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ACCC investigation finds over 80% of influencers post ‘potentially misleading advertising’

The Australian Competition & Consumer Commission (ACCC) has provided an update on its ongoing investigation into misleading online reviews and influencer endorsements.

Two reports released by the statutory authority today outline that of 118 social media influencers reviewed in the sweep, 81% were found to be “making posts that raised concerns under the Australian Consumer Law for potentially misleading advertising”.

Influencers with majority having large followings on Instagram, TikTok, Snapchat, YouTube, Facebook and Twitch across seven sectors were reviewed – fashion, beauty, food and beverage, travel and lifestyle, health fitness and wellbeing, home and parenting, and gaming and technology.

96% of fashion influencers were found to be making “concerning posts”, while 73% of posts made by gaming and technology also raised concern.

“Influencers often cultivate an image of themselves as being relatable and genuine, which can create an element of trust with their followers when it comes to recommendations,” ACCC acting chair, Catriona Lowe, said.

“Based on the findings of our sweep, we are concerned that influencers, brands and advertisers are taking advantage of consumers’ trust through hidden advertising in social media posts by influencers.”

The most common issue in the review was the fact that influencers were not disclosing brand relationships in their posts, while some used “vague or confusing language” to disclose advertising, such as “spon” instead of “sponsored”.

In a separate report, the ACCC also revealed that 37% of 137 businesses reviewed were found to be manipulating online reviews.

Sectors such as household appliances and electronics, beauty products, and home improvement and household products and services were found to have the highest rate of potentially fake or misleading online reviews, with the investigation discovering that some businesses were using third-party professional reviewers and review removalists to increase their reputation.

“Businesses that seek to create fake reviews or edit or remove genuine negative reviews, with the intention of inflating their own ratings, lowering their competitors’ ratings, or hiding genuine negative reviews from the public, are in breach of the Australian Consumer Law,” Lowe said.

“Whilst it may be important to businesses to manage their online reputation, they need to ensure that in doing so they are not misleading consumers.

“The ACCC will continue to monitor businesses that offer services to facilitate the manipulation of consumer reviews, including the removal, blocking or prevention of legitimate consumer reviews about a product, service or business.”

The ACCC is expected to release guidance for influencers and businesses in early 2024.

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