Influencer advertising without labeling?

Authors: Margret Knitter, LL.M. and Dr. Carolin Louisa Schmidt

It’s a familiar image on Instagram: Influencers show themselves perfectly styled in their pictures and let their followers know via so-called tap tags which brands and products they wear and use. By tapping on the photo, the brand is displayed and the user can click on the tag to go to the respective Instagram profile of the brand. Until today, it was debatable whether this was surreptitious advertising and such posts had to be explicitly labelled as advertising.

The German Federal Supreme Court (BGH) has now ruled in a ground-breaking decision that the labelling of posts as advertising is only obligatory if influencers have also received a financial compensation in return.


Background:
The origin of the decision was a legal dispute between the German Association for Social Competition (Verband Sozialer Wettbewerb), which had taken action against the influencers Cathy Hummels (I ZR 126/20), Leonie Hanne (I ZR 125/20) and Luisa-Maxime Huss (I ZR 90/20). They had used tap tags without labelling them as advertising. The lower courts reached different legal opinions in the three cases.

The BGH has now assumed that there is a commercial act because the influencers at least also promote their own company. However, it does not even matter whether it is surreptitious advertising. This is because, according to overriding regulations from the Telemedia Act, the Interstate Broadcasting Treaty and respectively the Interstate Media Treaty, only acts of commercial communication must be recognisable as such. However, this is precisely what is missing if an influencer has not received any consideration at all.

The Huss case was to be judged differently. Ms. Huss had received a financial compensation for a post to a “Rasperry Jam” and had not sufficiently labeled this.

In addition, the BGH fundamentally stated that a commercial act in favour of other companies without any compensation can only be assumed if a post is “excessively promotional”. This is the case if it no longer shows any critical distance, but exclusively praises the advantages of a product and thus no longer represents factually induced information. This can regularly be assumed in the case of a direct link to the website of a manufacturer, but not in the case of the use of tap tags that merely link to the Instagram profile.

Practical tip:
Provided that one has not received any compensation for tap tags, the post does not need to be labelled as advertising, which is now confirmed by the highest German court. However, the landmark decision could soon be settled anyway due to a change in the law. Thus, in the government draft of a law to strengthen consumer protection in competition and trade law, which among other things aims to amend the Act against Unfair Competition, it is clearly regulated that the mere increase of the own level of awareness of influencers cannot be considered as a compensation of another company!

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