Pretty people and smiling faces: Understanding the Legal Risks of Paid Influencer Marketing

Sharon Givoni Consulting Internet Law, Social Media

It has been said that influencers offer a level of trust and authenticity that traditional advertising can’t match. It can drive brand success by increasing reach and engagement: make the product appear more credible and even be cost effective especially for small to medium businesses.

However, there is another consideration as well which that using paid influencers to promote your products on social media can pose certain legal risks for businesses.

To this end, the ACCC has assisted by publishing guidelines to help businesses understand the legal requirements for using paid influencers in their marketing campaigns.

Some key risks

One of the key risks of using paid influencers in social media marketing is the potential for misleading or deceptive conduct.

For example, if an influencer is being paid to promote a product, they must disclose this fact to their audience clearly and prominently. What this means will depends on the context and it’s best to get tailored legal advice so that you don’t go wrong.

Further, if an influencer promotes a product that does not meet the standards required under consumer law, both the business and the influencer may be held responsible for any harm caused to consumers.

What can happen?

Businesses that fail to comply with these guidelines may be subject to legal action by the ACCC, which can result in significant fines and other penalties. In addition, businesses may face reputational damage if they are found to have engaged in deceptive or misleading conduct through their marketing campaigns.

What other things can you do to reduce risk?

We provide valuable assistance to businesses on the dangers involved by helping you understand the legal risks involved in influencer marketing, and can provide guidance on how to comply with the relevant legal and regulatory requirements in a way that is tailored to your own business.

And don’t forget clear and comprehensive influencer agreements which can establish a clear understanding between the business and the influencer about the scope of the promotion, the payment terms, and the required disclosures (amongst other things).

Questions to ask yourself – are you on top of the game?

To get you thinking:

• Do you provide the details of the promotion, such as the type of content that the influencer will be creating and the platforms on which the content will be shared?
• Have you clearly set out the payment terms, including the amount and timing of the payment?
• Does the influencer have a legal obligation to disclose that they are being paid to promote the product in accordance with the ACCC’s guidelines?
• What if the influencer does something that is bad for the business or misleading?

Whether they are both micro-influencers or larger, more established influencers, the danger is the same so don’t let yourself slip behind.

What can do to help?

We can help lower your mitigate legal risks by:

• Drafting plain English agreements that comply with the relevant legal and regulatory requirements to be given to the influencers you use;
• Give you general advise on what you need to do so that your advertising and marketing is not misleading or deceptive in any way or in breach of the rules. Please contact us we look forward to hearing from you.

Article by Sharon Givoni, Principal Solicitor
Sharon Givoni Consulting
www.sharongivoni.com.au
www.owningit.com.au

Please note the above article is general in nature and does not constitute legal advice.
This article was written by Sharon Givoni, Principal Solicitor at the law firm Sharon Givoni Consulting (https://www.sharongivoni.com.au/). We do a lot of work in the area of interior design and understand the industry.

Please email us info@iplegal.com.au if you need legal advice about your brand or another legal matter in this area generally.