The regulator's guide was issued after it announced it had secured formal commitments from 16 celebrities, including singers Ellie Goulding and Rita Ora, which require them to declare "clearly if they have been paid or received any gifts or loans of products which they endorse". Further warning letters have been sent to other celebrities "urging them to review their practices where some concerns have been identified", the CMA said.
UK consumer protection laws prohibit the use of advertorials – paid-for editorial content that promotes a product – without it being made clear within the content or in images or sounds clearly identifiable to the consumer that the trader has paid for the promotion.
According to the guide, the law "is not prescriptive" about how relationships with brands are declared. However, the guide set out some of the measures that can be taken to ensure social media posts are appropriately labelled when they contain endorsements.
"It is not likely that there will be just ‘one way’ of explaining your relationship to a brand," according to the guide. "The CMA takes the view that ‘Advertisement Feature’ or ‘Advertisement Promotion’, are useful descriptions, but it has seen a range of other wording, (including #Ad, #Advert, and using the ‘Paid Partnership’ tool on Instagram in addition to these hashtags), which convey the appropriate messages simply and effectively."
Simply tagging a brand or business in the text, picture and/or video of a post without additional disclosure was cited as one of a number of examples of practices that the CMA said "do not go far enough to comply with the legal requirements".
Andrea Coscelli, chief executive of the CMA, said: "Influencers can have a huge impact on what their fans decide to buy. People could, quite rightly, feel misled if what they thought was a recommendation from someone they admired turns out to be a marketing ploy. You should be able to tell as soon as you look at a post if there is some form of payment or reward involved, so you can decide whether something is really worth spending your hard-earned money on."
"The enforcement action taken by the CMA has seen a number of social media stars pledge to be more transparent when posting online. It also sends a clear message to all influencers, brands and businesses that they must be open and clear with their followers. We will also continue our work to secure more improvement in this space," he said.
The CMA had announced in August last year that it was investigating a number of celebrities and social media influencers over their endorsements of products and services on the internet.