January 1, 2020
Practical Law Canada has published a New Legal Update, which discusses the Competition Bureau’s new guidelines for influencer advertising. While the Bureau’s new guidelines largely reiterate previous guidance provided by the Bureau, its announcement also suggests increasing scrutiny on not only influencers that fail to comply with the Competition Act, but also brands and agencies. In this regard, the Bureau issued close to 100 letters to brands and marketing agencies advising them to comply with the Competition Act. Below is an excerpt with a link to the full Legal Update at Practical Law.
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On December 19, 2019, the Competition Bureau (Bureau) announced that it had issued close to 100 letters to brands and marketing agencies involved in influencer marketing in Canada advising them to review their marketing to comply with the Competition Act, R.S.C. 1985, c. C-34 (see Competition Bureau, News Release, Influencer marketing: businesses and influencers must be transparent when advertising on social media (December 19, 2019)).
This development generally reflects the Bureau’s increasing focus on the digital economy, including social media marketing. More specifically, the Bureau’s announcement, including its new compliance guidelines for influencer marketing (see Influencer marketing and the Competition Act), suggests that it is willing to pursue enforcement against brands, agencies and other entities that fail to ensure that the marketing claims made by influencers retained to market products comply with the Competition Act.
This approach to influencer marketing compliance – that is, that potential liability can arise for not only influencers themselves that violate the Competition Act but also brands, agencies or other entities that have control over the content of a false or misleading claim – is consistent with the Bureau’s past approach to misleading advertising and its ongoing efforts relating to influencer marketing and testimonials in particular. For example, in a case involving online reviews of apps by Bell employees, in which the Bureau argued that employees failed to disclose that they worked for Bell, Bell agreed to pay an administrative monetary penalty of $1.25 million (see Competition Bureau, News Release, Bell Canada reaches agreement with Competition Bureau over online reviews (October 14, 2015). For more information, see Competition Bureau, Enforcement Guidelines, Application of the Competition Act to Representations on the Internet, (October 16, 2009) (Internet Advertising Guidelines).
The Bureau’s New Guidance for Influencer Marketing
In its recent announcement and influencer compliance guidelines, the Bureau has reiterated it core message that any material connection between an influencer and a business, product or service they are promoting should be clearly disclosed. In the Bureau’s view, a material connection can include money or commissions, free products or services, discounts, free trips or tickets to events, or a business or family connection to the brand.
More specific guidance that the Bureau has provided includes all of the following:
Make sure that your disclosures are as visible as possible. This means that, among other things, disclosures should be prominent, visible on all devices without having to click or tap a button to expand the post and are included on all platforms on which content is shared. For more information, see Practice Notes, Digital Marketing and the Competition Act; Social Media Advertising and Marketing; and Regulatory Guidance for Social Media Influencers from the Competition Bureau and Ad Standards. See also Best Practices for Digital Marketing Checklist and Testimonials and Endorsements Checklist.
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For the full Update, see: Influencer Advertising: Competition Bureau Increases Pressure on Brands and Agencies to Comply with the Competition Act.
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I am a Toronto competition and advertising lawyer offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. I also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
My experience includes advising clients in Toronto, Canada and the US on the application of Canadian competition and regulatory laws and I have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal, pricing and distribution, Investment Canada Act and merger matters. For more information about my competition and advertising law services see: competition law services.
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