Summary
- Businesses must clearly disclose paid partnerships with influencers to comply with UK advertising standards and consumer protection law.
- Contracts with influencers should address content ownership, approval rights, and termination to protect the business.
- Failing to meet disclosure obligations can result in regulatory action from the ASA or CMA.
- This article explains the legal obligations for UK businesses using influencer marketing as part of their commercial strategy.
- It is produced by LegalVision, a commercial law firm that specialises in advising clients on e-commerce and online business law.
Tips for Businesses
Draft a written agreement before any influencer campaign begins. Ensure it covers content approval, usage rights, exclusivity, and disclosure obligations. Keep records of all paid arrangements. Review contracts when campaigns change scope, and confirm influencers understand their own disclosure duties under ASA guidelines.
Influencer marketing is a form of paid advertising where businesses pay or reward social media personalities to promote their products to a large, engaged audience. Because money or benefits change hands, the law treats it as advertising and requires clear disclosure. This article will discuss what influencer marketing is and what legal considerations you should know before engaging an influencer to market your online business’ products.
What is Influencer Marketing?
Influencers are exactly what they say they are; they influence the actions of others. It is commonplace in social media for brands such as online businesses to use an influencer to assist with marketing their brand. These influencers typically have a sizeable following. In exchange for your eCommerce business paying or giving something to the influencer, they will promote your brand’s products. The influencer’s audience is then likely to be ‘influenced’ or swayed and will be more predisposed to purchase your products or services.
The influencer will sell your products or services on their social media channels in return for either:
- money;
- free products from your eCommerce brand; or
- free assistance from your online business.
Due to the popularity of the influencer and the persuasive role they play amongst their fans, an eCommerce business like yours will hope for increased brand recognition and awareness.
Legal Considerations for Influencer Marketing
There are important legal considerations to be aware of when engaging an influencer to market your online brand. Below we explain some of these.
1. Disclosure of Paid Promotion
Engaging an influencer to market your eCommerce brand misleads social media users into thinking that the influencer genuinely endorses your online business. Naturally, this is what you want it to appear as, but in reality, you are giving the influencer something in return for them promoting your product or service. It is, therefore, in the eyes of the law, an advert.
By law, the influencer must let their audience know that you are giving them a payment of some kind in return for marketing your brand. Your influencer needs to do this so their audience is not misled in any way. One way to disclose this relationship is for the influencer to disclose the post is part of a ‘paid partnership’.
2. Compliance With Relevant Legal Bodies
Not only do you need to consider the law concerning influencer marketing, but also the legal compliance bodies that monitor companies’ marketing activities. They are in a place to ensure businesses follow advertising rules and to protect consumers such as your online customers. For example, the Competition and Markets Authority (CMA) can investigate you and your influencer marketer if you mislead consumers, such as by not disclosing the paid relationship. They have the power to take legal action where necessary.
As an eCommerce brand, when engaging in influencer marketing, you must follow the CAP, a code of practice for online advertising. This is where the legal requirement to ensure your influencer marketing identifies this as an advert comes from. Also, the Advertising Standards Authority (ASA) will monitor online social media marketing, which includes engaging online influencers to market your eCommerce business.
3. Avoidance of Copyright Infringement
When you engage an influencer to market your eCommerce brand, you may likely want to incorporate other things in the influencer marketing. For example:
- songs;
- literary works; or
- films.
However, these works often have copyright, meaning you cannot use them unless you have permission from the owner of these or you risk infringing copyright law. Therefore, if the inclusion of the material is crucial to your social media influencer marketing, you should give yourself enough time to gain copyright clearance first.
4. Utility of a Robust Influencer Agreement
Before your influencer commences their campaign, you should get them to sign an influencer agreement. A well-thought-out and ironclad influencer agreement can spell out to your influencer the legal rules they must abide by. It can also highlight the role you will both play in ensuring the influencer marketing campaign is lawful.
This checklist will help you identify areas in your business that may need further protection or assistance to ensure you are legally compliant.
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Key Takeaways
If you choose to engage an influencer to market your products for your eCommerce brand, you must comply with the laws regarding this. Your social media influencer marketing campaign must be identifiable as a form of advertising. You should consider the legal monitoring bodies that check your compliance when using an influencer for marketing. A further legal consideration is the importance of not infringing copyright. Finally, consider a robust influencer agreement to clarify both your and the influencer’s rights and obligations.
LegalVision provides ongoing legal support for businesses through our fixed-fee legal membership. Our experienced eCommerce lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 0808 196 8584 or visit our membership page.
Frequently Asked Questions
Does every influencer post need a disclosure?
Yes – any post where the influencer receives payment, free products, or other benefits requires clear disclosure.
Can influencers use any music in sponsored posts?
No – influencers must obtain copyright clearance before using protected music, films, or literary works.
What should an influencer agreement cover?
It should outline each party’s legal obligations, campaign requirements, disclosure rules, and intellectual property rights.
Can the ASA penalise businesses for influencer breaches?
Yes – the ASA and CMA can investigate and take legal action against businesses that breach advertising compliance rules.
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