Influencer Marketing: The legal framework in the digital age – opportunities and challenges for brands and influencer
Noëlle Glaus
Legal Associate
Luca Hitz
Senior Legal Associate
The power of social media has brought a new age of marketing – the age of the influencer. In recent years, people with a dedicated online followership have become sought-after brand and product ambassadors. Influencer marketing, based on collaboration between companies and influential content creators, has become an effective way to reach specific audiences and increase brand awareness. Behind the carefully orchestrated, but effortless-looking posts lies a complex world that raises legal, ethical and strategic questions. In this article, we take a look at the legal basics of influencer marketing and shed light on the many aspects of advertising law that need to be considered.
Legal Frame
Influencer marketing as such is not covered by specific legislation in Switzerland. However, influencers regularly influence competition with their advertising contributions on social media platforms and are considered to be participants in competition. The Federal Act of Unfair Competition («UCA») is therefore applicable.
The UCA aims to ensure fair and genuine competition in the interests of all participants by regulating market-relevant practices. It is therefore concerned with conduct that is likely to influence market or competitive conditions. A social media post with a commercial or sales-promoting purpose (e.g. increasing the level of awareness of a company/product, improving the market position vis-à-vis competitors) thus is therefore covered by the UCA. It is irrelevant whether an influencer receives a (monetary) consideration for a post or whether he or she actually has the intention to be commercially active.
In addition, the Swiss Commission on Fair Trading (Schweizerische Lauterkeitskommission, «SLK») has drawn up non-binding «Principles of Fair Trading in Commercial Communication» («Grundsätze Lauterkeit in der kommerziellen Kommunikation», «SLK-GS»), which represent the industry-specific and appropriate fairness rules as a standard. The aim of the SLK-GS is to promote fair business practices in commercial communications and to strengthen the public's trust in commercial communication.
What does Advertising actually mean?
The UCA does not define the term «advertising». The SLK-GS describe advertising as «commercial communication». According to the SLK, commercial communication is to be understood as any measure that systematically influences a certain number of persons in their attitude towards certain products or whose main purpose is the conclusion of a legal transaction. Commercial communication thus includes all forms of advertising, influencing and sales promotion.
Does commercial Communication on Social Media have to be labelled as such?
In Switzerland, there is no specific legal standard for the labelling of commercial communications. However, the principle of the duty of separation derives from the requirement of clarity in advertising enshrined in Art. 2 UCA. The separation requirement consists of two components: On the one hand, it is required that advertising measures can be clearly separated from other content (separation requirement). On the other hand, advertising must be recognisable (recognisability).
The SLK-GS also stipulate that commercial communication, regardless of the form in which it appears or the medium used, is unfair if it is not clearly recognisable as such and is not clearly separated from the other content. The SLK-GS also explicitly provide for a disclosure obligation for users of social media platforms if the advertising is not clearly recognisable as such for other users. It follows that labelling can be waived if the commercial nature is obvious in the individual case. It is a matter of discretion as to when the commercial nature is deemed to be obvious.
The SLK gives its opinion in several recommendations. In the opinion of the SLK, a post with an advertising character must be explicitly labelled as advertising if the relevant audience does not clearly recognise the post as commercial communication. All that is required is that the commercial nature of the post is recognisable in the light of the concrete circumstances of the individual case. The SLK bases this on the understanding of the averagely understanding, enlightened and informed member of the addressed audience. Particularly in the case of influencers with a wide reach, the recognisability of the advertising character can almost always be confirmed. On the other hand, in the case of influencers with a smaller number of followers, additional circumstances must point to the promotional nature in order for recognisability to be assumed.
Are there Penalties for not labelling?
Violations of Art. 2 UCA cannot be punished under criminal law. The SLK also has no sanctioning powers, as it is not constituted as a state court. However, the SLK can identify violations of the SLK-GS and make recommendations. If a reprimanded party does not comply with the SLK's recommendation, the SLK can publish its decision, naming and shaming the defaulting party.
Reach and reputation are generally considered to be the most valuable "capital" of an influencer. Despite the lack of (criminal) sanctions, the SLK's "naming and shaming" is therefore an important way of punishing unfair influencer marketing.
A View to Germany
In contrast to the Swiss UCA, a specific labelling obligation was included in the German UCA. According to this provision, anyone who fails to disclose the commercial purpose of a commercial act acts unfairly if this is not immediately apparent from the circumstances and the failure to disclose is likely to cause the consumer or other market participant to make a commercial decision that he would not have made otherwise. There is no commercial purpose to an act for the benefit of another undertaking if the trader does not receive or accept the promise of remuneration or similar consideration from the other undertaking for the act. This means that linking companies without receiving any financial consideration in return does not constitute commercial communication.
A View to France
In June 2023, the French parliament drafted a law that provides detailed rules for influencer marketing. The law defines influencing as a new professional category. According to the law, an influencer is a person who uses his or her own popularity on social media for financial interests and in doing so directly or indirectly advertises services or goods. The law covers influencers who address a French audience, regardless of where the influencer is located («extraterritorial application»). In addition, the law stipulates that retouched or virtual images must be labelled as such. Advertising for products that are harmful to health or cosmetic surgery is also explicitly prohibited. Violations of the law can be punished with up to two years in prison and a fine of up to 300,000 euros.
Conclusion
In summary, commercial posts on social media platforms in Switzerland must only be labelled as advertising if it is not clear from the circumstances and from the perspective of an average addressee that the post is of an advertising nature. In such cases, we recommend the use of the hashtags #Ad or #Werbung, for example, which should be clearly visible.
We are happy to support you in questions relating to commercial communication, Influencer Marketing as well as other, competition law issues.
