ACCC Report: 81% of Influencer Posts May Mislead Consumers

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The use of social media services in Australia raises a range of concerns, as highlighted in the latest inquiry report by the Australian Competition and Consumer Commission (ACCC).

Before April ends, the sixth interim report of the Digital Platforms Services Inquiry was released with the aim of analysing how social media is utilised by consumers, businesses, advertisers, and influencers across Australia, while also identifying competition and consumer issues associated with social media services.

According to ACCC Chair Gina Cass-Gottlieb, the report underscores the necessity for reform, including mandatory reporting processes for consumers and businesses and removing scams, harmful apps, and fake reviews from social media platforms.

“Consumers are unable to make informed choices about purchases when endorsements and sponsored posts are not disclosed,” Cass-Gottlieb said.

“Social media services are an essential part of our daily lives and have provided many benefits to society. But we are concerned about social media platforms’ influence over users and their position as critical intermediaries for businesses to reach customers.”

In its latest analysis report, the ACCC has drawn attention to the remarkable expansion of the influencer marketing industry and expressed concerns about the lack of adequate disclosure of sponsored posts by influencers and brands. The inquiry report indicates that the global influencer marketing industry is predicted to skyrocket from US$6 billion in 2020 to a staggering US$24.1 billion by 2025.

Despite the rapid growth of the influencer marketing industry, the independent Commonwealth statutory authority’s latest analysis report also raises concerns about the insufficient disclosure of sponsored posts by both influencers and brands. 

After identifying potential misleading endorsements and testimonials in social media posts, the ACCC announced that it would conduct compliance, education, and potential enforcement activities. Influencers who violate the Australian Consumer Law can be fined up to $2.5 million.

The report underscores the need for reform and specific mandatory processes to protect consumers and businesses.

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