Influencer marketing may be described as a mixture of old and new marketing tools, taking the idea of the celebrity endorsement and placing it into a modern social media context. In influencer marketing, a company uses a famous person, a blogger, social media profile or other influential individual to drive brand message and awareness to a specific target audience. The idea is simple: Consumers are more likely to trust those they admire, and a word-of-mouth recommendation always ranks highly. The right influencer with a big enough audience can have a great impact on consumer behaviour.
In Sweden, influencer marketing is regulated as any other form of marketing. The Swedish Marketing Act applies to all marketing, no matter the media. Influencer marketing in Sweden must therefore comply with, inter alia, the general requirement that all marketing shall be formulated and presented in such a way that it is clear that it is a matter of marketing. Subliminal advertising is prohibited. Hence, in practice, if the purpose of an influencer’s post is commercial, the post shall be marked as such. The difficult question is what this requirement actually means for those engaged in influencer marketing. For the past few years, in the absence of Swedish case law on influencer marketing, lawyers, authorities and marketers have debated what the exact disclosure requirements are.
In a judgment dated 5 December 2019, the Swedish Patent and Market Court of Appeal (the “PMCA”) clarified how influencers shall mark their commercial posts (or, rather, under what circumstances marking will be deemed insufficient). With the exception of the Patent and Market Court’s earlier (appealed) ruling in the same matter, this is the first Swedish judgment dealing with social media influencers’ non-compliance with the advertising disclosure requirement under the Swedish Marketing Act. Hence, the PMCA’s judgment should be of interest to anyone involved in influencer marketing in Sweden.
Set forth below is a summary of the case and its outcome, followed by a few comments and some general recommendations.
2. The Kissie Case
Alexandra Media Sweden AB (“Kissie”) had published two blog posts and one Instagram post, all of which promoted the service/website “Mobilpengar.se”, in commercial collaboration with Mobilåtervinning i Sverige AB (“Mobilåtervinning”). The Swedish Consumer Ombudsman (the “SCO”) initiated court proceedings in relation to these posts, asserting, inter alia, that the posts were not immediately distinguishable as marketing.
In a judgment dated 31 January 2018, the Swedish Patent and Market Court (the “PMC”) deemed that the expressions “in collaboration with” (Sw: “i samarbete med”), “sponsored post” and “#collaboration” (Sw: “#samarbete”) were, in principle, sufficiently distinct, as the average consumer would perceive these expressions as advertising disclosures.
However, according to the PMC, two of the posts were drafted and designed in such a way that it was not clear that they constituted marketing. The PMC noted in particular that the respective disclosures had been placed at the end of the two posts. Hence, the average consumer would have to read the entire posts or scroll down to the last image of each post to understand that they were in fact advertisements. Therefore, in conjunction with an overall assessment, the PMC considered that the two posts did not fulfil the disclosure requirements, as the average consumer would not be able to quickly (“on a brief contact”) understand their commercial nature. Simply put, according to the PMC the respective disclosures were not sufficiently conspicuous.
According to the PMC, the third post fulfilled the disclosure requirement, as the text “sponsored post” had been placed immediately under the heading and had been highlighted in pink. In addition, at the end of the post, Kissie had clarified that the post had been published “in collaboration with Mobilpengar.se”.
The SCO appealed the judgment to the PMCA while maintaining, inter alia, that none of the posts fulfilled the marketing disclosure requirement.
2.2 Redefinition of the Average Consumer
In its judgment dated 31 January 2018, the PMC considered that the average consumer was a woman aged between 18-34, who was an experienced social media user and a regular reader of Kissie’s blog and Instagram account. Seemingly, this definition was crucial to the PMC’s view that one of the three posts fulfilled the disclosure requirement.
The PMCA, however, noted that Kissie’s posts were available to all. Hence, to achieve a high level of consumer protection, the PMCA broadened the definition of the average consumer. According to the PMCA, the average consumer was “a young woman in Sweden”. Considering her experience of using different types of social media, the PMCA stated that “she may be presumed to have an awareness that the activities of many influencers on social media are, at least to some extent, commercial”. In other words, according to the PMCA, the average consumer’s general knowledge and level of attention were not quite as high as the PMC had presumed. Unsurprisingly, the PMCA’s position affected the court’s assessment of the three posts, as further discussed below.
