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2023 looks set to be a year of regulatory focus for those operating within the online advertising and marketing arena, with harmful content, greenwashing and the activity of influencers key areas of scrutiny.
In this article, our commercial solicitors look at three areas where change is anticipated: online advertising, influencers, and greenwashing.
Online advertising
The Government’s Online Safety Bill (OSB) is likely to receive Royal Assent in 2023. The objectives of the OSB are to protect free speech whilst tackling harmful and misleading content available online, particularly when accessed by children. The focus of the OSB is on social media, messaging, and online advertising services.
Recent years have seen growing public sentiment that Tech firms should do more to protect those that use their services, particularly in preventing the spread of misinformation and harmful content. In response to this, the OSB intends to introduce what the Government has dubbed the “triple shield”, placing social media firms under new obligations to:
- remove illegal content;
- remove material in breach of their own terms of service; and
- provide adults with greater choice over the content they see and engage with online.
The OSB seeks to achieve its objectives by:
- regulating services that target UK consumers, even where the service itself is not based within the UK;
- imposing a duty of care on services that host user-generated content, services that facilitate online interaction between its users, and search engines in a bid to prevent the proliferation of online illegal content and activity. To satisfy this duty of care, companies will need to implement processes and systems to improve user safety that are proportionate to their organisation’s size, functionality and features of the service involved;
- introducing a duty to protect against fraudulent advertising;
- appointment of Ofcom as regulator;
- introduce a number of offences for companies, senior executives and employees who fail to provide information to Ofcom when requested.
With the OSB set to receive Royal Assent in 2023, further detail as to the exact wording of the regulation, and guidance from Ofcom is awaited.
Influencers
In September 2022, the DCMS Committee published their report on influencer culture entitled Influencer Culture: Lights, camera, inaction? The report highlighted a number of regulatory gaps particularly in respect of the protection of children given that current advertising regulations do not appropriately consider a child’s developing digital literacy, and that child labour law does not cater for user generated content therefore leaving child influencers exposed to exploitation.
The report called for an urgent reform of influencer marketing regulation which may come to fruition in 2023. In response to the report, the Government confirmed that it was open to working with industry bodies to develop a new code of conduct aimed at promoting best practice between influencers, and brands and agencies. Further clarification on such potential code of conduct is awaited.
One area of focus in 2023 may be the use of hashtags and the obligations placed on influencers to act in a clear and transparent way with consumers, making clear that their social media content is a form of advertising. A report issued by the Advertising Standards Authority (ASA) on the labelling of influencer advertising found that consumers are likely to have difficulty in differentiating advertising content that is presented in a similar style to other non-advertising content i.e., the advertising post looks the same as the influencer’s other posts.
In 2023, we may see influencers and brands subject to further obligations to make their advertising clear to consumers, beyond the current use of the hashtag #ad (or similar), which many critics feel has lost its value and is no longer easily identifiable by consumers.
Influencers, and the brands that engage them, should remain abreast of legal developments in this area, and ASA action taken against other influencers and consider their own advertising practices in light of such developments, and ensure that any contracts in place are reflective of updated regulatory obligations.
Greenwashing
Greenwashing, or GreenSheen, is a form of marketing or advertising where unsubstantiated claims are made about a product or service to deceive customers into believing that it is environmentally friendly or has environmental benefits.
In July 2022, the Competition Markets Authority (CMA) launched an investigation into ASOS, Boohoo, and George at Asda in relation to claims they had made regarding their fashion products and clothing being environmentally friendly. The CMA’s investigation will likely conclude in 2023, however, further CMA investigation into the fashion sector is expected given a statement made by the Chief Executive of the CMA, Sarah Cardell, that its investigation into the fashion sector has only just begun, and companies should ensure their practices are legally compliant.
Such CMA investigations may result in new regulation to tackle greenwashing, and businesses should ensure that any claims it makes as to the environmental benefits of its products or services are substantiated and accurate. Where brands have engaged media and advertising companies, they should ensure that mechanisms are in place for assessing and approving adverts before they are published, and caution exercised when using any auto-generated content such as through the use of AI.