08.11.2022

#OZNACZAMREKLAMY – RECOMMENDATIONS OF THE PRESIDENT OF THE OFFICE OF COMPETITION AND CONSUMER PROTECTION (UOKIK)

REASON FOR INTRODUCTION

 

The recommendations of the President of the Office of Competition and Consumer Protection (UOKIK) concerning labelling of promotional content by influencers on social media were developed in order to organise the market for sponsored content on social media, so that internet users get a clear message as to what is an advertisement and what is an objective product review.

 

NEW DEFINITIONS

 

The recommendations of the President of UOKIK include terms that have not been legally defined or whose definitions needed to be updated to fit the discussed issues, i.e.:

 

  • Influencer – an author, person operating on the internet, actively running their social media, communicating with their followers. Through their publications they can influence their opinions, decisions or behaviour. An influencer is an entrepreneur if they derive any economic benefit (not only financial) from their online activity and at the same time run an organised business on their own behalf and on a continuous basis. This also applies if the influencer has not registered a business.

 

  • Social media – electronically provided services, in particular platforms and websites on which users, after creating an account, can publish content in various forms (text, image, video, audio), as well as add friends or follow other users via a browser or mobile app.

 

  • Advertisement – a commercial communication aimed at promoting the sale or paid use of goods or services. Advertisement includes also self-promotion, i.e. the advertising of one’s own products or services. Additionally, commercial communication that is aimed at promoting a brand is also considered an advertisement.

 

  • Advertising agencies – entrepreneurs carrying out advertising activities for or on behalf of other entities, which consist in the preparation of an advertisement concept, advertisement management (implementation of the concept, marketing), promotion of products or services. Advertising agencies may also perform other activities, including acting as intermediaries between an advertiser and an influencer (e.g. in sponsorship agreements).

 

  • Advertisers – entrepreneurs who order advertising or promotion of their products, services or brands in influencers’ social media in exchange for economic benefits (not only financial).

 

  • Observers – people who observe or subscribe to influencers’ social media accounts. The observation does not have to be permanent. They are considered consumers, as their interaction with influencers is not related to their business or professional activity and, based on recommendations and opinions of influencers, they may make decisions regarding, among other things, the purchase of a service or product.

 

LEGAL REGULATIONS

 

Currently, there are no laws that explicitly define the ways in which advertising material should be labelled on social media. However, the law clearly indicates that advertising content must not mislead consumers. With regard to the protection of consumer interests, the following unfair market practices are primarily pointed out:

 

  • Misleading omission – Article 6(1) of the Act of 23 August 2007 on counteracting unfair market practices

 

  • Surreptitious advertising – Article 7(11) of the Act on counteracting unfair market practices

 

  • Act of unfair competition – Article 16(1) item 4 of the Act of 16 April 1993 on counteracting unfair competition

 

COMMERCIAL COOPERATION

 

There are a number of types of commercial cooperation, which differ, among other things, in the way the contract is concluded, the form of remuneration, the advertiser’s impact on the material and the duration of the cooperation. Regardless of these variables, any commercial should be clearly distinguished from neutral information.

 

  • Manner of contracting – it does not matter in what form the influencer enters into an agreement with the advertising agency or advertiser for the content to be considered commercial. It is possible to make the relevant arrangements both on paper and during a conversation, email exchange or instant messaging. Under such understood agreement, the influencer receives remuneration in return for publishing commercial content on their social media. In the contract or its annexes, the parties may define the structure and form of the content.

 

  • Form of remuneration – it does not matter in what form the influencer receives the economic benefit for the content to be considered commercial. The economic benefit may be in the form of monetary or in-kind remuneration

 

  • An increase in sales of the influencer’s own goods or services is also considered a economic benefit.

