Spon cons: ACCC says 81% of influencers could be breaching consumer law

Australia’s consumer watchdog says social media influencers continue to push the boundaries of consumer law, raising the prospect of penalties against online personalities and small businesses that intentionally conflate organic posts with paid advertising.

The Australian Competition and Consumer Commission (ACCC) reshared the results of its recent social media ‘sweep’ on Thursday, revealing persistent issues in the influencer marketing space.

Earlier this year, the watchdog asked members of the community to report influencers making content that pushes the boundaries of Australia’s paid advertising rulebook.

This included influencers sharing posts or content across Instagram, TikTok, Snapchat, YouTube, Facebook and Twitch.

An astonishing 81% of 118 influencers had actually made posts that raised concerns under Australian Consumer Law, the ACCC found.

Influencers in the fashion space exhibited the most concerning behaviour: 96% of fashion influencers included in the sweep made concerning social media content.

The influencer categories examined by the ACCC’s sweep. Source: ACCC

The ACCC said many of those concerns stemmed from the labelling of sponsored content.

Marketing and promotional materials must be clearly distinguishable from regular, everyday social media posts.

But influencers are still using the term “spon” in captions and tags, instead of the clearer term “sponsored”, which indicates a brand has paid the influencer to feature their product or service.

Ongoing “scrutiny” from ACCC

The proportion of influencers making concerning posts shows the need for greater communication about their obligations under Australian Consumer Law, said ACCC acting chair Catriona Lowe.

“Influencers and businesses need to review their practices and improve compliance with the Australian Consumer Law to ensure consumers can trust the information they find online,” she said.

Some education resources for influencers already exist.

The Australian Influencer Marketing Council has prepared a one-page cheat sheet for influencers about how to remain compliant with Australian Consumer Law.

However, the results of the sweep indicate the ACCC must do more to inform influencers — and the businesses that secure their services — of their obligations.

“The next steps in our continuing scrutiny of these important parts of the online economy include developing strong guidelines for online operators so they clearly know what we expect, before a renewed focus on enforcement,” Lowe said.

The ACCC will engage with influencers and representative groups when compiling those resources, with the new guidance to be released in early 2024.

Despite the prospect of new information packs, the ACCC reserved its right to take stronger action in the face of serious and persistent violations of Australian Consumer Law.

“The ACCC will continue to monitor influencers and businesses and where we see continued non-compliance we may take enforcement action,” Lowe said.

The ACCC’s focus on influencer compliance is backdropped by the significant effect those influencers have on Australian spending habits.

In its latest report, e-commerce analytics firm Power Commerce found that 77% of surveyed Australians turned to social media influencers for inspiration about their next fashion purchase.