It seems social media is rather akin to the ‘wild west’ when it comes to advertising.  In a recent case of blatantly false promotion on Facebook, household name and MoneySavingExpert founder, Martin Lewis, had his face used (without his knowledge or consent) on a series of advertisement for financial services which were, shall we say, not as reputable as they appeared to be.  Recognising their role in the equation, Facebook donated £3m to scam prevention measures in return for Mr Lewis dropping a lawsuit against them.  So, this begs the questions, what are the rules surrounding social media advertising, and who is regulating it?

Which entity regulates social media advertising?

One of the main players in the regulation of online advertising is the Committee of Advertising Practice (CAP), which sits alongside the Advertising Standards Authority (ASA); the former is focused on non-broadcast advertising, and the latter on broadcasting.

CAP produces the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (also known as the CAP Code), which must be adhered to by online advertisers, agencies, and media.  The CAP Code applies to a wide range of non-broadcast media types, including newspapers, DVD’s, cinema, street advertising, and (of most relevance to social media), “advertisements in non-broadcast electronic media, including but not limited to: online advertisements in paid-for space (including banner or pop-up advertisements and online video advertisements); paid-for search listings; preferential listings on price comparison sites; viral advertisements”.  The Code defines several rules designed to provide consumer protection, which includes, but are not limited to, ensuring marketing communications:

• are legal, decent, honest and truthful
• obviously identifiable as marketing communications
• prepared with a sense of responsibility to consumers and society.
• respect the principles of fair competition generally accepted in business
• do not materially mislead or be likely to do so
• do not contain obvious exaggerations (“puffery”)
• do not mislead the consumer by omitting material information
• do not mislead consumers by exaggerating the capability or performance of a product.

Influencers are not exempt

On social media and online video platforms, influencers now play a core role in promoting products and services.  Even the smallest mention can cause product sales to go into overdrive; such is the power of these modern-day lifestyle evangelists.  In one such example, a small cosmetics business ‘Primary Pure’ used influencer marketing to triple sales in just one year.  While the reasons for the power of influencers is still being grappled with, it is widely believed that consumers have lost faith in traditional banner advertising and are increasingly likely to trust people.

However, due to the huge attraction of influencer marketing, regulators including the ASA have been forced to provide guidance to ensure influencers do not fall foul of advertising rules.  Its guidance makes clear that content may be considered an advertisement if the influencer was paid, or was given a freebie, or the brand had editorial control.  And if content is technically advertising, the content must make this clear to the audience.  Influencers also need to ensure they back-up any claims made.

Social media and political advertising

Facebook has been heavily criticised in recent years for not taking steps to prevent misleading advertising.  Facebook ads were a key tool for those determined to sway political opinion at the time of the US Elections and the UK EU referendum in 2016.  To tackle this in time for the upcoming EU elections, Facebook says they are putting in place strict checks to ensure the validity of political campaigners and candidates – in a bid to prevent foreign interference.  This is in sharp contrast to the previous rules (or lack of them) which allowed anyone to create and promote targeted ads to alter how people voted.

What happens if you fall foul of the ASA/CAP code?

The UK approach to advertising standards on social media is primarily based on self-regulation.  This means that the ASA/CAP are not legally empowered to enforce adherence to their rules. However, sanctions can be provided.  This includes requiring the advertisement to be amended or withdrawn, issuing alerts to other members advising them to withhold access to advertising space.  CAP can also ask internet search providers to remove paid search advertisements which link to a page on the marketer’s website containing content which breaks the rules.

Beyond this, marketers may face adverse publicity if they fail to rectify or remove advertisements on their websites or other non-paid-for space.  And the name of the individual or business and the identified issue with their advertising may be featured on a dedicated section of the ASA website – note this is specifically designed to appear in search engine results when an end user searches for a company.

In some situations, however, the Competitions and Markets Authority (CMA) (which regulates consumer protection law) may intervene.  If they have evidence of an intention to mislead consumers or failure of an influencer to clarify they are promoting a particular brand, the CMA may request that such individuals or business comply with consumer protection law.  Failure to do so may lead to a large fine or even a jail term of up to two years.  In one such example, Social Chain Ltd, a UK-based marketing firm which leverages social media was found in breach of consumer protection legislation.  The business had been publishing content through Twitter, YouTube, and Instagram but not making it clear that much of the content was in fact paid for promotion for films, games and takeaway and dating apps.  The firm avoided prosecution by offering to engage constructively with the CMA.

In summary

As we stated at the start of this article, social media is still very much the wild-west when it comes to advertising.  It is still fertile ground for misleading and blatantly false promotion.  So much so, the Digital, Culture, Media and Sport (DCMS) Committee (under the auspices of the UK parliament), when tasked with investigating ‘fake news’, concluded Facebook is a ‘digital gangster’.  The British government is now making a considerable push to make ‘Britain the safest place in the world to be online’, and while this is centred around safety, it shows how seriously they are taking the need to provide improved internet regulation.

In the meantime, the truth is, the law is not as clear as it should be when it comes to false advertising within social media.  If you are approached by the ASA or CMA, or any other authority about your social media advertising practises, it is imperative you seek expert legal advice as soon as possible.  Doing so will ensure you understand your legal position, and as a result, can resolve the matter quickly and without financial or reputational damage.

Tanveer Qureshi is a Legal 500 barrister, specialising in ASA compliance, business to business fraud, health and safety, food standards, civil litigation, and corporate crime.  If you require legal representation, please contact directly on 020 3870 3187.