Antitrust Law Daily Wrap Up, ADVERTISING NEWS: U.K. CMA acts to halt deceptive online marketing practices, (Aug 15, 2016)

By Linda O’Brien, J.D., LL.M.

In two separate cases, the U.K. Competition and Markets Authority (CMA) has obtained undertakings from a social media marketing company and a clothing retailer to prevent misleading online practices, the agency has announced.

In the first case, the CMA secured undertakings from Social Chain Ltd., using its consumer protection powers following an enforcement action. Social Chain, a U.K.-based marketing company that arranges advertising for businesses through social media, has now agreed not to post or arrange undisclosed advertising.

A CMA investigation found that Social Chain used its own social media accounts and arranged for widely followed social media personalities, to promote films, games, and takeaway and dating apps, without readers being informed that the content was paid-for advertising.

Between March and July 2015, 19 marketing campaigns that Social Chain arranged involved undisclosed advertising. These promotions appeared on social media accounts with a combined reach of around four million followers. Social Chain’s activities also helped to ensure that some of these campaigns trended on Twitter, which may have increased their readership further.

In the undertaking, Social Chain accepts that the advertising, which was posted on Twitter, YouTube, and Instagram, may have been difficult for readers to distinguish from other posts, conversations, and jokes they appeared alongside. After the issue was raised with Social Chain, the company agreed to ensure that all advertising that Social Chain posts or arranges will be clearly labelled or identified so that it is distinguishable from other content found on social media.

In a second case, following another investigation, the CMA has secured undertakings from Woolovers Limited, a knitwear retailer, to ensure that it will publish all genuine, relevant and lawful customer reviews on its website, and will not suppress unfavorable reviews.

The CMA investigation found that, from December 2014 to November 2015, Woolovers “cherry-picked” more favorable customer reviews for publication on its website. Woolovers staff was instructed to approve only a selection of reviews, and none below four stars. This resulted in almost half of the reviews it received during the period going unpublished.

“Social media personalities can have an important influence on people’s views, especially young people,” said Nisha Arora, CMA Senior Director for Consumer Enforcement. “It is therefore crucial that when people decide what to buy, they should not be misled by adverts on social media that read like independent opinions. Businesses, marketing companies and authors of online content all need to play their role in ensuring that advertising is clearly labelled as such.”

Companies: Social Chain Ltd.; Woolovers Limited

News: Advertising ConsumerProtection