CMA clamps down on undisclosed paid-for advertising

CMA clamps down on undisclosed paid-for advertising

The Competition and Markets Authority (“CMA”) has recently published two open letters directed at marketing departments and online publishers and bloggers respectively on the need for paid for promotions to comply with consumer law.

The letters highlight the CMA’s concerns about the need for labelling of paid promotions in articles and blogs following a recent investigation into the use of online endorsements and compliance with consumer protection laws. The investigation found three businesses had arranged endorsements in online articles or blogs to feature particular products without making it clear that they were paid promotions. This lack of transparency could mislead consumers. The CMA has since secured undertakings from these businesses to ensure all advertising and other marketing in articles and blogs is clearly labelled or identified so that it is distinguishable from the opinion of the journalist or blogger. The CMA has also written to several other companies including 33 publishers of online articles and 13 marketing businesses, to warn them of similar offences.

The open letters reiterate the steps required in order to comply with consumer protection law with the CMA commenting that “the use of editorial content in the media to promote a product where a trader has paid (financially or otherwise) for the promotion, without making this clear to the consumer, is unlawful and may lead to enforcement action”. The CMA has also produced three brief guides for businesses summarising what businesses and online publishers should do to make sure they comply with consumer protection law.

For further information on what you need to do to ensure compliance with consumer protection law, please contact Nicola Broadhurst or another member of the Commercial team at Stevens & Bolton LLP.

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