Recently, the cosmetics and skin care company Nu Skin made the headlines, due to the AR$ 2.5 million (approx. USD 30,000) fine imposed on it for misleading advertising. Although the sanction resolution has not yet been made public, as reported through the platform argentina.gov.ar, the company Nu Skin Argentina has allegedly breached article 4 of Law 24,240 on Consumer Protection by not providing truthful, clear and detailed information about its products. Indeed, the company would have promised consumers "a full life and a feeling of youth" and promoted its products under stereotypical standards of beauty, which purposely confused aesthetics with health.
In this sense, it should be noted that Regulation No. 4980/2005 issued by ANMAT (Argentinean Food and Drug Administration) establishes the prohibition of advertising messages for over-the-counter medicinal specialties that may cause fear or anguish, suggesting that the health of an individual will be affected in the event of not using the product. Likewise, the Regulation establishes that advertising must not attribute to the product therapeutic, nutritional, cosmetic, diagnostic or any other kind of preventive actions or properties that have not been expressly recognized or authorized by the health authority. Finally, the regulations prohibit suggesting through advertising that a cosmetic product has therapeutic qualities. This regulation is also applicable, in many of its points, to medical devices.
As indicated in argentina.gov.ar, the Secretariat of Domestic Trade of the Nation would have considered that the company’s advertising leads to believe that those who do not meet stereotypical beauty patterns may suffer health problems and that lack of use of its products may lead to different conditions. Furthermore, the specific health benefits of using the company's products would not have been specified in the advertisements in question.
It should not be forgotten that the advertising that Nu Skin carries out in the country is mainly by means of influencers through posts or stories on social media. Just going to Instagram shows countless influencers and celebrities using and promoting the so-called "little device" from Nu Skin. Many of the influencer's communications are spontaneous and their content is therefore very varied.
Is not the main purpose of this article to analyze the merits of the decision or its relevance, since - as we have mentioned before- the complete resolution has not yet been published. However, the case serves as an excuse to remember some of the fundamental principles in advertising and, in particular, regarding the use of influencers as generators of commercial content:
- The promotional activity of influencers is not yet specifically regulated in Argentina. There is a Bill for a "Legal Regime for Influencers" that was filed in 2020. The Bill establishes a legal framework for the influencers' digital advertising services, including an enforcement authority, administrative sanctions, and an extraterritoriality criterion.
- For the time being, the general regulations on advertising are applied to commercial communication or advertising by influencers, including Law No. 22,802 on Commercial Loyalty and Law No. 24,240 on Consumer Protection.
- In 2020, the Advertising Self-Regulation Council (CONARP) launched a guide on the use of influencers in commercial communication whose fundamental principles are: the veracity and reliability of advertising messages; transparency when informing that the influencer's message is, in effect, content paid for by the brand for which a consideration has been obtained; and the authenticity of the testimonials or statements of the influencer or third parties that appear on their platform.
- Although the applicable regulation does not require the identification of advertising through the use of #advertising or the like, its need could be inferred from the application of Article 4 of the Consumer Protection Act in that the information provided to the consumer must be "clear, truthful and detailed."
- The corporate social responsibility of brands should not be optional. It is evident that brands play a major role with a clear impact on society. For this reason, it is important that they enhance the diversity of voices in relation to their commercial communication and that they supervise the content generated by them, especially when the brand does not intervene directly in the creation of said content.
- The claims approval protocol for traditional advertisements (as is known, the claims of traditional advertisements usually go through several filters, including authorization from marketing, regulatory and legal teams) should be replicated with the same severity in the control of claims carried out by the influencers hired by the brand. If the brand in traditional advertising cannot substantiate that, for example, the use of a product “rejuvenates”, neither should the influencer be able to say so in a commercial communication on Instagram.
The lack of effective control over the content generated by third parties, the absence of contracts that specify the obligations of the brand and the influencer, as well as their responsibility in case of non-compliance, can lead to errors that not only have an economic impact, but can also negatively affect the reputation of the brand. By way of closing, covert commercial communication, through influencers who pretend to have no relationship with the brands they promote and brands that pretend to have no connection with the influencers with whom they have a material connection, would no longer seem to be a legitimate alternative.
A cosmetics and skin care company made the headlines, due to the fine imposed on it for misleading advertising. The company would have promised consumers "a full life and a feeling of youth" and promoted its products under stereotypical standards of beauty.