What are the legal considerations for social media advertising?

What are the legal considerations for social media advertising?

If your business is trying to harness influencer power, it is essential to comply with social media advertising requirements

With the growth of new social media platforms such as TikTok, and the ongoing prominence of influencers, social media advertising is growing exponentially. However, with this growth comes increased regulation. Because of the potential for interaction with many different areas of law and many different jurisdictions, legal considerations for social media advertising are often complex. Examples include advertising standards, legislation, and the platforms’ own policies.

What are the disclosure obligations for social media advertising?

In Australia, the Australian Association of National Advertisers (AANA) Code of Ethics helps advertisers to meet their ethical obligations. Particularly relevant to social media is the requirement that advertising and marketing communications are clearly distinguishable. It means that an advertisement must disclose to the viewer that it is an advertisement. Previously this was assessed based on what the relevant audience for that content would likely determine, but now, it is required that an advertisement be clearly distinguishable.

An advertisement is unlikely to meet the clearly distinguishable requirement by simply tagging the brand in a social media post.

If your social media post is sponsored, we recommend that you use hashtags to indicate the post’s status as an advertising or marketing communication. For example, #Ad or #Sponsored. These may be used in conjunction with #Ambassador, #Collab or #PaidPartner, but not in substitution.

These obligations do not need to be met by a brand that posts content on its own account, as it is clear that it is commercial in nature. However, where an affiliate or an influencer promotes a brand’s goods and services under a commercial arrangement, this must be disclosed.

Importantly, payment is not necessary for these arrangements, as gifts may be considered equivalent to payment. This means that if you are an influencer who receives products from a company in return for reviews or content posted about it, you will be required to disclose your relationship with this company.

The AANA Code of Ethics is not yet legally enforceable. Nor are there fines or other penalties for any breaches. However, the standards are considered best-practice for social media advertising, and it seems likely that parts of the Code will become law as social media advertising continues to grow.

A person can complain to the Ad Standards Community Panel, which will publish brand names online when it finds breaches of the Code.

How does the Australian Consumer Law apply to social media advertising?

Alongside these advertising standards, social media also falls within the scope of the consumer protections in the Australian Consumer Law (ACL). Particularly relevant is the offence of misleading or deceptive conduct:

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

This offence can come about in different ways, for example, the advertisement:

  • Is not consistent with the promoted product or service
  • Contains an exaggerated performance or promise concerning a product’s effect
  • Includes exaggerated descriptions or absolute claims without related proof
  • Contains mismatching or inconsistent information, for example, promotion or price

If there is a breach, the Australian Competition and Consumer Commission (ACCC) may take action against the advertiser or influencer by issuing an infringement notice. It may result in significant penalties.

To avoid an infringement notice, we recommend that you ensure that any statement you make is justified or substantiated.

What should I understand about the advertising policies of social media platforms?

Social media platforms have policies regulating the content that can be posted. One example is content restrictions, which may prohibit the display, facilitation or promotion of:

  • Drug-related content
  • Discriminatory content
  • Adult and sexual content
  • Content related to weapons

Many of the content restrictions are straightforward. However, it’s also likely that the policies will change at a faster pace than legislation. For example, in July 2021, TikTok banned sponsored content relating to financial advice, particularly cryptocurrency. Before posting, it will be important to bear in mind any policy changes.

The final word about legal considerations for social media advertising

It is critical for influencers and businesses to understand legal considerations for social media advertising before posting content.

We advise those who are involved, or seeking to get involved, in the social media sphere, including TikTokers, social media influencers, and business owners. Contact us to find out how we can help you navigate the legal considerations for social media advertising.