United Kingdom: Adopted CMA Hidden Advertising Compliance Principles for Social Media Platforms

On 3 November 2022, the UK Competition and Markets Authority (CMA) adopted guidance containing six key compliance principles for social platforms in relation to hidden advertising. The guidance explains that platforms have responsibilities for tackling illegal practices, such as the use of hidden advertising, by their users, including the duty to act with professional diligence under Regulation 3 of the Consumer Protection From Unfair Trading Regulations 2008. The guidance is intended to set out the actions platforms should take to ensure their compliance with such duties, formulated in six principles. The first principle is the obligation for platforms to ensure that all users are informed of the illegality of hidden advertising. The second principle requires companies to provide content creators (which includes influencers) with tools to facilitate the labelling of an advertisement. The third principle asks platforms to implement prevention of the appearance of hidden advertisements through available technologies. The fourth principle calls for the simplification of the process of reporting hidden advertisements by users. The fifth principle aims to ensure and facilitate legal compliance of brands with regulations on hidden advertising. Finally, the sixth principle requires platforms to adopt proportional and effective sanctions in the event of violations of the platform's terms and conditions.