Social media agencies targeted by competition watchdog

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CMA warns agencies, influencers and clients that disguised advertising breaks consumer law

The CMA is clamping down on social media marketing agencies to prevent them from misleading consumers.

The Competition and Markets Authority has taken enforcement action against UK agency Social Chain, which arranges advertising for businesses through social media. Social Chain has now agreed not to post or arrange undisclosed advertising.

Gavel, law, legal, trialThe CMA’s investigation found that Social Chain used its own social media accounts and arranged for widely followed social media personalities to promote films, games and various commercial apps – without readers being informed that the content was paid-for advertising.

“Social Chain accepts that the adverts, which were posted on Twitter, YouTube and Instagram, may have been difficult for readers to distinguish from other posts, conversations and jokes they appeared alongside,” said the CMA.

After the issue was raised with Social Chain, it agreed undertakings that will ensure that all advertising that it posts or arranges will be clearly labelled or identified, so that it is distinguishable from other content found on social media.

Between March and July 2015, 19 marketing campaigns that Social Chain arranged involved undisclosed advertising. These promotions appeared on social media accounts with a combined reach of around 4 million followers. Social Chain’s activities also helped to ensure that some of these campaigns trended on Twitter, which may have increased their readership further.

The CMA has also written to 15 businesses, on whose behalf Social Chain acted, and the 43 social media personalities who published content for Social Chain, to warn them that arranging or publishing advertising that is not clearly labelled may result in them breaching consumer protection law.


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