Platforms, Brands Targeted in UK Clampdown on Hidden Advertising

In the latest move to crack down on unlabeled advertisements on social media, the U.K.’s Competition and Markets Authority (CMA) on Thursday (Nov. 3) published new guidelines for platforms, brands and influencers to follow as part of efforts to help users spot a paid-for endorsement online.

According to the guidelines, any incentivized endorsements must be clearly labeled as advertisements in a way that immediately distinguishes them from other content.

The instructions also include ways that platforms can further encourage better labeling by offering a one-click tool highlighting that a post is an advertisement, for example, as well as promote the use of algorithms that automatically flag potential paid endorsements.

Back in 2020 Instagram committed to a series of changes that facilitate clear labeling of incentivized posts following a CMA probe on the matter.

These included prompting users to confirm if they have been incentivized in any way to promote a product or service when they post about it and presenting them with an opportunity to do so if they have. Instagram also extended its “paid partnership” tool to all users, enabling people to display a label at the top of a post indicating that it is an advertisement.

Taking it a step further, the platform now uses algorithms designed to spot when users might not have disclosed that their post is an ad and report those users to the businesses being promoted.

At the time, Andrea Coscelli, chief executive of the CMA, said that the changes were necessary to eliminate any excuse for businesses to overlook how their brands were being advertised online.

“For too long, major platforms have shied away from taking responsibility for hidden advertising on their site […] this commitment to tackle hidden adverts and overhaul the way people post on Instagram – making it difficult for users to ignore the law – is a welcome step forward,” Coscelli said.

Drawing a Line Between Legitimate, Hidden Endorsements

Influencer endorsements have become a key component of many businesses’ social media marketing strategies. But with countries like the U.K. taking a hard line on undisclosed commercial relationships between content creators and brands, ensuring compliance with the relevant laws is critical.

Related: Meta Unveils New Ad Formats for Reels, Instagram

The issue is especially controversial given the growing number of crypto firms that have turned to celebrity partnerships with the likes of football legend Tom Brady and actor Matt Damon to promote what many argue are risky investments.

Read more: Crypto’s Celebrity Endorsements Attract Customers, Repel Critics

But as seen recently with Kim Kardashian, celebrity endorsements are not without hurdles.

In fact, the media personality — fined $1.26 million by the U.S. Securities and Exchange Commission (SEC) for failing to mention that she was paid to endorse EMAX tokens when she posted about them on her Instagram account — is a cautionary tale for all influencers looking to dabble in the risky field.

Read on: SEC Hits Kim Kardashian With $1.26M Fine for Crypto IG Posts

As a result of the SEC’s action, Kardashian, who has agreed to pay the fine, is not allowed to promote any crypto assets for three years.

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