The Difficulty For Social Media Ad Regulation

Celebrities who promote products on social media are under investigation by the competition watchdog amid concerns they are not making it clear when they have been paid to do so.

The Competition and Markets Authority (CMA) is looking into whether consumers are being “misled” by so-called social media influencers, who can earn tens of thousands of pounds from companies for a single post.

It has written to at least 10 celebrities who it said “can sway the shopping habits of millions” to ask for more information about the deals they have struck to promote certain brands.

The CMA, which has the power to fine or even imprison people who persistently breach consumer law, said it had seen examples of celebrities promoting products or experiences without disclosing that they were advertising in exchange for a fee.

High-profile influencers on social media sites such as Instagram typically use the hashtag #ad to disclose when they have been paid to post about a product. But the CMA is understood to be telling celebrities that the existence of a commercial relationship must be immediately clear upon viewing the post, meaning the hashtag may not be enough.

A search of Instagram by the Guardian found several influencers, including a contestant from a reality TV show, endorsing items including ice-cream, stationery and clothing, without using the hashtag prominently, if at all. It is unclear whether they were being paid to do so.

George Lusty, the CMA’s senior director for consumer protection, said: “Social media stars can have a big influence on what their followers do and buy. If people see clothes, cosmetics, a car, or holiday being plugged by someone they admire, they might be swayed into buying it.

“So, it’s really important they are clearly told whether a celebrity is promoting a product because they have bought it themselves, or because they have been paid or thanked in some way by the brand.”

The celebrities – the CMA said it could not name them – are expected to be called in for interviews as the investigation continues. The watchdog is also asking the public to share their experiences and said it was particularly interested in hearing from anyone who had bought products endorsed on social media.

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