The Federal Supreme Court (BGH) ruled in three judgements on 9 September, file numbers I ZR 90/20, I ZR 125/20 and I ZR 126/20, that influencers must label product posts on Instagram as advertising if they receive a service in return. Otherwise, the posts are anti-competitive.
Is paid advertising on Instagram permissible without a web reference?
The influencers posted pictures with short accompanying texts on their Instagram profiles with several million followers. They inserted so-called "tap tags" into some of the pictures. When clicking on products that can be seen in the pictures, such as clothing, and mention the companies or brands of the manufacturers or suppliers of these products. When clicking on a "tap tag", the user is redirected to the Instagram profile of the respective company. Some of the influencers were financially rewarded by companies for posting pictures with tap tags.
When, how and where must a contribution be marked as advertising?
The Federal Supreme Court has now ruled that advertising for which an influencer receives consideration from a company must be labelled as advertising.
The Instagram posts at issue were then business acts of the influencers within the meaning of section 2(1) no. 1 UWG for the benefit of their own company and, in any event, the company of another. Influencers who use a social medium such as Instagram to sell goods, offer services or market their own image are running a business. The publication of posts by these influencers in the social medium is suitable to increase their awareness and advertising value and thus to promote their own business.
Surreptitious advertising is prohibited
The surreptitious advertising violates Section 5a (6) UWG because, according to the findings of the Upper District Court, which are free of legal errors, the commercial purpose of this post, namely to promote the sale of this manufacturer's products, is not made sufficiently clear and is also not apparent from the circumstances. In this respect, it does not matter whether consumers realise that the defendant is acting in favour of its own company by publishing posts on its Instagram profile. It must be recognisable to consumers precisely the purpose of a post to promote another company. The failure to disclose the commercial purpose of such a post, which is provided with "tap tags" and links, is regularly capable of inducing the consumer to make a commercial decision - clicking on the link leading to the manufacturer's Instagram profile - which he would not have made otherwise. Furthermore, the post on the "Raspberry Jam" violates Section 3a UWG in conjunction with Section 6(1) no. 1 TMG as well as Section 58(1) sentence 1 RStV and Section 22(1) sentence 1 MStV because the commercial communication or advertising contained therein is not clearly recognisable as such.
Do you advertise on social media? Make sure you get legal advice!
If you are an influencer on Instagram or other social media platforms, we strongly recommend that you seek legal advice to avoid costly competition law warnings.
As a specialised law firm for IT law, competition law and media law, we already advise agencies, influencers and advertising companies on influencer marketing. We can also help you to design your advertising so that it is not legally objectionable. With our advice, you are on the safe side. Feel free to contact us without obligation.
Sources:
Press release of the Federal Supreme Court of 09.09.2021, No. 170/2021
BGH, judgements of 09.09.2021 - I ZR 90/20, I ZR 125/20 and I ZR 126/20
GoldbergUllrich Lawyers 2021
Attorney at Law Christopher Pillat, LL.M.
