Influencer marketing rules target ad claims
Influencer marketing is the wild west of Competition Law, and the Canadian Competition Bureau just rode into town on a white horse.
Scrolling through your timeline on Facebook or Instagram, you will likely find at least one friend from high school trying to sell you cleaning products, makeup, or even health and wellness products. This marketing strategy is often delivered with a clickbait claim about the tremendous benefits of the products they’re selling. Essential oils to help you sleep? Moisturizers to treat your acne? Yoga pants to boost your metabolism?
Earlier this year, the Canadian Competition Bureau published new guidelines for influencers and their sponsors on how far these claims can go.
‘Deceptive’ advertising
The guidelines begin by reminding influencers when advertising can be considered ‘deceptive’ under the Competition Act:
When it is literally false or misleading, or
When the claim is not based on adequate and proper testing.
Influencers are personally responsible for conducting or verifying the testing of products if they are making performance claims about those products. The guidelines offer the following direction:
Testing should be performed before a performance claim is made about a product.
The tests should be performed under controlled circumstances but reflect the real-world use of the product. Making performance claims based on a one-time effect, studies of similar products, or anecdotal stories, should be avoided.
The claims should not be overly broad, vague, or based on partially irrelevant data, and marketers should be cognizant of the overall impression the claim will leave on the consumer.
Claims based on evidence, testing
The Canadian Competition Bureau recommends that influencers abstain from making any claims about a product’s performance unless they produce the evidence / testing to back up those claims. If an influencer makes a claim about a product without broad prior testing, they should make it clear the claim is limited to their personal experience with the product.
The brand sponsors may also share liability for false / misleading claims. The Canadian Competition Bureau will consider the degree of control the sponsor has over the advertising content. It encourages influencers to disclose when they are making a claim on behalf of a brand.
Over the past year, the Canadian Competition Bureau’s enforcement team has focused on inaccurate / untested claims about COVID-19 related marketing. But, with penalties up to $750,000 for individuals and $10,000,000 for corporations, one can see that strict adherence to the accuracy and testing requirements in performance claims is essential for influencers and their sponsors no matter what product they are selling.
David Spence is an Associate Lawyer with Harrison Pensa’s Business and Financial Services Law Group, Employment and Labour Law Group, and Technology and Privacy Law Group. Connect with David on LinkedIn.