Vloggers and other social media influencers that endorse products to their loyal fans without clearly showing they are backed by brands could be breaking the law and are part of a wider investigation by the UK government’s competition watchdog.
The Competition and Markets Authority (CMA) declined to name the companies under investigation but said its concerns related to whether they had paid for vlogs, blogs or other online content without this being made clear to viewers. Influencers such as Zoella and Tanya Burr are seeing the cash pile in from brands looking to create sponsored content that blurs the line between what is advertising and what’s not, which has already drawn the gaze of the Advertising Standards Authority (ASA) because the practise could make an ad misleading.
Mondelez and Procter & Gamble have both had their vlogger tie-ups banned after the ad watchdog ruled neither ad had been clearly labelled.
“We have found that consumers who use online reviews and endorsements find them valuable, but we have also heard about some practices that may be unlawful,” said Nisha Arora, CMA senior director of consumer at the CMA.
The CMA estimated that less than one in ten UK adults use online reviews and 6 per cent use vlogs and blogs to help them decide whether to purchase a product or service. The findings were taken from the government body’s report into how companies are using a wide range of websites, from video platforms like YouTube to retail site’s such as Amazon, to generate interest in their goods and consequently sales.
Along with uncovering enough to prompt a probe into the brand and vlogger dynamic, the report also unearthed enough to warrant a closer look at whether enforcement action is needed to curb the number of fake reviews as well as the failure of aggregators to publish negative reviews.
Sites such as TripAdvisor and Trustarader have previously been accused of pushing misleading, paid-for or fake reviews in the past. A TripAdvisor spokesman welcomed the report and its recommenations and said it head been doing them for years.
"We agree with the CMA’s recommendation that all review sites should have appropriate fraud detection measures in place," he continued. TripAdvisor has been developing and refining its fraud detection process for more than 15 years, we fight fraud aggressively and our systems and processes are extremely effective in protecting consumers from the small minority of people who try to cheat our system. We have sophisticated systems and teams in place to detect fraudsters, and we have strong penalties in place to deter them.
"We are pleased that the CMA has recognised that online reviews are a hugely valuable, reliable and useful resource, but that bad practices in the wider industry need to be tackled to ensure that consumers are able to get the most accurate information possible.”
The government body has put together a guide outlining how companies can use reviews and endorsements legally.
“Millions of people look at online reviews and endorsements before making decisions such as where to stay on holiday, or which plumber to use,” said Arora.
“We are committed to ensuring that consumers’ trust in these important information tools is maintained, and will take enforcement action where necessary to tackle unlawful practices. We have opened an investigation into businesses that may be paying for endorsements in blogs and other online articles where the payment may not have been made clear to readers. We have also published information for businesses to tell them what they need to do to help them stay within the law.”
The CMA has not set a date for when it will conclude its investigation and publish its findings. It is likely to be 2016 at the earlier.