In recent months, the ASA has been stepping up its campaign to “persuade” influencers to indicate more clearly whether their posts are advertising or not, culminating in its recent launch of a “wall of shame” where it will name influencers who break the rules. Both the CMA and the ASA have provided specific guidance for influencers over the past couple of years, as well as more general guidance on ensuring that advertising is identifiable as such.
As well as being dealt with by the CAP Code, the position is regulated under the Consumer Protection from Unfair Trading Regulations 2008, which derive from the Unfair Commercial Practices Directive 2005/29 (UCPD). The Regulations state that an advertisement in the form of editorial content, which does not clearly disclose that it is promotional in nature, is not permitted and is in fact a commercial practice which is considered to be unfair in all circumstances. In addition, EU case law makes clear that advertisers must indicate clearly where they have paid for editorial content where that content is intended to promote their products or services.
The Court of Justice of the European Union was recently asked to interpret the words “paid for”, which is often used by advertisers to describe branded content that it has paid for. The Advocate General has now issued an opinion in advance of the final judgment of the court being delivered. Although the UK courts are no longer bound by EU case law, it is likely to be of persuasive value, given that the UK law largely mirrors EU law, and because the CMA and ASA are so interested in this area. It will also be of interest to our readers in Ireland, whose ASAI has also been grappling with the issue of influencers.
The case arose due to an article published in the magazine GRAZIA back in 2011. It invited readers, under the title ‘reader offer’, to an ‘exclusive shopping evening’ at the clothes store Peek & Cloppenburg, The German courts referred the case to the CJEU, asking if “payment” only applies where monetary consideration is provided for the use of editorial content in the media to promote a product, or whether the term “payment” covers other kinds of consideration (such as promotional gifts and experiences for customers), irrespective of whether this consists of money, goods, services or assets of any other kind.
The German court also asked if the legislation presupposes that the trader provides the media operator with a non-cash benefit as consideration for the use of editorial content. If so, will that non cash consideration be presumed to be present where the advertiser makes available assets protected by IP (eg advertising images or images of store frontage) for the media company to use in editorial content , where both parties contribute to that editorial content, and it will ultimately lead to the promotion of the advertiser's products or services ?
Advocate General’s opinion:
The Advocate General proposed that the Court should rule as follows:
• The provisions in the UCPD mean that, where editorial content is used to promote a product, that promotion is ‘paid for’ by the trader including where that trader has provided the media operator with a benefit which consists of goods or services or assets of any other kind.
• Such a benefit with an asset value must constitute consideration for the use of the editorial content to promote a product, so that there must be a definite link between that benefit and that promotion.
• In particular, such a link exists where a media operator provides information on an advertisement organised in conjunction with a trader which, in turn, to promote that product, makes available to that media operator the rights to use images which contain shots of its stores and of the products offered for sale by that trader.
The opinion therefore suggests that “payment” should be given a very broad interpretation, and will include non cash benefits such as promotional images.
"a benefit with an asset value provided by the trader to the media operator constitutes consideration for the use of editorial content to promote a product, and therefore there is a definite link between that benefit and the promotion of the product"