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Influencer marketing: businesses and influencers must be transparent when advertising on social media

Consumers must be able to easily recognize when social media content is actually an advertisement.

The Competition Bureau sent letters to close to one hundred brands and marketing agencies involved in influencer marketing in Canada, advising that they review their marketing practices to ensure they comply with the law.

“When navigating the digital marketplace, consumers often rely on the opinions shared by influencers,” Matthew Boswell, Commissioner of Competition said. “To make informed purchasing decisions, consumers must know if these opinions are independent or an advertisement. Ensuring the truth in advertising in Canada’s digital economy is a priority for the Competition Bureau.”

Influencers should clearly disclose the relationships they have with the business, product or service they promote. There is a relationship if the influencer receives money or commissions, free products or services, discounts, free trips or tickets to events, or has a business or family connection with the brand, among other things.

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Influencers should also be honest, and base any reviews and testimonials on actual experience. The Competition Act applies to influencer marketing just as it would to traditional forms of advertising.

Businesses share responsibility with influencers when they post advertisements on social media, as they may be liable for false or misleading content. Advertisers may pay or compensate influencers to create and share content that feature their products or brands.

The Bureau reached out to brands and marketing agencies following a thorough review of influencer marketing practices across various industries, including health and beauty, fashion, technology and travel.

The deceptive marketing practices provisions of the Competition Act apply to anyone who is promoting a product, service, or any business interest, and those who do not comply may face significant penalties.

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