“#ad” Is Not Enough - Influencers Under Scrutiny

There is no doubt that sponsored content on blogs, Instagram or Facebook constitutes advertising or - in some cases - hidden advertising. Much depends on whether they are properly labeled and whether they can mislead consumers. At the end of September, the Polish Office for Competition and Consumer Protection instigated an investigation and intends to take a closer look at the industry. 

 Influencers have long been working with well-known (and yet unknown, niche) brands to promote their services or products. Such activity constitutes advertising activity and is subject to general rules governing advertising in Poland. These rules are set forth in several major laws, including the Competition and Consumer Protection Act, the Broadcasting Act or the Act on Counteracting Unfair Market Practices. In addition, separate regulations dedicated to specific areas apply - depending on what is the subject of the advertising content. This, in turn, makes it necessary to assess the legality of an advertising message on a case-by-case basis, in the context of a given area of regulation: banking, telecommunications or food law. Nevertheless, the basic rules remain valid regardless of the industry and product (service) being advertised. In the case of influencer marketing, it is extremely important that the advertising content is clearly marked as advertising or as material being sponsored. 

Influencer marketing is doing well

An industry survey was conducted in April 2020 to review the impact of the coronavirus pandemic on the influencer marketing market. Its results indicate that 39.6% of advertisers do not intend to make major changes in their influencer marketing plan. This was the most common answer. The second  is "I stopped my activities" - 27.5% of respondents gave this answer. On the other hand, 24.8% of respondents intend to expand influencer activity soon.

Investigation pending

In September 2021 the President of the Office for Competition and Consumer Protection (OCCP) instigated an investigation procedure, the aim of which is to examine the influencer marketing market and to develop guidelines for those who earn money when promoting products in social media. The Office will verify the entire sector in terms of rules which in practice governs the cooperation of influencers with brands and advertising agencies and the transparency of the message for other users of the network. The Authority will examine whether content in social media is clearly and legibly marked as advertising, whether such marking is visible, for example, whether it is visible only after scrolling the page or is hidden under some abbreviation. If such marking is not visible the Office will check what is the reason for influencers' negligence, e.g. whether it is not requested by sponsors. A lot of commercial content on influencer profiles on Instagram, Youtube, Facebook or other social media is not marked as advertising at all. Others are marked insufficiently, for example only by the hashtag “#ad”, which for a Polish Internet user may be incomprehensible - indicates the Office.

In connection with the initiated proceedings, many youtubers and influencers have already received letters from the Office asking them to submit copies of contracts concluded with brands and advertising agencies. The investigation is conducted ad rem and not against specific entrepreneurs. The investigation will cover many industry players, and they may expect summons from the Authority in the near future. According to the provision, failure to provide information requested by the President of OCCP in the course of such proceedings or providing misleading information is punishable by a fine of up to EUR 50 million.

Unfair hidden advertising 

Paid promotion of products and services without clear indication that it constitutes sponsored content violates the prohibition of hidden advertising and may be deemed an unfair market practice and in some cases also an act of unfair competition. The Office recognizes that influencers have a huge influence on Internet users, especially young ones. If they promote a product, there is a good chance that fans will be eager to follow them and buy it. It is unfair when an influencer in reality is paid for his post, but makes an impression that he is sharing a private opinion. Sponsorship should be understood broadly - the payment does not have to be money, it can be other benefits such as a trip or testing luxury products. Consumers should be clearly informed about all such situations - points out the President of the Office for Competition and Consumer Protection.

Advertising, advertorial, or objective review? 

An issue similar to hidden advertising is the so-called advertorial technique used in the press, i.e. a sponsored article. Apart from the provisions of advertising law, activity of journalists is additionally subject to restrictions set forth under the Press Law. Article 12 of Press Law clearly provides that a journalist may not engage in hidden advertising activity that involves obtaining a financial or personal benefit from a person or organization interested in publication of the advertisement.

By instigating the investigation the Office wants first of all to put in order the market of sponsored content on social networking sites - so far somewhat neglected - so that Internet users get a clear message what is an advertisement and what is an objective product review. Consumers must not be misled.

First self-regulation in Poland 

The Office emphasized that it counts on the industry's initiative and self-regulation - because apart from a few codes of ethics adopted in the journalism industry, in the case of influencers such self-regulation has been lacking so far. In recent days, the Association of Internet Industry Employers published a guide on influencer marketing - a code of good practice for clients, influencers and agencies. It is the first such self-regulation in Poland. We are extremely interested to see how the industry welcomes it and whether it is applied in practice.