 

  • Advertiser’s impact on the content – it is irrelevant whether the advertiser has any impact on the content for the material to be considered commercial. The advertiser or advertising agency usually sets the requirements for the final structure and form of the publication. They order the influencer to create the material based on a so-called brief or directly accept it before the publication. This must be marked as advertising material. In a situation where neither the advertiser nor the advertising agency has any influence on the material created by the influencer, and the author posts information about a product or service on their social media for remuneration, this should also be marked as advertising material.

 

  • Duration of the cooperation – the duration of the cooperation is irrelevant to the recognition of the material presented by the influencer as advertising material.

 

SELF-PROMOTION

 

A special type of commercial content is self-promotion, which is an advertisement of the influencer’s own brand. Self-promotion is when an influencer runs a business or owns shares in a company that is involved in manufacturing, providing services or other activities and advertises it on their social media channels.  Self-promotion also needs to be properly labelled as the advertisement.

 

GIFTS – THE PR PACKAGE

 

The recommendations also recognise communications related to received gifts, i.e. PR packages. These gifts are of small value, the influencer does not have to return them or pay for them. The gifted influencer does not receive a separate remuneration for possible promotion of the gift.  The donor does not have any contract with the influencer in any form and does not order any social media publication about the gift from the influencer. The donor has no influence on the content of the material and does not accept it in any way. It is up to the influencer themselves to decide whether or not to publish the content. If an influencer decides to publish a post on social media about a gift received from a brand, the influencer does not have to label the content as advertising material. It is enough for the influencer to inform their followers that they have received the product as a gift.

 

However, if the brand sends the influencer a PR package again, the influencer is obliged to mark the content regarding such a package as advertising material.

 

METHODS OF LABELLING

 

An author should mark the advertising material they publish in a way that is clear, unambiguous and understandable to any recipient. The labelling should be visible both to their regular observers and to those who become acquainted with their channels for the first time. Observers should be able to recognise the advertising nature of the content at the initial stage of viewing them, on both mobile and desktop devices. An influencer should also inform what brand they are advertising.

 

  • In a situation where an influencer is publishing coverage or reviews of an event to which they have received an invitation, they do not need to mark this as advertising material. It is sufficient that they inform their followers that they have received a free invitation. This situation is likely to arise when the material has been created irrespectively of the advertiser’s will and influence.

 

  • In a situation where the advertiser has incurred additional costs for the influencer’s participation in the event, the author should marḱ this content as advertising material.
  • In a situation where an author receives a product purely for testing in order to post a review on their social media channel and then returns it – they do not need to mark this material as advertising material. It is sufficient that they inform their followers who the product is from and that they received it free of charge and must return it.

 

The Office of Competition and Consumer Protection recommends two-tier labelling, i.e. using both the functionality of the platform and labelling on your own (e.g. in the description, in the photo or video, in the narrative of the material).

 

LEGAL IMPLICATIONS

 

Incorrect labelling of advertising content may have legal consequences for the author. This applies both to liability under the provisions outlined in this section and to recourse liability.

 

The following legal consequences towards entrepreneurs (influencers, advertising agencies, advertisers) are possible:

 

  • Public law consequences – the President of the Office of Competition and Consumer Protection may assert the use of a practice that infringes the collective interests of consumers by an entrepreneur who commits unfair market practices. This applies, inter alia, to the misleading omission concerning the labelling of advertising materials or the use of surreptitious advertising

 

  • see Article 24 of the Act of 16 February 2007 on Competition and Consumer Protection

 

  • Private law consequences:

 

  • Consumers against whom an entrepreneur has used an unfair market practice in connection with the labelling of advertising materials may pursue claims set out in Article 12 of the Act on Counteracting Unfair Market Practices

 

  • Entrepreneurs (competitors) with regard to the entrepreneur’s use of an act of unfair competition related to advertising may, in particular, pursue claims set out in Article 18 of the Act on Counteracting Unfair Competition

 

  • It is worth noting that initiation of public law actions does not exclude the possibility of initiating private law actions (and vice versa). This means that consumers or competitors may individually pursue claims against entrepreneurs, regardless of possible investigation by the President of the Office of Competition of Consumer Protection.

 

 

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