The Italian Competition Authority and hidden advertising through influencers: the British American Tobacco case
The Italian Antitrust Authority (AGCM) has for years been carrying out numerous activities to counter forms of hidden advertising on social media. In fact, the Authority has recalled on many occasions (both in investigative interventions and in moral suasion campaigns) that the general prohibition of hidden advertising has a general scope and must therefore also be applied to communications spread by influencers via social networks.
In May 2021, following a report by the National Consumers’ Union, the AGCM initiated investigative proceedings against British American Tobacco Italia S.p.A. (hereinafter “BAT”) and the influencers Stefano De Martino, Cecilia Rodriguez and Stefano Sala. As clarified by the Authority itself, this intervention is part of a line of investigation which, following the evolution of marketing techniques adopted on social media, aims to strike at communications which are apparently neutral and unbiased but which are, in reality, instrumental in promoting a product and, as such, able to influence consumer choices.
The Authority, in particular, accused the above-mentioned subjects of having carried out a probable case of hidden advertising in favour of the product Glo Hyper, a heated tobacco device, produced and marketed by BAT, through the publication of posts on the Instagram profiles of influencers, linked to a commercial relationship with BAT, containing an invitation to followers to publish content with tags and hashtags linked to the Glo_Hyper device (a so-called “call to action”). According to the Authority, the illicit profiles derived from the fact that the posts published by the followers in response to the invitation from the influencers were devoid of warnings regarding the promotional purpose of the content disseminated through the social channel (such as #adv, #sponsoredby…).
In particular, the Antitrust Authority contested the alleged violation of the provisions of the Consumer Code and, in particular, of article 20, paragraph 2, according to which “a commercial practice shall be unfair if it is contrary to the requirements of professional diligence and materially distorts or is likely to materially distort the economic behaviour of the average consumer whom it reaches or to whom it is addressed, or of the average member of the group when a commercial practice is directed at a particular consumer group”, article 22, paragraph 2, according to which “a commercial practice is (…) misleading omission when (…) a trader hides or provides in an unclear, unintelligible, ambiguous or untimely manner such material information (…)or fails to identify the commercial intent of the commercial practice if not already apparent from the context, and where, in either case, this causes or is likely to cause the average consumer to take a transactional decision that they would not have taken otherwise”, and finally article 23, paragraph 1, lett. m), which defines as “misleading” the commercial practice of “(…) using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial)”.
In the course of the proceedings, the parties involved all submitted specific commitments.
With regard to BAT, it has first of all demonstrated that it has removed all photos/pages similar to those challenged and published on Glo_Hyper’s Instagram site and on those of the influencers contracted by BAT, and has also committed to:
adopt guidelines on influencer marketing, based on advertising transparency and in light of the Authority’s decision, containing prescriptions addressed to influencers on the obligations to include hashtags such as #adv and on the indications to be observed in the case of a call to action;
include in both the contracts with influencers hired directly by BAT and in contracts with third-party agencies obligations to comply with the guidelines as well as standard clauses with deterrent mechanisms (reduction of fees and/or penalties and/or suspension of payments/withdrawal from the contract) in the event of violation of the above obligation;
require the influencer, in promotions through a call to action, to indicate to the follower the need to insert hashtags such as #adv before the name of the BAT branded product, with exclusion from any reward/reward of followers who do not respect this warning;
not incentivise influencers to use their social channels to promote its products.
With regard to the influencers, they undertook to:
remove from their Instagram profile any publication referable to the facts subject to the proceedings;
use the following hashtags before the name of the brand or company or product to be promoted for any form of future advertising and marketing activity (including via a call to action): “#adv” “#advertising”, “#sponsored by/by”, “#advertising”, “#promoted by/promoted by” and/or “#in collaboration/partnership”;
in the case of marketing activities that involve the final publication of the best posts on the social page and/or website of the influencer and/or the company that owns the brand/product/brand, indicate that posts sent by followers without the aforementioned initials will not be taken into consideration.
The Authority considered the above commitments to be suitable for remedying the possible unlawfulness of the contested commercial practice. In fact, the AGCM reiterated the need to “guarantee consumers maximum transparency and clarity on the possible advertising content of the communications disseminated on social networks, considering that hidden marketing is particularly insidious since it can deprive the recipients of the natural defenses activated in the presence of a declared advertising intent (…) In this way, the methods of identification of a commercial communication on the Internet, through, for example, the use of hashtags such as #adv or #sponsored by, represent a useful means of recognition of the advertising message, both when this is promoted (upstream) by people with a more or less consistent number of followers – influencers and micro-influencers – and when the message comes (downstream) by a common user, enticed to post such content in exchange for a utility, even if not directly economic, such as to obtain greater visibility on the network.”
In view of the above, with recent decision no. 29837 (published in Bulletin no. 41 of October 18, 2021), the Authority made the above commitments binding on the parties involved, closing the proceedings without ascertaining the infringement, pursuant to art. 27, paragraph 7, of the Consumer Code.
It should be noted that the National Union of Consumers, which had reported the case to the Guarantor, considered the decision satisfactory, while Codacons declared its intention to challenge the decision to the TAR because “the legislation in force in Italy prohibits any form of advertising of smoking products, and it is clear that this case includes advertising made through social networks by influencers and celebrities, who not only violate the provisions of the law, but also bring their followers, especially young people, closer to smoking and to new generation products such as heated tobacco devices.”