IP Oversee

It appears that 2017 will bring significant changes to social media endorsements; to date, online “influencers”, such as bloggers, celebrities, and those with large online followings, have been operating without regulation when it comes to paid messages, posts, affiliations, endorsements, and sponsorships.   

 

Advertising Standards Canada (ASC) aims to crack down on and regulate sponsored online content with new social media endorsement guidelines, which are projected to come into effect by early 2017. The new guidelines will require full disclosure for online posts containing paid endorsements or the mention of companies, products or services posted as a result of an exchange of exposure for payment (either in the form of cash, free products, or any other compensation arrangement).

​

Janet Feasby, Vice President of Standards at Advertising Standards Canada, stated that the new guidelines will mean that “endorsement or testimonials must disclose any material connection between the endorser, reviewer or influencer and the entity that makes a product or service available…If there is a connection, it must be clearly and properly disclosed in proximity to the representation of the product.”

​

While there may not be anything illegal or wrong with online endorsements or sponsored content on social media platforms such as Instagram, Facebook, and Twitter, the new guidelines seem to be a way to keep online influencers honest. Feasby noted that the new guidelines are a response to a complaint ASC received about sponsored content, and are in an effort to regulate against misleading readers and audiences online.

​

The details of the new guidelines are not yet clear, but will include requirements for online content to contain hashtags, such as “#sponsored” or “#ad” in order to alert to endorsements or sponsored content.

​

Canadian audiences, however, are most likely already familiar with this language popping up on their social media feeds. Celebrities and online influencers based out of the United States have been following similar disclosure rules implemented in 2009 by the US Federal Trade Commission (FTC).  

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

 

 

 

While Canada may be following in the footsteps of its American neighbours in

this regard, there are significant differences when it comes to enforcement and

penalties. Violators in the United States are issued with a fine by the FTC;

in Canada, since ASC is a self-regulating body and not a government agency,

it will not have the ability to issue fines. Instead, ASC will request that violators

cease posting infringing content; any refusal to cooperate will be met with

contacting the medium on which it is posted, and asking to block any further

infringing content.

        

Feasby notes that any potential for fines in Canada would likely have to come

from the Competition Bureau. While the Competition Bureau does not yet have

any formal rules requiring blogger and influencer disclosure, the lack of disclosure

could fall under its rules against misrepresentation and false advertising.

  

Competition Bureau spokesperson Phil Norris was quoted stating that “creating representations that appear to be the authentic experiences or opinions of impartial third parties is sometimes referred to as ‘asto-turfing’, a type of conduct that the Bureau has taken action on recently.”

​

Social media endorsements and sponsorship of online content may not seem like a new concept, but the introduction of the new guidelines and disclosure highlights how Canadian law must respond and reflect the ever-changing developments in technology, behaviour, and social interaction. Suggesting that a celebrity casually post about a product at 2:00pm on a Tuesday afternoon for their 45 million Twitter or Instagram followers may not be the traditional Mad-Men-Don-Draper type of ad, but it doesn’t change the fact that it still is exactly that, an ad. Implementation of the new guidelines appears to be an effort to ensure compliance with the Canadian Code of Advertising Standards. Of particular relevance are Clause 2 and Clause 7 of the Code:

 

​

​

​

​

​

​

​

​

​

 

While there is still much left to be seen, the new guidelines requiring disclosure for social media endorsements reflects a greater involvement of Canadian law in consumer protection. This pulling back of the curtain may also have the potential to affect the dynamic and interaction between brands and their influencers, as well as between influencers and their audiences.