Influencer marketing and content creation witnessed considerable growth in recent years. All sorts of brands from a wide range of industries, from food to fashion, turned to influencers to endorse their products or services. This practice has alerted governments in different countries, especially when these collaborations and endorsements targeted a youth demographic, at times spreading disinformation.
In France, for example, the DGCCRF (Directorate General for Competition Policy, Consumer Affairs and Fraud Control; part of the Ministry of the Economy and taking care of regulation of market competition, economic protection of consumers and consumer safety) actively conducted a series of investigations over the years to oversee the commercial practices of influencers and verify adherence to consumer protection regulations.
In January 2023, the DGCCRF published a press release with the results of its investigation: on this occasion, it was observed that the practices of 60% of the influencers did not comply with advertising regulations and consumer rights and did not adhere to rules regarding the transparency of the commercial nature of their publications.
Some also misled consumers about the properties of the products sold (false anti-COVID claims, products labeled as organic or natural that were not) or promoted risky products or services, particularly in connection with sports betting, bypassing the rules governing these products. Additionally, other influencers promoted aesthetic injections by beauticians and non-health professionals, a practice posing health risks or practiced dropshipping, neglecting associated rules, including their obligations as sellers to consumers.
As a result, several procedures were initiated to admonish or sanction the offenders. Up until this year, influencers in France (around 150,000 according to estimates) had to adhere to all rules applicable to advertisements. For instance, they had to indicate if their publication had a commercial nature or complied with specific advertising modalities related to certain products or services (financial services or gambling), as well as advertising prohibitions (tobacco/alcohol, medicines, hazardous products, etc.).
Things developed further, though, especially after a series of scandals involving influencers (among the others Nabilla Vergara, a reality TV star fined €20,000 in 2021 for not telling her followers that she had been paid to promote a financial training service run by a website specialised in buying and selling bitcoin). A group of consumers claiming they followed influencers' advice and became victims of frauds – the Help for Victims of Influencers – was also founded.
At the beginning of June this year the French parliament adopted a bipartisan bill to regulate the online promotional activities of influencers. The law, passed unanimously, came into force on June 9th, and it represented the first set of rules in Europe and in the world that tries to regulate the work of influencers.
The law defines influencers as "natural or legal persons who use their reputation among their audience to communicate content to the public by electronic means, to promote by electronic means, directly or indirectly, goods, services or any cause whatsoever for an economic benefit or any advantage."
A definition for influencers' agent is also implemented, their activity consists in "representing or putting in contact, for consideration, natural or legal persons carrying on the activity defined in Article 1 [influencers] with natural or legal persons requesting their services, to promote goods, services, practices or any cause whatsoever."
A written contract between the influencer and the company requiring their services is mandatory when the amounts involved exceed a certain amount (the text also includes measures to hold platforms accountable).
Previously, there was a rule requiring influencers to disclose when content was associated with sponsorship (but this exists in other countries as well, think about marking a post as 'adv' or 'ad'; however, this practice led to influencers using terms like 'supplied,' which may or may not accurately convey a paid partnership…). The new regulations now make it mandatory to clearly state when a post is sponsored or if it is a paid collaboration ("Publicité" or "Collaboration commerciale"), generated by artificial Intelligence ("Image virtuelle"), or restricted to the public ("Interdit aux moins de 18 ans"). These mentions must be easily discernible and legible, appearing on the image, video, or message throughout the entire promotional period.
The updated law also mandates the disclosure of modified content using filters or photo retouching for advertising purposes ("Image retouchée"). This provision, designed to protect vulnerable users, especially young people susceptible to self-esteem issues and depression due to altered social content, aims to ensure transparency about edited visuals.
Alongside the existing ban on alcohol content promotion, sanctioned by the Evin law (originating in 1991 and applied to social media as of last May), there will now be an additional prohibition on sponsoring any product containing nicotine, tobacco, and vaping products. The new legislation encompasses several other restrictions, including hazardous contracts, digital assets, public offers of digital tokens (unless authorized by the French AMF), and the advertising of certain practices such as cosmetic surgery. Posts about gambling and sports betting will only be permitted on platforms accessible exclusively to adult users.
Moreover, any advertisement or communication featuring non-domestic animals will be prohibited unless specific authorization is obtained.
The law also seeks to shield users from the potential risks associated with dropshipping products (the practice of selling online through virtual stores a product not physically owned by the seller within the warehouse).
In many cases, these products are sold at inflated prices due to commissions, and if promoted deceptively, these platforms may vanish after receiving payment, leaving consumers vulnerable to scams. In this case the principle of joint and several liability is introduced, implicating influencers in the responsibility for promoting products to buyers, ensuring accountability for the products they sponsor. So influencers are now responsible for the products sold to consumers, they must ensure compliance with EU rules (that also highlight you can't sell counterfeited products), investigate product availability, and provide essential information about suppliers before orders are placed.
As many influencers operate from locations with favorable tax regulations, such as Dubai, the text seeks to mandate influencers operating from outside the European Union, Switzerland, or the European Economic Area to obtain civil liability insurance within the EU.
Non-compliance with advertising regulations by influencers may result in penalties of up to two years of imprisonment and a fine of 300,000 euros. Since the enactment of the law, the DGCCRF has already imposed sanctions on six influencers for engaging in misleading business practices. These infractions involve false advertising for sports betting advisory services, undisclosed partnerships, and the endorsement of hyaluronic acid injections. Influencers who incur in these infractions must also post a notice from the French authority on their Instagram account, stating, "DGCCRF agents have initiated an administrative injunction," with the post prominently featured in their profile for a month.
The recently passed law in France brings both advantages for consumers and challenges for influencers, who may bid farewell to the era of earning thousands of euros for a single post. However, it's essential to recognize that the majority of influencers are not engaging in fraudulent activities; many have alternate means of supporting themselves like very ordinary jobs. Some argue that certain provisions appear to overly regulate influencers, prompting questions about why celebrities showcasing specific designs on the red carpet, often for financial gain, aren't subject to similar regulations. Besides, the law raises broader questions about the lack of regulation for fashion houses and media regarding the disclosure of image manipulation.
France introduces an interesting addition alongside this law – the Union of Influence Professions and Content Creators (UMICC) – a trade union at the moment guided by Carine Fernandez, founder of the agency Point d'Orgue, representing agencies in the sector that could serve as a model for other countries as well, particularly in safeguarding younger individuals aspiring to pursue careers in this field.
For those aspiring to become influencers in France, a word of caution: familiarize yourself with the laws and regulations, and consider legal studies to navigate potential challenges. However, a broader question looms: France has taken its initial steps to regulate a complex social media landscape, unlike Germany, Italy, Spain, or the United Kingdom which lack a specific formal law (Spain has general guidelines known as the Code of Conduct for the use of influencers, and Italy has specific guidelines from the Ministry of Health, but no sanctions against influencers). Will other countries follow suit? And what aspects of social media or Artificial Intelligence should be further regulated or restricted? We will debate these issues in further posts, so stay tuned.