HAVE YOU GOT A LICENCE FOR THAT?

Legal considerations for brands and influencers.

R eflecting the global trend, there is a lot of buzz around influencers in the UAE right now. Many regional and international influencers are rapidly achieving a significant presence and following. Whether it is food, fashion, lifestyle, makeup, or any other consumer product, the UAE public is increasingly plugging into social media to stay on top of ‘what’s hot’.

With the announcement late last year that Dubai will be launching a new club for social media influencers, and with some local Instagram stars now reportedly earning up to $5,000 per post, social media influencers are transforming the branding, advertising, and content creation industry in the region and across the globe. Businesses have realised the great potential that influencers have to generate brand awareness and popularity, and are increasingly moving to include them within their marketing budgets.

As the influencer movement has happened so quickly, there is no unified global approach in regards to the specific legal nuances of being an influencer or a sponsor in this context. However, it is clear that failing to address the relevant legal considerations can have detrimental impacts for both influencers and sponsors seeking their services, both in terms of brand management and growth.

SET-UP

Influencers, whether they know it or not, are actually running a business. That means that, according to the laws of the UAE, they would require a trade licence. In general terms, a supplier should not be invoicing for any services in the UAE without an appropriate trade licence. If an influencer is charging per Instagram post, for example, they will need to enter into a contract and then invoice for their services. This should be done through a UAE licensed company, as opposed to in a personal capacity. Whilst this might seem problematic for the influencer, it should be noted that this also assists influencers in managing their own legal liability and, if needed, taking court action against a sponsor if they are not paid.

While this may not have been strictly enforced up until now, it is likely that, as the use of influencers grows and becomes more prominent, it will become increasingly important for an influencer to have the appropriate corporate structure in place. In addition, any sponsor that is securing the services of an influencer needs to be sure that they are able to enter into an enforceable contractual relationship with them.

SCOPE IT OUT

It has been common for sponsors to have a very informal arrangement with influencers in this region. However, this is not in line with international best practice. Internationally, sponsors not only have contractual relationships with their influencers, but also enforce stringent terms of behaviour that apply to the material created by the influencer.

When entering into such agreements, it is very important that influencers and sponsors define the scope of work very clearly. Having unclear terms will inevitably lead to disagreement between the parties regarding their disparate expectations. This may not only result in the influencer’s obligations being stretched far beyond what they understood to be required but can also lead to a breakdown in the relationship. Leaving terms such as the number of posts as undefined or ‘to be agreed’ is certainly a pathway to

such a result. These terms, such as $1,000 for one post per month for three months, should be set out clearly and in writing.

Some key questions to consider when finalising the contract are:

What content is to be included?

What is the term of the agreement – how many posts, what frequency, and in what time period?

Who gets to choose the style/ vibe of the post? Who has the creative control?