DCMS 'Influencer Culture' report calls for urgent reforms of advertising regulations in relation to social media

On 9 May 2022, the Digital, Culture, Media and Sport (DCMS) Committee published its report  'Influencer Culture: Lights, Camera, Inaction?'.  A copy of the report can be found here (or if you don't have time to read the full 69 pages, there's a handy summary here). 

In the report, the DCMS Committee acknowledge that influencer culture is a rapidly expanding subsection of the UK's creative industry. Whilst the popularity of this new medium being used to create new content and bring together online communities has some obvious benefits, the report also specifically identifies three challenges of this new industry and the regulatory gaps which it suggests need to be addressed: 

1. The lack of employment support and protection currently afforded to those whose career is 'influencing'. Major concerns in this space include harassment, diversity issues, pay disparity, dependency on algorithms and difficulty in taking 'time off'.
   
   
2. The fact that rapid expansion of influencer marketing has outpaced the capabilities of UK advertising regulation. As a result, the enforcement power of the Competition and Markets Authority and the Advertising Standards Authority (ASA) are out of date and urgently need updating.
   
   
3. The potential exploitation of children in this sector - both as consumers of influencer content and as influencers themselves. Current UK advertising regulations do not appropriately consider developing digital literacy, and child labour protection does not cover user generated content. Updated legislation which specifically addresses the online environment is required to ensure that it remains a safe space for children. There is also concern that some young influencer accounts are being run by parents who are potentially exploiting their children to make money. 

The report contains a range of recommendations in relation to the above issues which the Government will now consider and have two months to respond to.  

Attempting to ensure that social media influencers are clearly disclosing advertising to consumers has long been on the ASA's radar. However, the scale of the sector and limited enforcement powers of the ASA currently make this an almost impossible task. You only have to look at the weekly ASA rulings to identify that influencer compliance with advertising regulations is low. There is a list on the ASA website which names and shames 'non-compliant social media influencers', which is regularly updated, but it is not clear just how much of a deterrent this is. In addition, there is currently only 5 names on there. 

Amongst other things, the report recommends that the ASA is given statutory powers to enforce the CAP Code. It also suggests removing the requirement in the CAP Code for 'editorial control' to determine whether a post is an advert and extending the ASA remit to cover current loopholes which escape regulation - such as communications concerning brand 'gifts' to influencers where there is no prior agreement in place.

The Committee also supports the CMA request for greater powers to enforce consumer protection law, including the ability to make decisions directly without having to go to court and stronger powers to enforce compliance, including turn-over based fines. 

The report goes on to make further broad recommendations for amendments to child labour and performance regulations (including working hours and conditions and protection for earnings). However, specifically in relation to children and advertising, the report recommends that the ASA update the CAP Code to include mandatory enhanced disclosure standards for adverts which are targeted at children which should ensure that they are able to identify the content as an advert and critically evaluate it. It acknowledges that this will require further and comprehensive research. 

The report makes for interesting reading and certainly identifies some of the difficulties as to why regulation of this sector is so hard, in particular in relation to young children on these platforms. It remains to be seen whether the Government will now go on to adopt any of these recommendations. We will know more by mid-July.