posing a threat to consumers’ trust in online information.

Influencers misleading consumers

The ACCC’s sweep covered major platforms such as Instagram, TikTok, Snapchat, YouTube, Facebook, and Twitch, encompassing influencers with both large and smaller follower counts.


According to ACCC Acting Chair Catriona Lowe, the figures suggest a pervasive non-compliance issue across the industry.

“Many of the influencers we reviewed did not make adequate disclosures in their posts where it appeared they were receiving payment, gifts or other incentives to promote brands, products or services,” Lowe said.

Another common issue was influencers using vague or confusing language to disclose advertising, such as ‘sp’ and ‘spon’ instead of ‘sponsored’.

“We found that many influencers were formatting their posts to hide their advertising disclosure or make it difficult for consumers to notice it. “Under the Australian Consumer Law, businesses must not mislead or deceive consumers. This applies to influencers engaging in trade or commerce, as well as brands and marketers using influencers to advertise online, Lowe said. “Influencers and brands may break the law if they do not take reasonable steps to ensure consumers are not misled to believe that sponsored posts are genuine.”


To address these concerns, the ACCC plans to release guidance in early 2024, reinforcing the obligations of influencers and businesses under the Australian Consumer Law to disclose advertising in social media posts.

Influencers are reminded to explicitly disclose promotional content, avoid misleading product claims, and refrain from using deceptive advertising practices. Businesses are urged to ensure influencers understand their obligations and exercise caution when providing scripts for posts. The ACCC asserts its commitment to monitoring influencers and businesses, with potential enforcement action for continued non-compliance.

Manipulation of online reviews an issue

In a parallel sweep targeting fake or misleading online reviews, the ACCC discovered that 37 per cent of the 137 businesses reviewed engaged in concerning conduct.

Industries with the highest proportions of potentially fake or misleading reviews included household appliances and electronics, beauty products, and home improvement and household products and services.

The ACCC identified a prevalence of businesses using third-party professional reviewers and review removalists to manipulate their online reputation. A total of 24 businesses offering services to create fake reviews, remove negative reviews, and control the display of reviews were scrutinized.

Lowe stressed that businesses manipulating reviews to mislead consumers are in violation of the Australian Consumer Law. Ongoing monitoring of businesses and review platforms is planned, with a focus on ensuring transparency in the incentivisation of reviews.

Lowe advises consumers to exercise caution and be vigilant for signs of potentially fake reviews, such as sudden spikes in positive reviews, generic language, and reviews lacking specific details.

Enforcement measures coming

The ACCC plans to leverage the findings from its online reviews sweep to shape future education, compliance, and enforcement activities.

“The next steps in our continuing scrutiny of these important parts of the online economy include developing strong guidelines for online operators so they clearly know what we expect, before a renewed focus on enforcement,” Lowe said.

“Influencers and businesses need to review their practices and improve compliance with the Australian Consumer Law to ensure consumers can trust the information they find online.”


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