The Difficulties of Regulating the Influencer Sector
How are influencers easily embarking on paid trips to Dubai anyway?
By Sokhema Sreang
The discussion of regulation in the online space has largely fallen on coverage of “Big Tech” and its dominance in relation to misinformation, data handling, and anti-competitive behaviour. Such examples of this type of regulation are exemplified by the European Union’s General Data Protection Regulation (GDPR). The reason behind its implementation was to “impose a duty on firms to track how the data they collect are used, including by third parties with whom they are shared,” touching upon a larger issue of privacy rules in the digital space, the idea that one should regulate material online if it has untrue, harmful, or exploiting user data. While this area is certainly a concern and valid as an area of regulatory exploration, there has been less discussion in the literature about these impacts in the sector of online advertising, even more specifically in the “influencer” marketing space. Therefore, this article will examine the various difficulties of regulating the influencer industry as a modern occupational phenomenon, as it requires a paradigm shift regarding how to regulate an industry operating under the blurred categories of traditional marketers and personalities. Particularly, I seek to investigate the travel and wellness subgenres of the influencer industry and how they require particular regulation because they create ethical issues in their current practices.
To begin, "influencers" are defined as “popular personalities on social media who partner with brands to sell items to their followers.” Only within the last 10 years have influencers emerged as a profession in which people are able to sustain themselves with the income derived from social media. Influencers tend to use large platforms such as Instagram, Youtube, TikTok, or Snapchat to build their brand through user engagement. In 2021, the influencer market was valued at $13.8 billion and is continuing to grow due to the fact that social media influencing is not as directly affected by worldwide market downturns.
The large appeal of influencers is being enticed by a personality that seems relatable rather than unattainable, like celebrities, for instance. Their opinions and endorsements can have a great ability to influence their audience through brand deals, recommendation of products through affiliate links, or commissions on goods purchased. The line is difficult to draw because, while the intrinsic nature of their work is recommending goods and services they claim to personally enjoy, this form of speech allows them to earn commissions through brand connections. This qualifies as an advertisement and poses a disclosure and misleading issue for consumers, especially if they base their purchasing decisions on influencer recommendations.
The Regulatory Review notes that “the informal nature of influencer marketing may bring dangers... [therefore] the potential for misrepresentation, miseducation, or deceptive marketing is a significant concern for regulators… which traditionally have regulated much larger, more sophisticated actors.” Regulation tends to be overseen by multiple bodies of authority, which tends to indicate some level of comprehension of the nuances of regulatory complexity. However, in Canada, influencers are covered by the Competition Act and Advertising Standards Canada (ASC). The Competition Act states that “a social media platform that promotes a product, service, or any business is regulated by [the act].” In this perspective, it positions influencers as employed by social media platforms, where the focus continues to be on regulating the business activity of big tech companies rather than viewing influencers as independent contractors. Unlike the regulations surrounding Big Tech, most regulations do not take into consideration the fact that influencers often do not hire marketing or legal teams and therefore tend to navigate disclosure requirements and marketing regulations independently, leaving a lot of room for harmful mistakes.
Another challenging element for regulating the influencer industry is the diverse nature of what constitutes “work” due to the fact that influencers can build their brand and identify their “niche” at will without any form of registration or documentation. This means that there can be irresponsible business and advertising practices conducted without any recourse because the terms of employment and profession are unclear. For example, travel influencers are a subset of the industry that promote to their audience their idealistic lifestyle through destination-hopping from place to place as a form of escapism. Given any other profession, regulation dictates that one cannot simply work from any country or location without effective documentation, especially regarding taxation of income.
Current regulations force influencers to disclose if they have been paid, have brand affiliations, or have been gifted items. However, framing this kind of regulation under the usual online advertising rules is not specific enough to address how social media is more pervasive and monetizable compared to other professions or labour regulation; there are no set hours, no standard body of work to compare against between influencers of the same job description, no traditional company structure, and so forth.
When it comes to travel influencers, the content itself can come in the form of pictures of the hotel they stay at, beaches, and so on. While travelling, there are no regulations to identify the kind of visa they should be using; despite travelling as tourists, the fact that one is “at work” as they post and create content for social media means they are able to earn an income no matter where they are, a factor that is very different from most other professions. A tangential ethical concern is that approximately 85 percent of the top travel bloggers from 2015 were white, and without regulation, it can be viewed as essentially enabling influencers to boast their privilege and travel to mostly developing, cheaper countries. This has been flagged as a form of neo-colonial exploitation given that, largely, white influencers can monetarily benefit from a context they have no attachment to or investment in. In fact, there have been numerous examples of travel influencers being entitled and disrespectful towards the countries and locals of the places they visit. Not to mention, there are many situations in which travel influencers often "move" to other countries for months at a time hosted by companies and go on sponsored trips for free, but do not declare it as advertising because they pay for the flight themselves. These technicalities mean that “the vast majority of influencers do not know the correct way to disclose a sponsored product to their audience.” As with any other profession, ignorance around regulation does not make them free of consequences, therefore, it requires an increased effort on the part of the regulator to legitimize the consequences and codify disclosure rules for this profession in an accessible manner.
Lastly, wellness influencers require regulation because they pose health-related dangers if unethical activities continue without stopgaps. In the United States, FTC v. Teami was a “wellness” brand that was sued due to inaccurate claims about a tea product while failing to mention that they were sponsored to promote the tea. This case study highlighted that “Teami made deceptive claims by stating that its teas can help with significant weight loss, combat cancer, unclog arteries, and alleviate migraines.” Once again, promoting health-related products under the guise of “wellness”, as well as using personal anecdotes as part of their career, creates a slippery slope where consumers can be easily misled by deceptive advertising that is not backed by medical expertise.
An avenue to expand upon in terms of regulation is through the ASC, which gives more regulation regarding the minutiae of influencer activity, such as “requir[ing] the influencers to be truthful about the products and services.” This mechanism also gives a forum for consumers to report influencers that break these rules, but once again, the rules do not seem to be as comprehensive as they could be. Based on the FTC v. Teami lawsuit, recommendations to regulate for future cases include “giving influencers advice on compliance with FTC regulations using accessible language, examples, and clear summaries.” It is not enough to state that all gifted, sponsored, or affiliated content must be announced without giving set guidelines for what disclosure looks like. This can go as far as to specify how large the text declaring “advertisement” should be, the visibility of the text colour depending on the platform, where it should be placed either in a caption or title, if the disclaimer is to be present the entire time, and so forth. Additionally, regulation should also invest further in the reporting mechanism for consumers to ensure that influencers residing in Canada are effectively following the rules regarding online advertising disclosure.
Given the novelty of the role of the influencer and how the job description is informal in nature, it is inherently difficult to navigate regulating a profession that has not existed until recently. Additionally, the ever-changing nature of the job may continue to evolve as the social media landscape develops and has stricter regulations for consumer protection. To view influencers as regular advertisers or marketers allows for the exploitation and free monetization of the consumer without recourse. The areas of travel and wellness influencers are particularly of concern due to the ethical implications that they expose through their work. Hence, while regulation is needed, it is not as simple as implementing previous frameworks; the complexity comes about from the blurred boundaries of work and life.
Sokhema Sreang is an MPP candidate with the Max Bell School of Public Policy at McGill University and is an Assistant Editor at The Bell, with previous experience as a Staff Writer for the Catalyst Newsletter and Economic Intern at the UNDP. Her interests include issues pertaining to the Global South, and viewing issues of social justice with an EDI (Equity, Diversity and Inclusion) lens.
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