9 July 2014

Advertising in social media now regulated in the Netherlands

Specific rules apply to advertising in social media since 1 January 2014. The Advertising Code Social Media requires disclosure of the relevant relationship between advertiser and distributor, bans manipulation and imposes a duty of care on the advertiser. Non-compliance with the rules can result in liability for both the advertiser and the distributor. Advertisers who involve third parties, like bloggers or celebrities, must ensure that those communications are also recognisable as advertising.

What if you provide a blogger with samples of your product to test and review? Or sponsor celebrities with free credits for your service in exchange for a Tweet? Should the blogger and the celebrity disclose these freebies?

The ground rule is that advertising, also through social media, should be recognisable as such. Deception of the public should be prevented. If a blogger, celebrity or consumer has a relevant relationship with an advertiser, this should be explicitly disclosed. According to the Advertising Code on Social Media (ACSM), bloggers, celebrities or consumers are considered distributors if they have a relevant relationship with an advertiser and advertise through the use of social media. Legal persons can also be considered distributors, but managers of a social network or fora that facilitate the communication between participants who take a neutral stance regarding the content are excluded.

A dual test should be applied to determine whether the relationship between the advertiser and distributor qualifies as a relevant relationship. The criteria are that the distributor advertises in return for a payment or a benefit, and this might affect the credibility of the advertisement. Bloggers and celebrities who get freebies in exchange for a review or a Tweet have a relevant relationship, since their opinion may not be credible.  However, if free products are provided to a professional reviewer or journalist, disclosure of the relationship is not required. It is assumed that the public is aware of this relationship and a journalist should also abide by its journalistic standards.

The ACSM does not detail how a distributor must disclose the relationship, but examples are given. A blogger could use a disclaimer (“I received this product from [Company] for a review”) and on a mini-blog such as Twitter, a hashtag (“#spon”) would be sufficient.

But what if a consumer posts its (critical) opinion of a product on the advertiser’s social media site after purchase, and the advertiser only publishes the positive reviews?

Again, deception of the public should be prevented. As long the advertiser clearly indicates that the website concerns a selection of positive reviews, it can display only positive recommendations. The ACSM explicitly mentions that the ban on manipulation also prohibits reviews from fake accounts. An advertiser should refrain from systematically creating or using false identities in bulk to communicate about a product or service in social media. Of course, instructing third parties to write fake reviews is also prohibited.

When an advertiser involves a distributor, it should not only inform the distributor of the rules laid down in the ACSM, but it should also mention other relevant laws and regulations, including the Dutch Advertising Code. If the distributor is allowed to involve a third party, the advertiser should point out that the third party must also adhere to these rules. To secure that the advertiser fulfils this duty of care, including this knowledge of the rules in an agreement is an option. Apart from this duty of care, the advertiser is bound by a best efforts obligation to see that the distributor adheres to the rules. Since the advertiser could be held responsible for the statements of others when they are under its control, it should act promptly upon non-compliance. Both advertiser and distributor can be held responsible for non-compliance with the ACSM.

The advertiser’s duty of care is fulfilled when its best efforts obligation is carried out. The advertiser will then not be held liable for non-compliance. However, an advertiser cannot exclude liability by stating that the distributor did not act on its behalf.