Ad Standards continues to uphold complaints
As at April 2024, according to the Ad Standards Case Reports, 7 advertisers have been the subject of complaints about breaches of the AANA – Australian Association of National Advertisers Code of Ethics in relation to distinguishable advertising, with one complaint involving 8 different posts. With 3 of those complaints upheld, 2 remain listed as not modified or discontinued on the Ad Standards website.
ACCC confirmed to be monitoring Ad Standards adverse findings
In March 2024, the ACCC released its 2024–25 Compliance and Enforcement Policy and Priorities, noting that consumer and fair-trading issues in the digital economy, particularly misleading or deceptive advertising within influencer marketing, online reviews, in-app purchases, and price comparison websites, remain a top priority for the regulator.
The ACCC also noted in their findings of their internet sweep of testimonials and endorsements by influencers, released in December 2023, that the ACCC will monitor adverse findings made by Ad Standards to assess whether they involve ACL concerns, and take enforcement action where appropriate.
When would the ACCC be likely to take action?
With 17 case reports listed on the Ad Standards website with “Upheld – Not Modified or Discontinued” as their determination in relation to the distinguishable advertising obligations under the AANA Code of Ethics, watch this space to see what action, if any, the ACCC takes in the coming period in relation to these ads, determined by the Ad Standards Community Panel to be non-compliant with the relevant self-regulatory code in Australia. The products advertised in these ads span clothing, food and beverage, health products, retail and information technology.
Whilst the ACCC of course cannot pursue all matters that come to their attention, and some advertising of certain products may fall into the jurisdiction of other regulators, the ACCC does have a range of compliance and enforcement tools at their disposal to encourage compliance with the law, and focus on circumstances likely to impact consumers experiencing vulnerability, harm the competitive process or result in widespread consumer or small business detriment.
Are we likely to see the ACCC take further action to stamp out breaches of the Australian Consumer Law in influencer posts?
Whilst proper ad disclosure is considered necessary to build confidence and trust in influencer marketing, and is therefore important for the influencer marketing industry, the ACCC will need to determine whether hidden advertising, as well as other false or misleading statements, in influencer posts are likely to impact consumers experiencing vulnerability, harm the competitive process or result in widespread consumer or small business detriment, and therefore worthy of an allocation of limited regulatory resources to stamp out.
We expect that we will see the ACCC take action in relation to influencer posts in the coming period for the following reasons:
- We still see influencers failing to comply with Ad Standards Community Panel findings despite the potential for damage to a brand’s, agency’s or influencer’s reputation following negative publicity about these adverse findings.
- Non-compliance with self-regulatory codes does not attract any financial penalty to significantly deter non-compliance, and therefore whilst most brands will take steps to ensure compliance, others will continue to fail to do so.
- Influencer content can often reach a large audience, and significant sales can flow to the brand (and their agency) from increased publicity from influencer campaigns.
- It is often evidenced in follower comments on influencer posts and in the conversion rates using influencer codes that followers are influenced to make purchasing decisions based on content uploaded by influencers they admire and trust.
- The ACCC had concerns about posts uploaded by 81% of the influencers they monitored.
Risk is increased in our view where influencers have not been appropriately briefed about the products or services they are advertising, where no formal influencer agreement exists, and where influencer content is not vetted by the brand or their agency for false or misleading statements about the products or services and to ensure that appropriate ad disclosure is evident.
Information contained within this blog post is intended to be general information only and is not in any way intended to constitute legal advice. You should not act or rely on any information found in this blog post without obtaining prior advice specific to your circumstances.
