Guest post by Sabrina Tosi

Influencer Law Clinic series

1/21/20223 min read

To make it easier, in today’s ‘platform society’ consumers are able to make use of other (to them probably unknown) users’ reviews on the products or services they intend to buy. Not only, but by following a social media account which offers content relating to a specific topic, one is able to be introduced to new brands or products he/she might be interested in.

Social media influencers are the owners of these accounts and they are known for their power to monetize content thanks to the significant social media audience that they enjoy.[1] They are called ‘influencers’ because, through the making and sharing of content, they have the capacity of influencing others’ behaviour and, more specifically, consumer behaviour. Thanks to the trust and relatability that consumers find in such individuals, influencers have become important actors in shaping online shopping.[2]

Naturally, some issues have arisen from it. One of the most manifest when dealing with reviews is how to understand whether a review post or video is real or not. In other words, how can consumers differentiate between a situation when they are presented with an objective product review of the influencer acting as an independent actor or when, instead, with a sponsored activity of a company.

Due to the influential character of this practice, for a long time policymakers have tried to regulate it in order to ensure consumer protection but legal certainty has never been achieved. Finally, the Bundesgerichtshof (hereinafter: BGH) pronounced itself in September 2021 on the issue of whether influencers need to label their social media posts to make sure consumers know what situation they are presented with.

It was a series of three judgements (case I ZR 90/20; case I ZR 125/20; case I/ZR 126/20) which involved the Germany’s Association of Social Competition, responsible for safeguarding fair trading, and three influencers, which allegedly violated the labelling requirement.

The Court took a firm position imposing that ‘advertising must be clearly identifiable as such and clearly separated from the rest of the content of the offers’.[3]

How? The BGH did not explicitly mention the exact form in which the post should be labelled. However, from previous case law it is clear that even when tap tags are present, an immediate notice shall be present. Terms “Anzeige” or “Werbung” (German translation of advertisement) are considered sufficient and shall appear next to the image. For what concerns English terms such as ‘advertisement’,‘ad’ or ‘sponsored’, it is still unclear whether these are considered to be sufficient disclosure.[4]

In the first case, it held that the offering of goods and services in favour of a third-party company by an influencer is considered a commercial practice. This, if the influencer received compensation or, in case of no compensation of any kind, if ‘the contribution is exaggeratedly promotional according to the overall impression’.[5] In other words, if no critical distance was taken by the influencer while highlighting the advantages of the product or services so that the post would appear as a mere review without marketing purposes. Accordingly, ‘tap tags’[6] also fall under this section if they mention the product or service in an incoherent manner and require to be clearly labelled as advertisements.

The second and third cases concerned Instagram posts carried out by the influencers solely for the benefit of their own business. Since the activity does not fall under the definition of commercial advertising provided for in German law, no advertising label is required.[7]

Overall, although some aspects still need to be clarified (such as whether English terms are accepted or what exactly consideration entails), the ruling brought some clarity on the matter which was very much needed.

[1] Catalina Goanta, Sofia Ranchordás, ‘The Regulation of Social Media Influencers’, 2020

[2] The Impact of Social Media Influencers on Purchase Intention and the Mediation Effect of Customer Attitude <http://ganj-ie.iust.ac.ir:8081/images/2/22/Ajbr170035.pdf>

[3] https://www.euronews.com/2021/09/09/instagram-influencers-must-clearly-label-paid-adverts-says-german-court

[4] The BGH held that ‘sponsored by’ cannot be understood by German readers of a newspaper. <https://mediawrites.law/international-influencer-marketing-in-germany-ad-might-not-be-enough/>

[5] Bundesgerichtshof zur Pflicht von Influencerinnen, ihre Instagram-Beiträge als Werbung zu kennzeichnen, Bundesgerightshof <https://www.bundesgerichtshof.de/SharedDocs/Pressemitteilungen/DE/2021/2021170.html>

[6] A tap tag is a link which, when clicked onto, it forwards the user to the profile of the company or influencer selling the specific product or service.

[7] <https://mediawrites.law/germany-the-use-of-influencers-in-social-media-the-latest-hat-trick-of-the-bgh/>