Guidance

Hidden ads: Principles for social media platforms

Published 3 November 2022

Hidden advertising is harmful and illegal. In January 2019, the UK’s Competition & Markets Authority (CMA) concluded its consumer enforcement investigation concerns that social media influencers were infringing consumer law by posting hidden advertising online. 16 influencers provided undertakings to the CMA, agreeing to make it clear when they have been paid or otherwise incentivised to endorse a product or brand (as provided in the definitions section.

The CMA subsequently conducted a review of how a variety of social media platforms tackle hidden advertising. Following its review, the CMA has developed six key compliance principles (visit principles section), which in large part build upon similar undertakings provided by Facebook Ireland Limited to the CMA in October 2020. The CMA considers that social media platforms are more likely to comply with the requirements of consumer law and reduce the risk of future enforcement action if they implement these principles. Ultimately only a court is able to decide whether a platform is breaking the law, and platforms should keep this under review as practices, technology and the law continue to develop.

CMA’s compliance principles

Platforms have responsibilities under consumer law to prevent and tackle unlawful practices such as hidden advertising, where they are occurring on their services (including sites in ‘desktop’, ‘mobile’ and ‘app’ based formats). In particular, platforms have a duty to act with professional diligence under regulation 3 of the Consumer Protection from Unfair Trading Regulations 2008. These principles are addressed to social media platforms to help them, and their users avoid infringing consumer law, by setting out practical steps that platforms can take to comply with these responsibilities.

The principles outline what the CMA considers platforms should be doing now, based on current market practices and technology. However as new practices and technology develop, it is important that platforms continue to keep their compliance under review. The CMA also recognises that each platform is different, and that platforms may develop ways of complying which are not specified in these principles.

Principles

Principle 1 – Inform users that incentivised endorsements are required to be clearly identified as advertising and clearly distinguishable from other content

You should ensure your users, and especially content creators,^{[footnote 1]} are aware that hidden advertising is not allowed on your service, whatever the format they are using (for example desktop, mobile or app based formats), and that they could face consequences for breaking this rule. You could achieve this by taking the following steps:

• providing information clearly and prominently in your terms of service, policies and any other information relating to incentivised endorsements, that

  • hidden advertising (such as unlabelled incentivised endorsements) is prohibited
  • content creators must label content as advertising where they have been paid or otherwise incentivised to endorse a product, service or brand, or they have a commercial interest in the brand or its products or services
  • content creators are required to use a particular tool that you make available to label content as advertising

• providing timely, clear, unambiguous, sufficiently detailed and easy to find guidance (using examples where appropriate) about the obligations surrounding incentivised endorsements, including:

  • what constitutes an incentivised endorsement
  • when disclosure is required
  • how to label an incentivised endorsement using any relevant tools

• make it clear that there are potential sanctions for breaching your terms of service in relation to hidden advertising

• flag and remind people of the main requirements about labelling incentivised endorsements at key moments when users start using your service and when they are posting content

Principle 2 – Provide content creators with tools so they are easily and effectively able to label any content as advertising

You should make it easy for all content creators to label their content as advertising in a way which is clear and prominent, no matter what device they are using, so that they can comply with their legal obligations.^{[footnote 2]} The CMA considers that the law requires content to be clearly recognisable as advertising as soon as the reader starts to engage with it. You could achieve this by for example taking the following steps:

• offer a tool that easily enables content creators to use one click to label their content as advertising. This functionality should identify advertising consistently across your platform in a way which complies with the law and the Advertising Standards Authority (ASA)’s CAP Code ^{[footnote 3]}

• actively promote the availability of the tool, so that content creators use it when posting advertising content

• use algorithms which identify potential unlabelled advertising content, and automatically prompt content creators to use the tool to label it as advertising

• undertake regular reviews of the tool and its uptake by content creators and take steps to improve it

Principle 3 – Take appropriate, proportionate, proactive steps and use available technology to prevent hidden advertising from appearing on your site

If hidden advertising is occurring on your site you should take proactive steps to detect suspected hidden advertising, prevent it from appearing and hold content creators to account if hidden adverts still appear. You could achieve this by for example taking the following steps:

• using technology and algorithms designed to identify proactively content containing incentivised endorsements that have not been clearly and prominently labelled as such. This should enable platforms to invite content creators who are posting suspected hidden advertising to label it properly or confirm that it is not in fact advertising. You should ensure any such algorithm you put in place is effective. For example, as a minimum it should take into account relevant factors such as:

