USING YOUR INFLUENCE

Amy Ralston, a solicitor in the specialist Intellectual Property, Information Technology and Data Protection team at Stephens Scown LLP, advises leisure and tourism businesses to make sure they are compliant with consumer protection law when using influencers…

The business has a responsibility to ensure that all posts promoting them are compliant with consumer protection law

Hotels, leisure centres and selfaccommodation businesses (to name a few) are becoming increasingly aware of the benefits of influencer marketing and an influencer’s ability to market directly to the business’ target market. However, gifting an influencer a free stay, offering discounts or other incentives is not without its risks and there are rules that businesses and influencers need to follow. It is important that businesses fully understand the rules and regulations of influencer marketing – one of which is the need to comply with consumer protection law, which can and has been enforced by the Competition and Markets Authority (CMA).

WHAT IS THE LAW?

social media and, therefore, to any advertisement by influencers or socialmedia content creators. A breach of the relevant laws may result in you and/or your business being investigated by the CMA – the CMA has statutory powers to investigate such breaches. This could lead to a case being brought against your business in the civil courts but may also lead to criminal sanctions; it is important that businesses understand these regulations and implement risk-mitigating strategies for online brand promotions (for example through influencer partnerships, or simply providing an influencer a gifted or discounted stay). It is also important to note that the Advertising Standard Authority (ASA) also enforce advertising rules in the influencer market industry, however this article solely focusses on the powers of the CMA. For more information on the ASA powers please check out our article ‘Brands and Influencers - the risks of not complying with ASA rules on Instagram’, which you can find on our website.

OMITTING OR HIDING MATERIAL INFORMATION

The relevant regulations prohibit any commercial practice which omits or hides material information, or which conveys such information in a way which is unclear or confusing to consumers; it is prohibited to use editorial content (such as grid posts, reels, stories, videos etc.) on social media to promote a service where a business has paid in some way (“payment” includes gifted stays or other incentives) for the promotion without making clear in the content that it is advertorial content.

The Consumer Protection from Unfair Trading Regulations 2008 (CPR) aim to prevent unfair practices being used by traders and businesses (including influencers/content creators) when dealing with consumers. They include a general duty for businesses to act in a fair and honest way, which extends to the way leisure and tourism is marketed – including ad content on

WHAT ARE THE CMA’S POWERS?

Under the Enterprise Act 2002, the CMA has the power to investigate if they suspect a breach of the CPR. In the event that a business or individual does not cooperate with the investigation, the CMA can apply to the court for powers to compel compliance with its request for information and disclosure.

If a person (including a company) is compelled to comply with a CMA investigation they are prohibited from disclosing the investigation and/or their involvement; any such disclosures could, at worst, result in imprisonment.

WHO IS RESPONSIBLE?

In the eyes of the CMA, businesses, social media platforms, social media influencer agencies and influencers are equally responsible for ensuring compliance with the CPR. The business has a responsibility to ensure that all posts promoting them are compliant with consumer protection law. There are also other steps that a brand can take to mitigate its risk and demonstrate due diligence.

THE “DUE DILIGENCE” DEFENCE

The “due diligence defence” is available in some circumstances where the offending party has taken steps to mitigate the risk of breaking the law, despite there being a law break. Leisure and tourism businesses should be mindful of their responsibilities when engaging and/or reaching out to influencers (for example, commissioning posts, gifting stays and/ or requesting promotional content). There are proactive steps and processes a business can put in place to reduce and mitigate the risk of breaching consumer protection law. Amy Ralston is a solicitor in Stephens Scown’s Intellectual Property, Information Technology and Data Protection team, specialising in influencer marketing, brand endorsement and the regulation of the same.

To discuss any issues raised in this article, please call 01392 210700 or email influencers@stephens-scown.co.uk