The OFT has taken enforcement action against Handpicked Media Ltd – a blogging network – which did not make it clear that companies were paying it for writing promotional content about them.
The OFT considered that this breached the Consumer Protection from Unfair Trading Regulations 2008 and required the blogging network to sign undertakings that it would not repeat the unfair conduct and will clearly identify in future when promotional comments have been paid for.
The action, which the OFT says sets a precedent, is of interest to organisations which use third-party blogs and advertorials, as well as organisations that charge other organisations to appear in their “best of directories”.
The Consumer Protection from Unfair Trading Regulations 2008 (the CPRs) introduced a general duty not to trade unfairly. In particular, the CPRs provide that:
• A commercial practice is unfair if it is a misleading omission.
• It is unfair to use editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable to the consumer.
Handpicked Media Ltd operates a commercial blogging network. They engage bloggers to provide editorial coverage of various topics such as music, fashion and beauty. The resulting content is published on a number of website blogs and social networking sites, such as Twitter.
The OFT was concerned that the content did not make it sufficiently clear to consumers that the promotions had been paid for.
Handpicked Media has signed undertakings that it will not continue the unfair conduct.
This is the first enforcement activity of its kind by the OFT under the CPRs and illustrates how the blurring of the boundaries between editorial content and advertorial can be misleading.
Advertising and marketing practices that do not disclose that they include paid-for promotions are deceptive under the CPRs. Therefore, promotional activity (whether online or offline) must clearly identify when promotions and editorial comment have been paid for so that consumers are not misled.
In addition, it is unfair if a trader falsely represents himself as a consumer, for example, by posting reviews on a website. Therefore, if a trader writes blogs which appear to be written by a consumer, they will be unfair under the CPRs.
Advertisers should also note that the CAP Code requires advertorials to be labelled as such, and for testimonials to be genuine.
Organisations that charge for inclusion in “best of” guides (for example guides to the best hotels where hotels pay to be included) should also note this action by the OFT: it is important that they disclose that organisations included in their guides have paid to be included.