The Australian Competition and Consumer Commission (ACCC) is cracking down on influencers who fail to disclose the fact they were paid to promote a product or service online.
The regulator said last week it was looking into more than 100 influencers after tip-offs from the public.
ACCC Chair Gina Cass-Gottlieb said there was clearly “community concern about the ever-increasing number of manipulative marketing techniques on social media”.
“With more Australians choosing to shop online, consumers often rely on reviews and testimonials when making purchases, but misleading endorsements can be very harmful,” she said.
“It is important social media influencers are clear if there are any commercial motivations behind their posts. This includes those posts that are incentivised and presented as impartial but are not.
“The ACCC will not hesitate to take action where we see consumers are at risk of being misled or deceived by a testimonial, and there is potential for significant harm.”
What the ACCC said it is looking for are instances where brands, advertisers, and influencers try to hide the fact they have a cash-for-comment relationship.
Areas of particular concern for the regulator are fashion, cosmetics, food, wellbeing, travel, parenting, gaming, and technology.
Influencers and brands who fail to be transparent about their advertising deals could face hefty fines of up to $2.5 million.
Minister for Financial Services Stephen Jones said last week that the ACCC crackdown was about “sending a message” to people on social media that “the internet is not a law-free zone”.
“If you are conducting commerce online, then the rules that apply in bricks and mortar and to mainstream media also apply online, and we want to ensure that if people are getting cash for comment, then they declare it,” he said.
Failure to disclose relationships between companies and influencers happens to even the most popular influencers.
Last year, US regulators fined Kim Kardashian $1.5 million for shilling a cryptocurrency to her 330 million Instagram followers.
The settlement also bans her from promoting cryptocurrencies for three years.