Online endorsements pay probe

THE competition watchdog has launched an investigation of social media stars over concerns they are not declaring when they have been paid to post about products and experiences.

The Competition and Markets Authority (CMA) said social media influencers could sway the shopping habits of millions with posts endorsing goods or services, but it had concerns that they may not be disclosing that they had been paid to do so.

The CMA said it had seen examples of posts which appeared to promote or endorse products and offered the celebrity’s personal opinion on the benefit of a product without clearly disclosing if they were being paid by the brand.

It has written to a range of celebrities and social media influencers to “gather more information about their posts and the nature of the business agreements they have in place with brands”.

It is also asking the public to share their experiences, and said it was particularly interested in hearing from people who had bought products which were endorsed on social media.

Typically, celebrities and influencers have millions of followers who watch their channels to see where they go on holiday, what they wear, which products they use, and more. Online endorsements from celebrities and influencers can help brands reach target audiences and boost sales.

However, influencers must make it clear in such posts that they have been paid or rewarded to promote, review or talk about a product in their social media feeds under consumer protection law.