Social media influencing can be a lucrative business, particularly in the beauty and wellness space, where influencers can be paid thousands for endorsements. But those who fail to fess up that they’ve been paid for product placement had better beware, as the Australian Competition and Consumer Commission (ACCC) has their eye on them.

The watchdog warns that anyone failing to disclose they have posted products or spruiked services for monetary gain will come under fire.

Call to dob in dodgy influencers

The crackdown follows a callout from the ACCC for consumers to dob in influencers that were not being transparent about product endorsements. The watchdog received more than 150 tip-offs from concerned consumers. Most of the tip-offs from members of the public were about influencers in beauty and lifestyle, as well as parenting and fashion, who had failed to disclose their affiliation with the product or company they were promoting.

“The number of tip-offs reflects the community concern about the ever-increasing number of manipulative marketing techniques on social media, designed to exploit or pressure consumers into purchasing goods or services,” ACCC Chair Gina Cass-Gottlieb said.

“We want to thank the community for letting us know which influencers they believe might not be doing the right thing,” Cass-Gottlieb continued. “Already, we are hearing some law firms and industry bodies have informed their clients about the ACCC’s sweep, and reminded them of their advertising disclosure requirements,” Cass-Gottlieb said.

Deceptive marketing practices under fire

The sweep forms part of the ACCC’s compliance and enforcement priorities for 2022/23, with the watchdog targeting deceptive marketing practices across the digital economy.

As part of the investigation, the ACCC team is reviewing influencer marketing across a range of social media platforms including Instagram, TikTok, Snapchat, YouTube and Facebook, and livestreaming service, Twitch.

The investigation will focus particular attention on influencer marketing in fashion, beauty and cosmetics, food and beverage, travel, health fitness and wellbeing, parenting, gaming and technology.

Influencers are not the only target of the investigation, with the ACCC also considering the role of other parties, such as advertisers, marketers, brands and social media platforms in facilitating misconduct.

Cass-Gotlieb said with more Australians choosing to shop online misleading endorsements can be very harmful.

“It is important social media influencers are clear if there are any commercial motivations behind their posts. This includes those posts that are incentivised and presented as impartial but are not. The ACCC will not hesitate to take action where we see consumers are at risk of being misled or deceived by a testimonial, and there is potential for significant harm,” Cass-Gotlieb said.

Influencers who are found to have misled the public could face enforcement penalties.

“Online markets need to function well to support the modern economy. Part of that is ensuring consumers have the confidence they need to make more informed purchasing decisions,” Cass-Gottlieb concluded.

Want more? Get our newsletter delivered straight to your inbox! Follow Kochie’s Business Builders on Facebook, Twitter, Instagram, and LinkedIn.