  • relevant metadata of any content, such as captions that tag specific brands, embedded links to brands’ websites or affiliate links added above / beneath content
  • branded content prominently visible within image or video content that can be reasonably identified by automated image recognition tools

• carrying out regular tests and reviews of your systems and processes and updating these to ensure they remain effective and keep pace with evolving abuse. This is likely to be particularly important if you become aware that hidden advertising is still appearing on your site whether through notifications, user or regulator reports or through your own proactive means

• taking reasonable steps where an algorithm identifies suspected hidden advertising, including flagging this to the relevant brand for their confirmation

Principle 4 – Make it simple for users to report suspected hidden advertising easily and effectively

Depending on how comprehensive the steps you take to prevent hidden advertising from appearing on your platform are, it is likely to be necessary to enable other parties to report suspected hidden advertising for action to be taken. It is particularly important that enforcers should have an effective means of contacting you to require action to be taken. You could achieve this by taking the following steps, for example:

• providing a mechanism for any users to report suspected hidden advertising
• making it clear that this is a tool that can be used to report hidden advertising, even if it can also be used to report other concerns
• providing a tool or contact address for regulators to report suspected hidden advertising and any other concerns, and ensuring you have systems in place to act rapidly to address the problem

Principle 5 – Facilitate legal compliance by brands

Hidden advertising by content creators is illegal. You should take proactive steps to raise awareness and understanding among brands of your terms of service, policies and any other information relating to incentivised endorsements, and encourage brands to check that content which endorses them is properly labelled as advertising. You could achieve this by for example taking the following steps:

• taking appropriate action to inform the brand involved where content is identified either through your algorithms or through reporting mechanisms
• promote compliance by brands by providing functionality to enable those which use your platform easily to review content that mentions their brand, and then request action if necessary

Principle 6 – Enforce your terms and conditions and take appropriate action when violations occur

Don’t ignore it if content creators post hidden advertising, despite the steps you have put in place to prevent this. You should take action to encourage compliance with and enforce your terms of service, so that hidden advertising does not continue to appear. You could achieve this for example by taking the following steps:

• promptly removing content which has been confirmed as hidden advertising

• applying proportionate and effective sanctions to content creators who have posted hidden advertising, to deter them from doing it again. These could include blocking them from posting for a defined period, suspending their account, and if there are still infringements, closing their account completely. Sanctions should be escalated for repeat offenders

• maintaining records of the steps you have taken to deal with hidden advertising. This will help you to apply appropriate sanctions to repeat offenders, and to demonstrate to enforcers that you have been acting with professional diligence

Definitions

Incentivised endorsement means content appearing on a platform’s service which occurs where:

• a brand (whether directly or through any intermediary) makes payment to a content creator in connection with promoting itself or its products on the platform; and / or

• there is a commercial relationship between the content creator and the brand, which includes the following circumstances:

  • an arrangement entered into by a content creator in respect of any brand or its products, where there is payment (as defined below) made or offered in the year prior to the content being posted, or where there is a long-term relationship (such as where a content creator acts as an ambassador for the brand

  • where the content creator has any (direct or indirect) ownership interest in the brand; and / or

  • where the content creator is a director, or otherwise sits on the management board, of a brand, and in either case the content creator’s post depicts or refers to the brand or its products in any way

Payment includes any form of monetary payment; commission; a loan of a product/ service; a free product/service (whether requested or unsolicited); or any other incentive such as discounts, shares or equity, leases or rentals free of charge or on more favourable terms than those offered to the general public, ‘freebies’, free stays, invitations to events etc.

More information

The CMA has co-published a guide on how to label ads correctly with the Committee of Advertising Practice (CAP). It explains how to comply with consumer protection law and the Advertising Codes enforced by the Advertising Standards Authority (ASA). The CMA has also published a guide for influencers on social media endorsements.

The CMA has expressed its view on platform liability in its submission to the DCMS Select Committee on influencer culture in May 2021, its submission to the Joint Committee on the Draft Online Safety Bill in September 2021, in its ongoing dialogue with Government in relation to consumer reform.

The CMA has more advice available to help businesses understand what to look out for with online reviews and endorsements.

Platforms, influencers and brands may also wish to refer to the CMA’s guidance for traders on how to comply with the Consumer Protection from Unfair Trading Regulations 2008 and its collection of consumer protection guidance.

Please note: Guidance from the CMA is not legal advice.

1. In these principles, we use the phrase ‘content creators’ to include influencers. ↩

2. Content creators who are acting as ‘traders’ within the meaning of consumer law have an obligation to make the commercial nature of their advertising clear. ↩

3. ASA’s The-Cap-code. ↩