What is a social media influencer?

Although the term 'social media influencer' (or simply 'influencer') has become increasingly popular in recent years, what does it mean to be one? An influencer is described as "someone who affects or changes the way that other people behave, for example through their use of social media".(1)

The Influencer Marketing Hub recently published The State of Influencer Marketing 2019: Benchmark Report, which showed that influencer marketing has grown exponentially in the past couple of years.(2) According to the report, as of 2018 there are 720 influencer marketing platforms, which is 320 more agencies than in 2017. Further, the market for influencer marketing was worth $4.6 billion in 2018 and this is projected to increase to $6.5 billion by the end of 2019.

Being an influencer generally starts as entertainment or self-amusement on social media. However, as influencers start to receive income from placing ads in their posts and collaborating with third parties, their activities start to resemble business activities. For this reason, influencers are becoming the subject of the same regulatory rules as business owners, even though they do not fit the traditional definition of business owners.

Protecting influencer images

Influencer content and businesses are protected by various branches of Turkish law. Because influencers are natural people, their personal rights are protected under Article 23 et seq of the Civil Code as well as the Law on the Protection of Personal Data (6698). These laws ensure that personal rights are protected and grant influencers a legal means to challenge any attacks against their personality.

On the other hand, influencer images and content are copyright protected under the Law on Intellectual and Artistic Works, as they can be considered works of art. Such content is also subject to the rules on unfair competition under the Commercial Code.

An influencer's brand and name can be subject to trademark law under the Industrial Property Law (6769) if they become sufficiently distinctive and indicate a certain standard or quality regarding certain goods or services.

Influencer advertising

Until recently, influencers were unclassifiable under the law and therefore unregulated; however, their social media activity – particularly ads placed in their posts – is now subject to regulation. Accordingly, several national courts in Europe (eg, Germany) have evaluated social media advertising and set out rules by which all influencers must abide. While the Turkish courts have yet to render an opinion on the matter, influencers must follow certain regulative norms that apply to all advertising activities, including advertising laws, fair competition rules and tax regulations.

Fair advertising and consumer protection

Influencer ads must comply with the general advertising principles set out in the Regulation on Commercial Advertisements and Unfair Commercial Practices. Accordingly, influencer ads must be true, honest and comply with general principles of morality, honour and human rights. For example, influencers are prohibited from placing ads which could be considered insulting on racial or ethnic grounds.

In accordance with Article 6 of the Regulation on Commercial Advertisements and Unfair Commercial Practices, influencers must inform consumers if their social media post is an ad (eg, when collaborating with a third party or advertising a product). Influencers cannot disguise advertising in their posts via product placement or personal use. In many jurisdictions, influencers include a hashtag such as '#ad' or '#advertisement' in their posts to comply with this requirement, a practice which is highly recommended.

One of the most common ways that influencers advertise products or services and catch consumers' attention is through raffles and giveaways. Under Article 15 of the Regulation on Commercial Advertisements and Unfair Commercial Practices, products or services distributed via a raffle or giveaway must comply with certain quality standards and meet reasonable consumer expectations. Article 15 ensures that even though consumers receive such products or services free of charge, influencers must fulfill their legal obligations and deliver goods and services which meet the quality standards expected.

Depending on an influencer's professional standing, ads published on their social media platforms may also be subject to the endorsement rules set out in Article 16 of the Regulation on Commercial Advertisements and Unfair Commercial Practices. Under the provision, ads can only include endorsements that are based on the experience, knowledge or research of a person, institution or organisation.

Specific rules apply to influencers who promote a product or service in their capacity as healthcare professionals (eg, doctors, dentists, veterinarians and pharmacists). Such professionals are prohibited from making health declarations with regards to products or services via ads.

Avoiding unfair competition

The rules prohibiting unfair competition also apply to influencer ads. Article 54 et seq of the Commercial Code ensures the protection and maintenance of fair competition. Accordingly, influencer ads on social media must – above all – comply with the principle of good faith under the code.

Further, influencer ads must not be defamatory, misleading or insulting with respect to competitors' products or services. Therefore, although comparative ads are permitted in some cases, influencers cannot post ads whose sole purpose is to defame a rival company by vilifying its products or services.

To prevent unfair competition, influencers cannot place ads for products or services that are confusingly similar to those of other companies protected by industrial or IP rights. Article 54 of the Commercial Code specifically prohibits such measures to confuse consumers. Therefore, in such cases, the influencer and the company on whose behalf they posted the ad will be held liable.

Tax compliance

Influencer ads are also subject to tax regulations. In Turkey, commercial activities are subject to many types of tax, including income tax. According to the Income Tax Act and a special notice issued by the Revenue Administration in 2016,(3) a person's income is subject to income tax where they have:

  • commercial income;
  • received the income within an organisation; and
  • a continuous commercial activity.

Influencers promote company products or services and thereby contribute to their sale and increase of company revenue. Thus, as influencers' income is derived from advertising, it is considered commercial income. As regards the second requirement, influencers operate on social media platforms and use devices such as mobile phones, cameras and computers. They are therefore considered to work in an organisation and use tools or capital to receive their income. Third, their commercial activities on social media (eg, third-party collaborations and advertising) proceed continuously within a given tax period. In short, influencer advertising satisfies all three of the above requirements, subjecting social media influencers to Turkish income tax laws.

In addition to the duties set out in the Income Tax Act, influencer advertising is also subject to tax under Presidential Decree 476, as published in the Official Gazette on 15 February 2019. The decree amended a number of provisions in the Income Tax Act, the Tax Procedural Law and the Corporate Tax Law by imposing additional tax obligations on internet advertisers, which clearly includes social media influencers.

Comment

Influencer advertising and commercial activity have become increasingly widespread around the world. While some jurisdictions have embraced this change in the advertisement industry and now evaluate and regulate it alongside more traditional advertising methods, others have made little progress (eg, Turkey). New legislation and court precedent on influencer advertising is therefore essential to set out ground rules for this rapidly growing branch of business.

Endnotes

(1) See here.

(2) See here.

(3) Gelir Idaresi Baskanligi, Sayi: B.07.1.GIB.4.34.19.02-105[229-2012/VUK-1-…]—23474, T: 16 March 2016.

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