Handpicked Media Ltd, a blogging network which promotes the activities of its clients through online content, has become the first company to be subject to enforcement action by the Office of Fair Trading (OFT) under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The OFT’s actions illustrate how the rise of blogging and social networking sites has blurred the boundaries between consumer perceptions of editorial content and advertising features.
Handpicked Media was asked to sign undertakings that it would cease to continue the unfair conduct, having engaged with bloggers who provided editorial coverage on behalf of Handpicked Media’s clients, which was in turn published on a number of website blogs and social networking sites such as Twitter. The OFT was concerned that Handpicked Media did not make it sufficiently clear to consumers that the promotions had been paid for.
A general duty not to trade unfairly was introduced by the CPRs which came into force in 2008. The CPRs provide that a commercial practice is unfair if it is a misleading omission.
It is also unfair to use editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable to the consumer.
The Handpicked media case emphasises that advertising and marketing practices must disclose that they include paid-for promotions or risk being considered deceptive under the CPRs. Similarly, a trader who falsely represents himself as a consumer, by posting reviews on a website which appear to the consumer to be written by a fellow consumer, will also risk action under the CPRs.
The Handpicked Media case is significant in the light of current developments in the European Parliament, which has recently adopted a resolution on the impact of advertising on consumer behaviour. The resolution calls on the European Commission to take action on hidden internet advertising on blogs, forums and social networks. Concerns have been raised over the difficulty in distinguishing opinion from advertising in the form of comments on blogs, forums and social network sites. The European Parliament is concerned about the increase in businesses paying for the dissemination of comments that appear to be written by consumers.
The Handpicked Media case will be of interest to companies which use third-party blogs and advertising to promote their products. Opaque online marketing practices are on the authorities’ radar.