Australians are being warned to think twice before believing what they see on platforms like Instagram, TikTok and Facebook, with the consumer watchdog cracking down on dodgy influencer marketing.
The Australian Competition and Consumer Commission (ACCC) put social media influencers on notice on Friday, revealing fears shoppers are being misled by “manipulative” marketing tactics.
ACCC chair Gina Cass-Gottlieb said the regulator was undertaking a sweep of popular social media platforms to identify where influencers were falling foul of deceptive advertising rules, particularly those failing to tell their audiences that they are being paid to promote products.
“With more Australians choosing to shop online, consumers often rely on reviews and testimonials when making purchases, but misleading endorsements can be very harmful,” Ms Cass-Gottlieb said.
“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.”
The crackdown on social media influencers comes amid a massive shift in the way consumers are learning about and purchasing products, with testimonials on platforms like Tiktok, Instagram and Facebook becoming a multi-billion dollar global industry over the past decade.
However, many influencers are failing to disclose their commercial relationships before posting about a particular brand or product, with the ACCC receiving 150 tip-offs about such behaviour after a callout last week, largely relating to beauty and lifestyle businesses.
“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,” Ms Cass-Gottlieb said.
Confused consumers
Technology lawyer Paul Goldman, partner at Adelaide firm Wallmans, said that under Australian consumer law influencers must clearly label advertising and sponsored posts.
“When an influencer goes online and says, ’I think you should buy this product’, if they have been paid to say that, and don’t disclose that, then it is very open to suggest that a consumer would be likely confused [and] think that was their genuine opinion,” Mr Goldman told TND.
“With anything you see online you need to think about what it is and why it’s been posted.”
Ms Cass-Gottlieb said the ACCC would not hesitate to take action against influencers caught running dodgy promotions, including fines, which could be levied up to $2.5 million.
“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,” she said.
Broaden sources of information
Jessica Pallant, a marketing lecturer at Swinburne University, said social media influencers have grown in popularity on the theory that they were more authentic than traditional advertising.
But as the industry has grown many influencers have started taking on sponsorships that “did not align with the values they were signalling to consumers”, she said.
“Unfortunately, this can create a lot of issues if consumers think they are getting an objective review when it has been paid for by a company,” Dr Pallant told TND.
“This is particularly true in settings where people might be more vulnerable such as beauty, parenting and health.”
Dr Pallant said consumers should be wary of trusting influencers on social media too much.
“It’s important to remember social media is highly curated and what you see is not the complete, unfiltered truth, even if there is not a direct sponsorship involved,” Dr Pallant said.
“Don’t rely on social media alone to make important decisions. Look to a broader range of sources and information whether that be friends, family, other trusted people or other public sources.”
