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Influencer marketing has transformed how businesses promote their products and services, and the UK is no exception. With their substantial online presence and engaged followers, social media influencers have become powerful marketing tools for brands. However, setting up an influencer business comes with various legal considerations that must be addressed to ensure compliance with relevant laws and regulations. This article will delve into some of the key legal considerations that individuals and companies must know when venturing into the influencer industry.
1. Advertising Standards Authority (ASA) Regulations
In the UK, influencer marketing falls under the purview of the Advertising Standards Authority (ASA). The ASA is responsible for regulating advertising across various media, including different social media platforms. Influencers and brands must adhere to these regulations when promoting products or services on their social media channels.
One of the fundamental principles is that all advertising, including influencer endorsements, must be legal, decent, honest, and truthful.
Disclosure of promotional marketing and use of free products is crucial, and the audience must be made aware when social media posts are promotional.
2. Disclosure and Transparency
Transparency is a cornerstone of influencer marketing. Influencers must clearly disclose their commercial relationships with brands or businesses. The use of hashtags like #ad, #sponsored, or #advert are common disclosure methods on social media platforms, such as Instagram and X (formally known as Twitter).
Influencers should also be honest about their experiences with the products or services they promote to maintain transparency. They should only endorse products or services they genuinely support, and their opinions must be authentic.
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3. Intellectual Property (IP) Rights
Influencers often generate content through images, videos, and written posts. It is essential to understand and respect IP rights when using such content.
Influencers must be aware of copyright laws and ensure they have the appropriate rights to use any third-party content, such as music, images, or videos. Using copyrighted material without permission can result in legal repercussions.
Additionally, influencers should consider their intellectual property rights. For example, they may want to protect their content from unauthorised use by others. To this end, they may consider trademarking their brand name or logo.
4. Data Protection and Privacy
Data protection is a crucial legal consideration in the influencer business, especially when collecting and using personal data. Influencers often gather information about their followers for various reasons, including marketing and analytics.
In line with the General Data Protection Regulation (GDPR), influencers must obtain explicit consent when collecting and processing personal data. This includes:
- email addresses;
- names; or
- any identifiable information.
Influencers should also have a clear privacy policy outlining how they collect, store and use data.
5. Taxation
Earning income as an influencer constitutes self-employment or business income, and influencers must pay taxes on their earnings. Registering with HM Revenue and Customs (HMRC) and accurately reporting income is essential. Failing to do so can lead to legal and financial consequences.
The tax considerations for influencers can be complex, as they may receive income from various sources, including brand partnerships, affiliate marketing and sponsored content.
Seeking advice from a tax professional or accountant is advisable to ensure compliance with tax laws.
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6. Contracts and Agreements
Influencers often work with brands and businesses through contracts and agreements. It is crucial to have clear and well-drafted contracts that outline the terms and conditions of the partnership.
Contracts should include details on:
- payment terms;
- content expectations;
- disclosure requirements; and
- other relevant terms.
Having a written agreement helps protect the interests of both parties and can be essential in case of disputes or legal issues.
Key Takeaways
Influencer marketing is a dynamic and growing industry, but it is also subject to various legal considerations. Compliance with the Advertising Standards Authority regulations, transparency in disclosing paid partnerships, respecting IP rights, adhering to data protection and privacy laws, and understanding tax obligations are all essential aspects of running an influencer business. By paying close attention to these key legal considerations, influencers can build a trustworthy brand and maintain a solid foundation for their online presence in the UK.
If you need legal assistance setting up an influencer business, our experienced business structure lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
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