Regulating the social media influencers

Any change in the the society demands a change in the law; by the same token, the advancement in influencer marketing also demands an imposition of regulations and laws. Now we no longer need to sit in front of a TV or read newspapers to be manipulated into buying a product or a service. Present times allow our lives to be puppeteered by a smartphone screen which is also a window into almost everyone's life. We no longer need to see a famous celebrity endorsing a brand in order to invest in it; rather a 'social media influencer' to convince us into buying products ranging from vanity to essential items.

This begs the question: who should fall within the ambit of the definition of an influencer? Any person who has a following of more than ten to twenty thousand, across all social media platforms should fall within the definition. This also includes admins and founders of different social media groups, who even if prima facie may not be considered as influencers, but should be held accountable for their acts, omissions and for creating legitimate expectations as they have the capability to redact opinions from the community and only publish posts which align with their ideology and benefit them financially.

This conjures the question as to why influencers should come under the ambit of regulations in the first place. It is of utmost importance that consumers are aware of which product or service is being advertised to them in disguise of a friendly recommendation. Brands exploiting this gray area often want the influencers to portray a product or service as a part of their daily routine so that the target audience is under the impression that the influencers are not promoting the product but just giving their 'honest opinion'. Sadly, consumers in ignorance of the principle of caveat emptor do not enquire whether the product is being commercially promoted to them or if it is a mere suggestion. In addition, some social media platforms do not require one to be an adult to be a user: thus, minors are often exposed to products meant only for adults.

Regarding monetary transactions, it is submitted that most of these pecuniary benefits are not even documented. Thus, a new wave of advertisement technique is going untaxed and unmonitored by the government. We need to understand that a vast majority of people are taking up social media influencing as a career and in any case, such monetary transactions should be regulated by the law.

Not only are consumers exploited, but also the small businesses are often misled into thinking that if they send influencers their products for free they will get featured in posts which will generate a lot of traction for their new business. In many cases no such posts are made even when influencers are paid a hefty amount of collaboration fees. Such exploitations often go unnoticed and small businesses that are at the heart of a growing economy, lose hope in becoming scale-able.

'Scale-ability' of a business also depends on how much businesses are willing to spend behind advertisement; but owing to the unregulated markup system of the influencers' fees, huge amount of payments are sought, which are, again, undocumented. Moreover, a business driven by 'social proof and 'fear of missing out' gets an even more complex dimension of fraudulency when fake followers and engagements are added to the equation. Consumer News and Business Channel (CNBC) reported that fake followers in influencer marketing cost brands $1.3 billion each year.

In the USA, under Federal Trade Commission, influencers have a legal obligation to clearly disclose their material connection to the products, services, brands and/or companies they promote in their social media feeds. The UK and Canada, following the lead of USA, have also made similar regulations. Notably, in Canada, making false representation to promote sale of a product or service is a criminal offence punishable by up to fourteen years of imprisonment and potentially high fines.

The UAE has shown a rather innovative regulatory scheme in influencer marketing requiring influencers to obtain a license if they want to promote products and services for which they are paid. Although different social media platforms are rolling out their own versions of disclosure and transparency terms, without uniform national laws and regulations, such initiatives are inefficient.

Lastly, with the growing emergence of this new advertisement technique it is high time that government made special laws to control the new wave of influencers.

The writer is adjunct faculty at LCLS (South).