Increasing action against ‘influencer fraud’
The changes to the French legislation are not surprising: France has seen a mass of criticism and litigation aimed at ‘influencer culture’ in recent years and has introduced numerous parliamentary initiatives to tackle harmful practices. The proliferation of influencers on social networks has led to an increase in abusive practices in the promotion of goods and services. France alone has seen some influencers promoting unauthorised drugs alleged to cure cancer, promoting bogus sports betting and selling products at prices much higher than their retail value.
This year, a class action was brought by over 100 alleged victims against French influencer couple Marc and Nadé Blata who promoted NFT and copy trading platforms. Dubbed ‘Collectif AVI’, the claimants in the class actions asserted that statements made by the influencers online were deliberately designed to cause each individual to lose money. The couple’s Instagram accounts have since been shut down, alongside other French influencers who have faced similar controversies.
The French Proposition:
In its current form, the proposed bill contains five articles:
L’article 1 –
The first article builds upon the Consumer Code and regulates the sale or promotion of goods or services by influencers online. In its current form, the bill provides a wide legal definition of an influencer as an individual who “directly or indirectly promotes goods, services or any cause” for money. Activities by those meeting this definition will be considered advertising and thus fall under French consumer law and subjected to the same legal constraints as other mainstream media.
Under this article those meeting the definition of an influencer will be prohibited from the promotion of pharmaceutical products and surgical procedures, including cosmetic surgery, counterfeit products and financial investments where there is a risk of financial loss such as bitcoin and NFTs. This will be in addition to products already banned under the French Consumer Code including tobacco products and alcohol. Influencers will further be prohibited from the promotion of sports betting, professional training courses and gambling unless such advertisements are supplemented by a visible disclaimer (within the image or video itself) informing the consumer that these goods and services are reserved for adults only and identifying the risks involved.
Influencers will have to notify their audiences if they have been paid to promote a product and will be required to ensure that the initial seller complies with all general conditions of sale. The new proposals will also require influencers to state whether filters or any form of AI has been used in the generation of images or videos. Violations of this article may result in a term of imprisonment or a fine of up to €300,000.
L’article 2 –
The second article mandates that a contract must be in place between an influencer and their agent or brand that they are promoting. Said contract must state that there is no conflict of interest between the parties and set out the commission to be received by the agent. This article has extra-terrestrial reach, requiring influencers who are not established in France to appoint a legal representative in France should they wish to operate within the country.
L’article 3 –
The third article focuses on the role of online platforms and amends the French laws on confidence in the digital economy. Under this article, online platform operators are to establish mechanisms to allow its users to electronically report illegal activity, which should then be investigated, and places a duty on the operator to notify the individual of the outcome of the decision taken. Once implemented, online platform operators will be under a duty to publish annual reports on their content moderation setting out the number of complaints received, the time taken to resolve each dispute, and the measures taken to mitigate the risk of fraudulent influencers.
L’article 4 –
The fourth article places obligations on platform operators to cooperate with the French authorities in the continued protection of the online space. The authorities will be able to make requests for the removal of content, which platform operators should act upon. The authorities will provide lists of websites that are illegally promoting goods or services.
L’article 5 –
Finally, the fifth article is consumer centric and amends the French Education Code. The French proposals recognise that the consumer demographic is predominantly constituted of young adults, and minors and that some influencers create a falsely intimate relationship with their following in order to incite feelings of transparency, honesty and closeness. Under this article, education around online fraud and digital risks will form a compulsory part of the curriculum for minors.
What this means for influencers and consumers
The French government have indicated that the proposals may come into effect as early as this summer. It is important to note that the proposals may impact influencers based outside of France, if they operate within the French market and that “influencer” is defined broadly to include individuals with even a small online presence. They will also have impact across the board: for influencers themselves, businesses promoting their goods and services via influencers, hosting platforms and the everyday consumer. Some have criticised the French proposals for being too far reaching and believe that they will stifle the careers of many creative influencers, however, there has been immense support from the French Senate and lobby groups on both sides to protect consumers from potentially harmful online practices.
Moreover, the influencers endemic is not unique to France, and as such, changes to the French legislation may only be the first step in a world-wide overhaul of the influencer industry. Whilst France is on track to be the first jurisdiction to define what an influencer really is, and to crack down on online influencer culture, the US, UK and other jurisdictions have shown concern for the growing presence of influencers and the social harms associated with this culture. It is likely everyone will be closely following the final stages of the French proposals to see what impact the changes have on a rapidly changing influencer culture.
