MPs have launched an investigation into the power influencers wield over their social media platforms after concerns were raised about ad violations.
The Digital, Culture, Media and Sport Committee (DCMS) will investigate how beauty gurus with large followers on social media promote products.
It comes after the UK’s Advertising Standards Authority banned Swedish bank Klarna’s ‘irresponsible’ campaign encouraging customers to use credit to ‘buy now, pay later’ to cheer themselves up during the lockdown.
The committee highlighted a Competition and Markets Authority (CMA) report in which more than three-quarters of influencers found ‘covered’ disclosures about being paid to promote a product in their posts.
This is despite current advertising rules requiring paid social media posts to include an ‘AD’ notice to ensure customer transparency.
The Digital, Culture, Media and Sport Committee (DCMS) will investigate how beauty gurus with a large social media promote after products. Pictured, an ad from Klarna
Another Advertising Standards Authority (ASA) survey published earlier this month followed the accounts of more than 100 UK-based influencers.
It found adherence to advertising rules to be unacceptably low.
The DCMS committee wants to assess the impact of influencers on media and popular culture – including the positive role they can play.
Julian Knight, the chair of the committee, said: “Influencers have a growing power over people’s lives. We want to know how influencer culture works and what impact it has.
There is a concern that while influencers are useful for advertisers to reach the right markets on social media, there is a lack of transparency around the promotion of products or services.
‘We are going to see whether there is a need for stricter regulations in this area and what form this can take.’
The committee highlighted a Competition and Markets Authority (CMA) report in which more than three-quarters of influencers found ‘covered’ disclosures about being paid to promote a product in their posts. Pictured, one of the banned Klarna ads
To initiate the investigation, the committee requested written comments from stakeholders on May 7, addressing, among other things: how to define influencers; how they influenced popular culture; and how technology companies encourage or disrupt their operations.
The investigation comes just months after a Klarna campaign was banned after hiring four influencers on Instagram to encourage their followers to use the bank’s services to “ improve their mood. ”
Klarna allows customers to pay for products in installments with no fees or interest and has more than 10 million customers in the UK.
It claims the ads were intended to encourage customers to take care of themselves during the lockdown period and to improve mental health.
Influencers Bradley Harper, Claire Menary, Aisha Master, and Yasmin Fatollahy told the watchdog that their posts were about the uplifting effects of products rather than shopping at Klarna.
The investigation comes just months after a Klarna campaign was banned after hiring four influencers on Instagram to encourage their followers to use the bank’s services to “ improve their mood. ” Pictured, one of the ads
The ASA said, “We recognize that buying non-essential items was likely a source of comfort to some people during the national lockdown. However, each ad promoted the use of Klarna’s deferred payment services.
“ We concluded that in the context of the challenging circumstances brought about by the lockdown at the time, including the impact on people’s financial and mental health, the ads irresponsibly encouraged the use of credit to improve people’s mood.
Stella told Creasy The sun: ‘I have complained to the ASA about the ads that companies like Klarna use because – as with payday lenders – it is irresponsible to force people to spend money to feel better.
UK Advertising Standards Authority has banned Swedish bank Klarna’s ‘irresponsible’ campaign after receiving complaint from Labor MP Stella Creasy
In April, the bank hired four Instagram influencers to encourage their followers to use Klarna’s services to “ improve their mood. ”
“Especially in a pandemic where so many people are losing their jobs and struggling with being at home, it is downright immoral.”
A spokesman for Klarna said: “We are of course disappointed with this decision and have removed the four posts marked by the ASA. We understand our commitments and take our role as an advertiser very seriously, especially in the context of supporting responsible spending and financial wellbeing during this unique and challenging year for UK consumers.
While we always adhere to all available ‘influencer’ guidelines and are compliant with partner signage, we support greater clarity in this area. This is honestly a bigger topic than us, it is regulated or not across all brands and industries and we believe some leadership is required in this, we are establishing an influencers opinion leader board consisting of media owners, consumers, wellness partner and influencers with the intention to provide all brands in this space with better guidance and thereby to support the ASA on this subject and to get in touch with each other.
Klarna, valued at £ 7.48 billion in September, has more than 90 million users worldwide and 200,000 retailers.