How the Omnibus Directive affects influencer advertising

How the Omnibus Directive affects influencer advertising

The Omnibus Directive, transposed in Spain by Royal Decree-Law 24/2021 of 2 November 2021, aims, among other issues, to enhance commercial transparency to improve consumer protection and to establish solid mechanisms to combat unfair practices, ensuring redress for damages in the event that consumers suffer an incident.

What has the Directive changed?

This Directive has amended different regulations, such as the Law for the Defence of Consumers and Users and the Law on Unfair Competition, and, in relation to the latter, a new wording of Article 26 has been introduced, which states that: “practices that include as information in the media or in information society services or social networks, communications to promote a good or service, with the entrepreneur or professional paying for such promotion, without it being clearly specified in the content, or through images and sounds clearly identifiable to the consumer or user, that it is advertising content, are considered unfair because they are misleading“.

In view of the above, particular reference is made to new advertising practices through influencers and content creators paid by companies and brands, which may constitute an unfair practice if it is not clearly identifiable to the user that it is indeed advertising content.

Main aspects to be taken into account

With regard to advertising via content creators, the European Commission has warned that: “(…) advertising via influencers has few characteristics that allow consumers to identify the commercial nature of the content. In most cases, the average consumer, especially children and young people, might assume that the content is presented, at least in part, as a personal opinion of the content creator and not commercial rather than as a direct and clearly identifiable advertisement“.

For this reason, particular emphasis is placed on the need for influencers and content creators to clearly identify all promotions and communications of an advertising nature. Thus, the Directive considers that the commercial element is present whenever the influencer receives any form of consideration, including money, discounts, percentage of affiliate links, free products (including unsolicited gifts), travel or invitations to events.

Accordingly, employers and brands need to be aware of such commercial communications when engaging the services of or otherwise collaborating with a content creator, as if the content creator does not clearly identify the advertising to users, the penalty could apply to both parties and not only to the influencer.

How should advertising be identified?

This identification can be done by means of hashtags such as #publi #advertising #ad #advertising in the text of the publication, as already recommended by the Code of Conduct on the use of Influencers in Advertising, or even through a disclaimer of the platform itself if permitted, as in the case of Instagram, which facilitates the inclusion of the text “Paid collaboration” in the post.

Penalties that could be imposed for non-compliance with the standard

In relation to the penalties that could be imposed, non-compliance with these new rules entails the commission of offences that may be:

• Minor, which will entail fines of between 150 and 10,000 euros;
• Serious, which will carry heavier fines of between 10,001 and 100,000 euros, although the text reserves the option to impose a fine of between 4 and 6 times the value of the illicit benefit obtained, and;
• More serious, which will result in fines of between 100,001 and 1,000,000 euros, or between 6 and 8 times the value of the illicitly obtained benefit.