Advertising directed at consumers by traders is regulated by the provisions of Part 3 of the Consumer Protection Act 2007 on unfair, misleading and prohibited commercial practices that give effect to Directive 2005/29/EC on unfair business-to-consumer commercial practices. These provisions apply to the activities of online influencers who advertise, endorse or review goods or services in return for payment or other consideration. The following provisions of the 2007 Act are of particular relevance to the activities of online influencers:
- section 55(x) of the Act which prohibits a trader from ‘making a representation or creating an impression that the trader
(i) is not acting for purposes related to the trader’s trade, business or profession, when the trader is so acting, or
(ii) is acting as a consumer when the trader is not;
- section 43(3)(e) and (h) of the Act which provide respectively that matters relating to the ‘existence, extent or nature of any approval or sponsorship (direct or indirect) of the product by others’ and ‘the trader’s motives for the commercial practice’ may be the subject of false, misleading or deceptive information under sections 43(1) or (2) of the Act;
- section 46(2) of the Act which provides that a commercial practice is misleading under the provisions of section 46 on the omission or concealment of material information if the trader fails to identify the commercial intent of a commercial practice and the practice would be likely to cause the average consumer to make a transactional decision that he or she would not otherwise make.
These provisions are relevant also to sponsored content. In addition, section 55(q) of the Act provides that the following is a prohibited commercial practice:
using editorial content in the media to promote a product (if a trader has paid for that promotion) if it is not made clear that the promotion is a paid promotion, whether in the content itself or in any oral, written, visual or descriptive representation in the promotion.
In considering the application of the provisions of the 2007 Act to online influencers, it is relevant also to note that the definition of 'trader' at section 2(1) of the Act includes anyone acting on behalf of a trader.