2.3 The Significance of The Transactional Test
The PMCA emphasized that the legal assessment should be made with due regard to the so-called “transactional test”, according to which a marketing measure will be deemed unfair if it causes or is likely to cause the average consumer to take a transactional decision that the consumer would not have taken otherwise. Hence, the PMCA considered that it was not enough to assess whether the average consumer would quickly understand, on a brief contact with Kissie’s posts, that the posts were in fact marketing. The PMCA stressed that there is no general requirement that the average consumer should always be able to distinguish between advertising and other information after a brief exposure. Instead, according to the PMCA, when assessing whether an advertising disclosure is sufficient, the court should analyze whether the marketing omits, according to the context, information that the average consumer needs in order to take an informed transactional decision. In this examination, the PMCA stated, the court must take into account all relevant circumstances, such as how the marketing is designed, the medium in which it is published, if it is interspersed with editorial content, how the marketing is perceived by the average consumer, and how all these circumstances influence the consumer’s transactional decision.
That said, the PMCA acknowledged that such concrete examination may nonetheless result in a requirement that the average consumer should be able, after a brief exposure, to distinguish between advertising and other information.
2.4 Important Circumstances of the Case
The PMCA noted that Kissie, both on its blog and on Instagram, had alternately published paid posts (marketing) and non-commercial posts, of widely different kinds, and that Kissie had often published several posts per day. It was also clear that Kissie had written about various goods and services without any contractual relationship in relation thereto and without receiving any compensation. These circumstances, in the PMCA’s opinion, required that high standards be set for the design of the paid posts, in order for the average consumer to be able to distinguish them from non-commercial content.
It was also clear that the pictures used in the posts were central to the average consumer, that the average consumer often read the posts in a rather selective way and that the average consumer scrolled through text and pictures to stop at content of particular interest to the consumer. According to the PMCA, this consumer behaviour required that the advertising disclosure requirements be set relatively high.
In addition, the PMCA noted that Kissie’s posts contained clickable links, making it possible and easy for the consumer to visit the advertised service/website “Mobilpengar.se”. In this regard the PMCA stated, with reference to earlier case law, that a consumer who clicks on a link to visit a trader’s website has in fact made a transactional decision. Hence, according to the PMCA, marketing that contains a clickable link to a commercial website must be designed so that the consumer understands that the content is in fact marketing before the consumer clicks on the link to the advertised website.
For these reasons, the PMCA concluded that the average consumer, in order to avoid likely distortion of her ability to make an informed transactional decision, must be able to perceive, only after a brief contact with the posts, no matter in what order or how carefully the consumer read and looked at pictures, that the posts constituted marketing.
Thus, the PMCA went on to examine whether each of the posts met this requirement.
2.5 The PMCA’s Assessment
The PMCA made essentially the same assessment as the PMC regarding the two posts that the PMC had already rejected (cf. Section 2.1 above).
In addition, however, and contrary to the PMC’s position, the PMCA took the view that the expression “in collaboration with” was not in itself sufficiently disclosing. Firstly, the PMCA noted that the expression did not specify the identity of the collaborator. Hence, although the post in question included a reference to “Mobilpengar.se” and a short description of Mobilåtervinning’s service, these references were deemed insufficient because the text “in collaboration with” did not specify that Kissie had published the post in collaboration with Mobilåtervinning. Secondly, according to the PMCA, the phrase “in collaboration with” did not clarify that Kissie had in fact been paid to publish the post. Therefore, according to the PMCA the average consumer would not understand that the post constituted marketing.
The PMCA made a similar assessment in relation to the expression “#collaboration”, whilst repeating its conclusion that the term “collaboration” did not disclose, to the average consumer, that Kissie had been paid to publish the post in question.
The third post was also rejected by the PMCA. The PMCA agreed with the PMC that the expression “sponsored post” would be understood by the average consumer as an advertisement disclosure. In the PMCA’s view, however, the post had been drafted and designed in such a way that it was not clear that it constituted marketing. In particular, the PMCA noted that the expression “sponsored post” had not been used at the beginning of the post, but first in the third row, and that the expression had been presented in a significantly smaller font size compared to the main heading. In addition, the PMCA considered that the pink highlighting was not sufficient to draw the consumer’s attention to the “sponsored post” marking. According to the PMCA, the consumer’s attention would rather be drawn to other and more noticeable parts of the post, such as the main heading and the pictures. In the PMCA’s view, the phrase “in collaboration with Mobilpengar.se” did not outweigh these deficiencies, partly because it had been used at the end of the post and partly because it did not clarify that Kissie had been paid to publish the post.
The PMCA thus granted the requested injunctions against Kissie, thereby prohibiting Kissie from contributing to marketing of certain services in the current manner, or in essentially the same way so that it does not clarify that it is marketing. The injunctions were issued subject to default fines.
It should be noted that the advertising company, i.e. Mobilåtervinning, was not a party to the proceedings. Initially, when the SCO brought an action against Kissie in the PMC, the SCO argued that Kissie should be held directly liable for non-compliance with the marketing disclosure requirement. This assertion was ultimately withdrawn. Thus, in the PMCA, the SCO only invoked contributory liability as a cause of action against Kissie.
