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Marketing & Strategy

Consumer watchdog to impose hefty penalties on companies and social media influencers

Health Industry Hub | January 24, 2024 |

Marketing & Strategy: The Australian Competition and Consumer Commission (ACCC) conducted an extensive internet ‘sweep’ targeting influencer accounts across major platforms including Instagram, TikTok, Snapchat, YouTube, Facebook, and Twitch.

Focusing on seven sectors, including healthcare, the ACCC invited consumers, businesses, and industry participants to report instances of misleading conduct by influencers. A staggering 150 tip-offs were received prior to the sweep, primarily related to influencers failing to disclose commercial relationships in their posts.

Under the Australian Consumer Law (ACL), embedded within the Australian Competition and Consumer Act 2010, businesses, including social media influencers, are prohibited from misleading or deceiving consumers.

The ACCC identified various forms of misleading conduct in influencer marketing, such as:

  • Non-disclosure of brand relationships in social media posts.
  • Vague or confusing disclosure of brand relationships using terms like ‘sp,’ ‘spon,’ ‘sponcon,’ ‘collab,’ ‘creativepartner,’ ‘ambassador,’ and similar abbreviations.
  • False or inaccurate statements about brands, products, or services.
  • Other concerning conduct such as multi-level marketing schemes and subscription traps.

The report released last month showed the ACCC is concerned that “this conduct is becoming more pervasive over time as the influencer industry continues to grow”. 

To address these concerns, the ACCC proposes a multi-faceted approach involving education, compliance, and enforcement activities. The commission will also release updated guidance material for influencers, brands, and advertisers.

Warning of potential enforcement actions, the ACCC emphasised the importance of compliance with the law. Breaches of the ACL can result in significant penalties, and brands found guilty of misleading or deceiving consumers may suffer severe reputational damage. Social media influencers and brands are advised to ensure their advertising, marketing, and promotional activities align fully with legal standards, particularly in the examined sectors.

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