The Competition and Markets Authority (CMA) has secured undertakings from Social Chain Ltd, a Manchester social agency, and Woolovers Ltd, a knitwear retailer, following investigations into the use of online endorsements and reviews.
Social Chain – online endorsements
Social Chain claims to be Europe’s largest influencer agency. Between March and July 2015, 19 marketing campaigns the agency arranged are said to have involved undisclosed advertising appearing on social media accounts with a combined reach of around 4 million followers. Social Chain used its own social media accounts, and arranged for widely followed social media personalities, to promote films, games and takeaway and dating apps, without readers being informed that the content was paid-for advertising.
The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) specifically prohibit “using 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 by the consumer (advertorial).”
The CMA takes the view that everyone involved in online endorsements is responsible for ensuring that paid promotions are clearly labelled or identified. It agreed undertakings with Social Chain and also wrote to 15 of their clients and 43 social media personalities who published content for them. The CMA would not reveal who these clients or personalities were.
Woolovers – online reviews
Following another investigation the CMA has secured undertakings from Woolovers to ensure that it will publish all genuine, relevant and lawful customer reviews on its website, and will not suppress unfavourable reviews. The CMA found that over the period from December 2014 to November 2015 Woolovers cherry-picked more favourable customer reviews for publication on its website. Woolovers staff were instructed to approve only a selection of reviews, and none below 4 stars.
The CMA reports and press release make clear that the provision of undertakings by Woolovers and Social Chain is not an admission of a breach of the law.
Both the CMA and the Advertising Standards Authority (ASA) have been active in this area for some time. The ASA has investigated a number of cases of concealed advertising and detailed guidance has been published. The CMA’s guidance is far less detailed but the results of a number of investigations have been published. Brands, agencies, publishers and influencers all need to tread carefully.