In April of this year, the South Australian Tourism Commission (SATC) came under a media fire storm when it was exposed that they had paid celebrities to tweet about Kangaroo Island. Some examples of the tweets:
None of the tweets revealed that the celebrities were paid to post the tweet or that the tweet was connected to a campaign for the SATC. The concern from a legal perspective was whether the tweets went as far as misleading consumers into thinking that they were genuine endorsements by the celebrities.
Shortly after the SATC campaign was exposed, the Australian Competition and Consumer Commission (ACCC) issued a statement that celebrities do not necessarily need to disclose that they are being paid, however it was important that in all instances celebrities’ tweets or Facebook posts were truthful. This is in line with the consumer protection contained in the Australian Consumer Law (ACL) in section 18 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (CCA) which prohibits misleading and deceptive conduct in trade and commerce.
Whilst the use of celebrity endorsements in social media remains largely untested in Australia, the well-known case of ACCC v Advanced Medical Institute Pty Ltd (No 3)  FCA (the Turpie case) reinforced that celebrity endorsements will be deemed misleading or deceptive conduct under the ACL where the celebrity falsely represents that he/she has used and found benefit in a particular product/service. In the Turpie case, it was held that Ian Turpie falsely claimed that the AMI nasal delivery system had cured or alleviated the effects of his erectile disfunction (which he did not in fact suffer from), and as such, he was in breach of the s52 of the Trade Practices Act (now replaced by the CCA). The advertiser was also found to be in breach by knowingly preparing and causing the misleading advertisements to be published.
In the US, the US Federal Trade Commission (FTC) has issued guidelines which generally recommend that paid endorsements communicated via social media make mention of the fact that the endorser is being paid for the statement, unless it is reasonably known that the celebrity is a paid endorser (e.g. Usain Bolt for Gatorade). The FTC endorsed the growing practice to use hashtags such ‘#paid ad’, ‘#paid’, or ‘#ad’ to indicate the tweets are paid or part of a campaign.
This practice has also gained momentum in the UK after Katie Price and Rio Ferdinard posted out-of-character tweets (Ferdinand gave the impression that he had become keen on knitting cardigans and Katie Price referred to China’s GDP and Eurozone debt), followed by pictures of themselves eating a Snickers bar with the advertising slogan “You’re not you when you’re hungry”, and the hashtag ‘#spon’, indicating that the tweet had been paid for. The UK Advertising Standards Authority (ASA), which is similar to the Australian Advertising Standards Board (ASB) ruled that the initial ‘out-of-character’ tweets did amount to a marketing message but, considering that consumers would understand each series of tweets was a marketing communication when viewed in its entirety, it was acceptable that preceding tweets were not individually disclosed as adverts.
The UK and US position provides insight into best practice standards that may come to apply in Australia. So what should agencies consider when engaging celebrity endorsers to spruik their clients’ products? Here at von Muenster Solicitors, we suggest bearing in mind the following principles:
Contact the von Muenster team for further advice or if we can assist with preparing a social media legal strategy. Of interest may also be our recent article ‘ASB and ACCC rule, Facebook not just a social media tool’ regarding the risks of not monitoring consumer posts on brand social media pages.