Disclosure, endorsements and reviews
If a reasonable person would not know a post is commercial, it has to say so. The rules apply to one person with a phone exactly as to a brand.
The rules on advertising disclosure apply to a one-person business posting on a phone exactly as they apply to a brand with an agency, and they are the part of this subject most often got wrong by people with no intention of misleading anybody.
The principle, which is the same everywhere
If a reasonable person would not know that a post is commercial, it has to say so. That covers your own promotion, anything you were paid to post, anything you received free, and anything posted by somebody you have a relationship with.
The relationship that triggers disclosure is wider than payment. Free products, discounts, affiliate commission, a competition entry, employment, a family connection: all of these are material connections that an audience would want to know about.
What the main regimes say
- In the United States, the Federal Trade Commission's Endorsement Guides require clear and conspicuous disclosure of material connections between an endorser and a brand, and the Commission has stated that this applies to social media posts and to the brands that pay for them.
- In the European Union, the Unfair Commercial Practices Directive prohibits failing to identify commercial intent as a misleading omission, and its Annex I lists editorial content used for promotion without clear identification as an unfair practice in all circumstances.
- In the United Kingdom, the Competition and Markets Authority and the Advertising Standards Authority both require that advertising be obviously identifiable, with labels applied prominently rather than buried.
- Australia's consumer law prohibits misleading and deceptive conduct, which the regulator has applied to undisclosed paid endorsements and to misleading reviews.
- Many other jurisdictions apply the same principle through general consumer protection or advertising rules. There is no country where concealing commercial intent is safe.
If somebody posts about you
This is where small businesses get caught, because the obligation is not only on the person posting. In several jurisdictions, including under the United States guides, the advertiser is responsible for what endorsers say on its behalf.
- Tell them in writing that the post must be labelled as an advertisement, and how.
- Do not ask for or require a positive review in exchange for anything. Incentivising only favourable opinions is treated as deceptive in multiple regimes.
- Check the posts you paid for. Not checking is not a defence.
- Keep the correspondence. If it is ever questioned, the written instruction is your evidence.
Reviews and testimonials
A tightening area worldwide. Fake reviews, reviews written by insiders without disclosure, suppressing negative reviews and buying follower or engagement numbers have all moved from disapproved to prohibited in several jurisdictions, and in the United States the Federal Trade Commission adopted a specific rule on consumer reviews and testimonials that provides for civil penalties.
For a small business the safe position is simple: do not write your own reviews or ask employees or family to, do not buy any number of any kind, do not remove or hide genuine negative reviews, and do not reward a review for being positive rather than for being written.
Competitions and giveaways
Popular, effective at producing follower numbers of no value, and more regulated than people expect. The rules vary by jurisdiction and the common requirements are consistent.
- Publish the terms: who may enter, the closing date, how the winner is chosen, what the prize is and who is providing it.
- Pick the winner by the method you stated, and be able to show you did.
- Check whether what you are running is a lottery or a prize draw where you are, because in several jurisdictions a draw requiring payment or a purchase is regulated gambling or outright prohibited.
- Do not require a review, a positive comment or a testimonial as an entry condition. Incentivising only favourable opinions is treated as deceptive in multiple regimes.
- Comply with the platform's own promotion rules, which generally require you to release it from any responsibility and prohibit certain mechanics.
Photographs of customers and their work
A frequent and genuine problem for businesses whose best material features other people's homes, children, bodies or possessions.
Ask, in writing, and be specific about where it will appear and for how long. An identifiable person's image is their personal data in a great many jurisdictions, which means consent that is recorded and withdrawable, and a verbal yes on the day is not much of a record. For anything involving a child, premises you do not own, or a recognisable person in the background, the answer is to ask or to crop.
Claims about what you sell
A post about your own product is advertising and carries advertising obligations wherever you are. Claims must be capable of substantiation at the time they are made, prices must be accurate and must include what is mandatory in the market you are speaking to, and comparisons with named competitors are specifically regulated in most jurisdictions. Health, financial and environmental claims are the three categories where regulators are currently most active, and the last one catches small businesses who did not think of themselves as making a claim.
Work to do
- Check that your own promotional posts are identifiable as commercial without relying on the bio.
- Put the disclosure requirement in writing to anybody you pay, in product or money, and check their posts.
- Make sure nobody connected to the business has written a review of it undisclosed.
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