In recent years, the concept of influencers has caused a 360-degree turn in marketing and advertising strategies for products and services in the market. Today, a product is no longer offered and advertised just through traditional channels like billboards, TV and radio, nor just by traditional figures like models, actors or footballers. Instead, products are placed on the market and in the minds of consumers using influencers through their personal Instagram, TikTok or Youtube accounts.
These influencers are ordinary, mostly young people who have made their accounts stand out by gaining followers. There are influencers with millions of faithful followers who are “influenced” by the lifestyle and recommendations shown on social media, making them a goldmine for companies who wish to advertise their products. Despite their virtual presence and unconventional means, it is important to establish the legal considerations and rules that apply to this new means of advertising.
In Ecuador there are currently no specific regulations on influencers. However, the legal framework that regulates advertising activity is established in the Organic Law on Communications, the Organic Consumer Protection Law, the Organic Law for the Regulation and Control of Market Power and, depending on the case, in existing intellectual property rules. The practices which can be categorized as advertising and which are used by influencers are subject to advertising regulations.
Article 91.6 of the Organic Law on Communications establishes the following definition of advertising:
“Any form of communication made in the framework of a commercial, industrial, artisanal or liberal activity in order to promote the supply of goods or the provision of services, including real property, rights and obligations.”
According to this, the practices used by the influencer when promoting the provision of goods or services will be understood to be advertising, provided these have originated in the framework of a commercial activity which in this case would involve a payment or consideration (including gifts).
In relation to responsibility for the content promoted by influencers, it is necessary to consider the following:
Article 27 of the Organic Law for the Regulation and Control of Market Power establishes that the burden of proving the veracity and accuracy of the advertised claims corresponds to whoever has communicated it as an advertiser, so the advertiser is subject to administrative liability which derives from acts of unfair competition through advertising.
Moreover, article 6 of the Organic Consumer Protection Law states that all forms of misleading advertising are prohibited, which also has a potential administrative sanction.
Article 71 of the Organic Law on Communications states that the media have an obligation to prevent the spread of misleading, discriminatory, sexist, racist advertising and advertising that violates human rights.
Given the above, an influencer can be sanctioned for their participation in advertising if this violates the existing legal framework.
From an intellectual property perspective, influencers’ social media posts must comply with the Organic Code for the Knowledge Economy and Innovation (COESC+i) with regards to trademarks and copyright of third parties.
As for the use of trademarks, it is important to analyze each specific case. This is because in some cases using a product with a legitimately acquired trademark is permitted, while in other cases use which implies trademark dilution or confuses the consumer could constitute a trademark infringement.
A common practice among influencers is the comparison of products from different brands. In this case, the proprietor of the brand cannot prohibit the mention of the brand for the purpose of advertising or comparative advertising provided that the claims are demonstrable and made in good faith, pursuant to article 367 of the COESC+i.
Regarding the use of copyrighted music for posts, influencers must pay royalties to the composers of the music; this can be direct or through various platforms. It is important to mention that the use of background music in a video can lead to the video being deleted or blocked by the app if it believes that the copyright owner has not authorized the use.
Considering the above, although advertising by influencers is regulated in part by Organic Laws, it is important to promote the creation of specific regulations that contemplates the way in which influencers should advertise on social media as regards protecting the rights of the users (consumers) who follow their content and the holders of intellectual property rights. This way, the aim should be for the consumer to know when content posted by an influencer constitutes advertising and authorized use of a mark or music through clear mechanisms. For example, something similar to the use of the hashtag #ad or #publi in the United States or Peru, whereby the consumer is certain that it concerns advertising through social media.