Under the social media influence
As more brands turn to social media influencers to promote their product or service, it’s becoming increasingly important for businesses and buyers to understand how the Australian Consumer Law (ACL) applies to sponsored content.
Influencers don’t have to disclose any commercial arrangement regarding the products and services they promote and are free to express their opinions, but companies that have an arrangement with an influencer (either directly or via a third party) can be found liable for the claims that the influencer makes about their product or service.
If those claims are found to be false or misleading, it could leave the trader, not the influencer, liable to prosecution under the ACL.
An ‘arrangement’ doesn’t necessarily have to be in the form of a formal contract or even involve money changing hands. A company providing free products to an influencer could be viewed as an ‘arrangement’ and this can create a potential minefield for businesses.
Companies engaging in this type of promotion should carefully monitor what the influencer is doing or saying to ensure they are not creating a false impression or being deceptive.
Consumer protection agencies can ask traders to substantiate any claims being made about a product or service, including those made by a third party contracted by the company. If a breach of the law is identified, penalties may apply.
Consumers who feel they have been misled by social media posts or by statements made by influencers can lodge a complaint as they would for any form of advertising or promotion, and if complaints are found to be valid, traders may have to offer refunds.
An exaggeration about the qualities of a product or service based on subjective opinions may be allowable depending on the circumstances. The line is crossed when the claim being made is a statement of a fact that is false and deceives the consumer.
Traders can be held responsible for public comments made by others on their social media pages which are false or likely to mislead or deceive consumers.
It may not be good enough to just correct the misleading comments by replying, as the response may not be sufficient to override the false impression created by the original comments. It may be safer to simply remove the comments.
Businesses, particularly those with a large following on social media, should ensure their pages are monitored not only during office hours but after hours as well, so any dubious content is addressed as quickly as possible.
Traders should establish clear ‘house rules’ on their social media pages, and block users who breach them, and monitor their pages to ensure any false or misleading public posts are removed as soon as quickly as possible.
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