In Sweden, there is no explicit or statutory obligation to use particular expressions or specific language in marketing disclosures. The general principles of Swedish marketing law apply online. As clarified by the PMCA, the deceive question is whether the marketing omits, according to the context, information that the average consumer needs in order to take an informed transactional decision. The impact of the marketing will be assessed from the perspective of the average member of the public targeted by the marketing (the average consumer).
In practice, as emphasized by both courts in the Kissie case, in social media marketing it may be necessary to use some form of clear advertising marking in a prominent place to make it possible for the average consumer to quickly distinguish an influencer’s editorial content from paid recommendations. In light of the PMCA’s definition of the average consumer (cf. Section 2.2 above), it is fairly safe to assume that this principle applies to most influencer marketing contexts. The disclosure requirements will apparently be higher if the influencer marketing is available to all. Presumably, this is usually the case.
As clarified by the PMCA, a disclosure must be designed so that the average consumer understands that the influencer (or his/her company) has received payment for the post. In the Kissie case, the phrases “in collaboration with” and “#collaboration” did not fulfil this requirement, even though the average consumer had been defined as “a young woman in Sweden” who had “an awareness that the activities of many influencers on social media are, at least to some extent, commercial”. Hence, from now on it is highly unlikely that the word “collaboration” will be deemed sufficient in most influencer marketing contexts.
The phrase “sponsored post” may be sufficient, depending on the overall layout, placement and other relevant circumstances. The key point is that the disclosure must be rather conspicuous and, in any event, more conspicuous than other elements that may otherwise attract the average consumer’s initial attention at a quick glance.
Set forth below are a few recommendations that advertisers and influencers may want to consider when evaluating whether a commercial post is likely to meet the disclosure requirements.
There is no predetermined formula for a clear and conspicuous disclosure. Advertisers and influencers should consider the placement of the disclosure, the prominence of the disclosure, whether the disclosure is unavoidable, the extent to which items in other parts of the advertisement might distract attention from the disclosure, whether the disclosure needs to be repeated several times to be effective and whether the language of the disclosure is understandable to the targeted audience.
A disclosure should quickly catch the consumers’ attention and be placed where they are not likely to miss it. As a general rule, advertisers and influencers should assume that consumers do not read an entire website or online screen. Simply making the disclosure available somewhere in a post, where a consumer might find it, is not enough. The consumer may not be looking for, or expecting to find, an advertisement disclosure, especially if editorial content is mixed or alternately published with commercial content on the website.
If needed, e.g. on lengthy websites, disclosures should be repeated. Repeating a disclosure makes it more probable that a consumer will notice it. For instance, repetition will increase the likelihood that it will be seen by consumers who may have scrolled through text and pictures to stop at content of particular interest to them. It is also important to ensure that one or more disclosures are being used in each and every post that would require a disclosure if it were viewed in isolation. It cannot be assumed that the average consumer will associate a disclosure in a post with the contents of another post, or vice versa.
The size, colour and graphics of the disclosure should be evaluated in relation to other parts of the website. The disclosure should be effective in light of other elements that might distract the consumer’s attention. For instance, the size of a disclosure should be compared to the type size of the other text on the screen, including headings.
A disclosure should clarify the nature of the collaboration between the advertiser and the influencer. Disclosures should be simple, straightforward and easy to comprehend. Preferably, commonly known words such as “advertisement” or “marketing” should be used. A disclosure must be designed so that the average consumer understands that the influencer has received compensation for the post. Ambiguous terms such as “collaboration” should not be used. The same rule applies to ambiguous hashtags, such as “#Ambassador”, “#Partner”, “#Spon”, “#Promo” or “#Brand”. In addition, a disclosure should identify the advertiser, in the context of the disclosure, in order to thereby ensure that sponsored brand mentions are seen with the disclosure.
Advertisers and influencers should not focus on individual elements but rather should consider the advertisement as a whole. Whether a disclosure meets the legal requirement is measured by the disclosure’s actual function, taking all relevant circumstances into account. The key question is how the average consumer will actually perceive and understand the disclosure within the context of the entire advertisement.
Finally, if it is not possible to make an online disclosure sufficiently clear and conspicuous, e.g. for technical reasons, the advertisement should not be used. In Sweden, generally the courts do not regard the internet as a medium characterized by limited space or other restraints, in the sense that non-compliance with the marketing disclosure requirement will be excused or accepted.
While these general guidelines are not prescriptive or exhaustive, they may hopefully serve as a basic tool for anyone involved in influencer marketing in Sweden