Influencer Marketing & Consumer Rights: The Importance of Clear Disclosure

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We recently attended a conference hosted by the Malta Competition and Consumer Affairs Authority (MCCAA) on influencer marketing, where important discussions were held regarding consumer rights, transparency, and the ethical responsibilities of influencers and brands.

Influencer marketing has quickly become a cornerstone of digital advertising. Brands tap into influencers’ large followings to promote products and services, often blending these promotions with their everyday content to make them feel more authentic. But this raises a crucial question: Are consumers always aware that they’re viewing paid advertisements? And is it ethical to influence their purchasing decisions without clear disclosure?

Consumers’ Right to Be Informed

Consumers have a fundamental legal right to make informed purchasing decisions. For this right to be fully protected, there must be a clear distinction between commercial content (advertising) and non-commercial content (personal or organic posts). When marketing practices blur this line, they can mislead consumers, violating consumer protection laws designed to prevent deceptive or unfair practices.

Under the Unfair Commercial Practices Regulations (UCPR), any marketing practice that misleads consumers—especially regarding the commercial intent behind content—can be considered illegal. These regulations specifically prohibit practices such as:

  • Concealing the commercial intent of a commercial practice
  • Falsely claiming or implying that a trader is not acting for purposes related to their trade or business
  • Falsely representing oneself as a consumer

These laws also define “traders” as anyone—individuals or businesses—engaging in commercial practices, including influencers who promote products or services.

What Qualifies as Commercial Content?

Influencer marketing can take several forms, and each type of content must be clearly disclosed as commercial. Here are the main types of commercial content:

  1. Paid endorsements: Influencers are compensated to create content promoting a product or service, whether it’s a temporary post (e.g., stories) or a longer-term partnership.
  2. Barter arrangements: Influencers receive free products or services in exchange for promoting the brand.
  3. Affiliate marketing: Influencers earn a commission from sales made through their affiliate links or discount codes.
  4. Personal product promotions: Influencers (or any person) who promotes their own business products or services.

Each of these forms of content must be disclosed to avoid misleading the audience into thinking the content is organic or non-commercial. Whether you have 100 followers or a million, any exchange between you and a brand/agency—whether it’s payment, free products, or affiliate commissions—is considered commercial content.

Best Practices for Disclosure

The MCCAA made it clear that influencer marketing must follow certain best practices to ensure transparency and protect consumers. Here’s a quick guide to proper disclosure:

  • Clearly label commercial content: Use labels such as “Ad,” “Advert,” or “Advertising” to indicate paid content.
  • Label each post individually: Every post, reel, story, or video containing commercial content should have a clear disclosure.
  • Use platform-specific tools: Social media platforms like Instagram and TikTok provide tools like “Paid Partnership” or “Sponsored” tags—make sure to use them.
  • Visibility is key: Disclosures should be placed at the beginning of the post, at the start of the caption, or on the first screen of a video. They should stand out against the background.

What Not to Do

While the guidelines for proper disclosure are clear, some influencers and brands still make mistakes. These are examples of unacceptable disclosures:

  • Simply thanking a brand without clarifying that it’s an advert.
  • Verbally disclosing that the content is an ad but failing to label it in the post itself.
  • Using vague terms like “gifted,” “collab,” or “partner” without specifying the commercial nature of the content.
  • Disclosing the advertisement only in the influencer’s bio or profile.
  • Tagging the brand without any clear indication that the post is a paid promotion.
  • Hiding the disclosure behind the “read more” link or placing it at the end of a post, where it’s easily missed.
  • Using a background that makes the disclosure hard to read or barely visible.

Legal Consequences of Non-Compliance

Failure to properly disclose commercial content can result in serious consequences. According to the Unfair Commercial Practices Regulations (Part VIII of the Consumer Affairs Act), failing to disclose a commercial relationship is considered a violation of consumer protection laws. Non-compliance can lead to legal actions initiated by the Director General of Consumer Affairs, including penalties and compliance orders from the Civil Courts.

Last year, the MCCAA conducted a sweep of 576 influencers—14 of whom were based in Malta—to check if they were adhering to these regulations. The findings were concerning:

  • 97% of influencers posted commercial content, but only 20% disclosed it as an ad.
  • 38% of influencers used terms like “collab” or simply thanked the brand without any mention of advertising.
  • 40% of influencers failed to make the disclosure visible for the entire duration of the ad.
  • 40% endorsed their own products, but 60% did not use the “Ad” label

Worse still, all 14 Maltese influencers were found non-compliant with the regulations. This highlights a serious issue that the MCCAA is taking very seriously. They have announced plans for another round of investigations, but before diving into enforcement, they emphasised the importance of education—making it clear that it is the responsibility of everyone in the influencer marketing ecosystem to understand and comply with the law.

Why Brands and Agencies Must Prioritise Compliance

As a digital marketing agency, Bullshark is deeply committed to driving ethical and transparent marketing practices. We believe that brands have a responsibility not only to their customers but also to their partners and influencers, to foster an environment of honesty and integrity in advertising.

Influencers wield significant power in shaping consumer behaviour. But with that power comes responsibility. As a brand, it is crucial to work with influencers who understand and adhere to the legal requirements surrounding their promotional content. Ensuring clear and honest disclosure builds trust, promotes transparency, and strengthens the overall effectiveness of the campaign.

At Bullshark, we stay at the forefront of these developments, attending key conferences like the MCCAA’s recent session to stay updated on evolving regulations and best practices. As thought leaders in digital marketing, we are committed to ensuring that our clients comply with these guidelines while executing campaigns that are both effective and ethically sound.

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