Swedish case law: Influencers have to properly identify marketing content, but only if it is marketing

By Kajsa Zenk, Karin Soderberg

04-2020

A comment on the Swedish Patent and Market Court's decision in case PMT 798-19.

Background

A Swedish influencer and a sunglass company agreed that the influencer was to publish one post on Instagram, and one post on her blog to market the sunglass company. The influencer got financial compensation from the company and the company also paid for a photographer and a trip to Zanzibar, where the photos for the posts were taken.

During a supervisory action, the Swedish Consumer Agency noticed a total of 30 social media posts published by the influencer (on Instagram, Facebook, the influencer's blog and YouTube) in which the influencer was posing with sunglasses from the company or which pictured only the sunglasses. The Consumer Ombudsman filed a summons application against the influencer's company due to these posts, claiming that the posts constituted unfair marketing and therefore should be prohibited.

The court ruling

Initially, the court stated that when deciding which posts by an influencer that should be regarded as marketing, the mere fact that the influencer has received a trip as payment does not mean that all posts published in connection with that trip shall be considered as marketing. The court held that such an interpretation would limit the influencer's opportunities to publish pictures from trips, restaurant visits or similar activities. Also, the fact that an influencer shows or mentions a certain product from a company, which the influencer has an ongoing collaboration with, does not automatically make the posts commercial content and therefore marketing. Further, the court stated that the fact that a post is marked with "in collaboration with…" or similar text is not essential for the assessment whether the posts constitutes marketing or not, since such interpretation would mean that an influencer alone can decide which posts should be marketing and not.

The court expressed that whether or not content is considered marketing should be based on an objective assessment of what has been agreed between the influencer and the company.

The influencer held that only two of the 30 posts should be considered marketing, since the purpose of the other posts was not to promote the sunglass company but rather to publish content on the influencer's social media channels. Even though all posts from the influencer portrayed the sunglasses and sometimes were marked with either the company's name or a collaboration-hashtag, the court found, based on the agreement between the parties, that only two of the posts constituted marketing. The court went on to assess whether these two posts constituted unfair marketing or not.

According to the court the average consumer, who should be used as basis to determine whether the marketing is unfair, was considered to have at least fundamental knowledge of English and be aware that many influencers' activities on social media, at least to some parts, are commercial.

However, the court stated that there should be high requirements on the design of marketing content on social media in order for the average consumer to be able to understand that the content constitutes marketing. Especially since it is not unusual that editorial content is combined with marketing content and since the content is carried out in a digital environment where the consumer quickly makes purchase decisions. The consumer should already from a brief look be able to determine whether or not the content is marketing.

Based on this, the court found that the design of the blog post did not fulfill the requirements of adequate identification of marketing content. The design did not significantly differ from the design of the editorial content on the blog. The title of the blog post, "One pair is not enough" was according to the court not sufficient in the respect that an average consumer could, by a brief look, be able to categorize the content as marketing. The text did include a line stating that the post was "in collaboration with" the sunglass company. However, the court noted that the same text ("in collaboration with") had been used by the influencer in posts which the court considered as editorial content, and the text did not differentiate between paid and un-paid collaborations since it simply informs that there is a collaboration. According to the court it is essential for the average consumer to be able to understand if the influencer is being compensated for the post or not in order to make informed purchase decisions. The text informing about the collaboration was also significantly smaller that the title and was not designed so that the reader would pay attention to it. The pictures were, according to the court, the most prominent part of the blog post, overshadowing the text. Further, the pictures were placed and designed in such manner that it was unclear to the consumers that the pictures were marketing content. Pictures of the sunglasses were presented alone, in between pictures of the influencer wearing the glasses, and it was deemed difficult for consumers to apprehend that the blog post included marketing.

When assessing the Instagram post the court made a similar judgement, and also considered the Instagram post as not fulfilling the requirements of adequate identification of marketing content. The text in the post gave the average consumer at least some indication that the post was marketing content, but it was not considered clear enough for an average consumer to understand from a brief look that the content was marketing. The reference "collaboration" was also stated in the Instagram post, and was in the same way as in the blog post considered inadequate by the court since there was no possibility for the consumer to assess whether compensation has been rewarded for the post.

The court stated that the influencer significantly contributed to the marketing but as the marketing concerned the sunglass company's products and was conducted in the said company's interest, the influencer was only held responsible for aiding unfair marketing and not as the primary responsible party. The influencer was prohibited under penalty of a fine to contribute to the promotion of sunglasses in the same manner as this case concerned, or in any similar manner.

Remarks

The case is the latest in a line of cases regarding influencer marketing. Previous cases have come to similar conclusions - that influencers have to visibly and clearly mark posts as marketing content if compensation for the posts is given to the influencer. The message from the Swedish courts is clear - it is simply not enough to just say that the post is made "in collaboration" with a company, it needs to be clear whether or not the collaboration is paid.

Besides this, the judgement in this case has principally interesting aspects. The ruling implies that the inclusion of "collaboration"/"in collaboration with…" in posts not considered as marketing means that the influencer must even more clearly mark the posts that actually are considered marketing. Another interesting aspect is the fact that the court emphasized that what has actually been agreed between the influencer and a company is the essential basis in the assessment of what constitutes marketing.

The efficiency of the prohibition under penalty of a fine can be questioned in the case of marketing by influencers, since the prohibition is usually strictly limited to a certain product in order fulfil the requirement of being legally foreseeable. In this case, the prohibition under penalty of fine concerns such marketing of sunglasses as were relevant in the case. Since the prohibition only concerns sunglasses, the influencer could market other products in the same way without penalty. As the business of an influencer is to market different products these forms of penalties are not as efficient as for companies that only market and sell one product. However, these penalties could of course be effective when the influencer has a longer collaboration with a certain company, but it proves ineffective in regards to shorter or one-off collaborations.

In general, the judgement presents a welcomed clarification of how influencer marketing content can be designed to fulfill the legal requirements of marketing identification. However, the influencer industry is fast-moving and new concepts will almost certainly appear. It is therefore of uttermost importance for influencers, companies and legal practitioners to stay up to date with the changeable influencer marketing regime.