Hidden Advertising and Social Media
The advertising market is changing, and indirect—or, worse yet, hidden—advertising has become increasingly common on the internet and on the most popular social networks.
Indirect advertising is a type of advertising that appears clearly and explicitly in spaces not typically used for advertising, without being identified as such. Hidden advertising, on the other hand, is advertising that occurs in a non-obvious manner. This practice is prohibited by Italian law, but only with regard to television. And, although movies and TV shows are fertile ground for the proliferation of this type of sponsorship, new challenges have emerged, particularly on social media. In fact, since these platforms represent a new opportunity to express one’s thoughts, interests, and tastes, as well as a new way to learn and share information and content, companies have also begun to use them, either explicitly or in a more subtle manner.
On the one hand, there are actual advertisements, such as disclosed sponsorships, even if they are not fully regulated: Facebook and Instagram, for example, verify that ads do not contain illegal content or content prohibited by their internal policies, but they do not verify the accuracy of the information provided, nor do they ensure its compliance with regulations, since there is no code of conduct to be followed.
On the other hand, there is advertising that isn’t explicitly labeled as such but is still present—so-called product placement within the most-clicked profiles.
In this regard, last January the Competition and Markets Authority, the UK government agency responsible for protecting competition in the markets, ruled against hidden advertising—that is, advertising that is indistinguishable from ordinary content in published photos or videos. Some time earlier, the U.S. Federal Trade Commission had gone much further, addressing the issue for the first time by asking celebrities in fashion and sports, as well as influencers in general, to make their lucrative commercial partnerships recognizable through hashtags or comments.
However, there is still no relevant legislation, and even the terms of use for sites like Instagram do not include any specific rules. This raises the question of whether such activities comply with the laws of our legal system, particularly with regard to consumer protection: consumers should not only be shielded from false and misleading advertisements, but they also have the right to distinguish between content intended for advertising purposes and content that is purely “trendy.”
Recently, the National Consumers’ Union submitted a request to the Italian Competition and Market Authority asking it to investigate the legality of hidden advertising on social media. The legal basis for this complaint is Article 22 of the Consumer Code, which states that commercial intent must be explicitly indicated if it is not made clear by the context or, in any case, if it is likely to mislead the consumer.
The AGCM should therefore clarify the matter and provide adequate information both on the internal relationship between the producer and the influencer, and on the need to explicitly state—in a manner that leaves no room for misunderstanding—that the activity is for advertising purposes.
Meanwhile, Instagram has launched a new tag,“Paid Partnership with,”so that users can include it in both Stories and posts to indicate the presence of an advertisement. Alternatively, many bloggers—the most famous of whom is Chiara Ferragni—have started using certain“disclosure hashtags,” such as #ad, #advertisement, or #pubblicità, to highlight the commercial purpose of their photos, thereby contributing—albeit insufficiently—to consumer protection.