Influencer marketing has become an integral part of modern advertising strategies with social media platforms serving as key avenues for brands to reach their target audience. An influencer-driven marketing campaign is a promotional strategy that leverages the popularity, credibility, and reach of social media influencers to endorse or promote a brand, product, or service.

Online endorsements by celebrities play an important role in helping consumers make their shopping decisions. The endorsements are particularly helpful when consumers buy goods or services whose quality may be hard to assess before their utilization. The information that endorsements provide may help consumers to make faster and more confident decisions. It has the potential to boost competition amongst businesses on their products’ reliability or the quality of services they offer. It can also make it easier for small businesses and new entrants to enter a market or to expand.

However, with the proliferation of influencer-driven marketing campaigns, there has been a rise in deceptive marketing practices that pose serious risks to unwary consumers. Some influencers and endorsers may make false or misleading claims about the products or services they are promoting, without disclosing their material connection with the brand or company. This may lead to consumer confusion, dissatisfaction, and loss of trust.

In light of recent trends and consumer behaviours, the Competition Commission of Pakistan (CCP) has issued a stern warning to the influencers, content creators, and advertisers regarding false and misleading endorsements that are being publicized by them while advertising different products or services across various platforms. The CCP has also urged consumers to remain vigilant and report any instances of deceptive advertising to the Commission.

The CCP has noticed that certain influencers and endorsers are making false and misleading endorsements to attract consumers. It is, prima facie, a violation of Section 10 of the Competition Act, 2010 being a deceptive marketing practice. The Commission has already issued comprehensive “Guidelines on Section 10: Deceptive Marketing Practices”, wherein it has been clarified that false or misleading ‘Endorsements/Testimonials’ are prohibited.

An endorsement is false or misleading if the endorser offering the testimonial has not disclosed his material connection with the product or service being endorsed. He is required to disclose whether he is a real user of the product or service or a paid performer or an employee of the company/brand or a recipient of a free product or service for offering the user testimonial or endorsement as an influencer; a celebrity or an opinion leader.

The CCP has advised the influencers and endorsers to follow the following principles while making endorsements:

• Honesty: The endorsement should reflect the honest opinions, findings, beliefs, or experience of the endorser.
• Accuracy: The endorsement should not contain any representation or statement that would be deceptive or misleading to a reasonable consumer.
• Disclosure: The endorsement should clearly and conspicuously disclose the nature and extent of the endorser’s material connection with the product or service being endorsed.
• Substantiation: The endorsement should be supported by adequate evidence or data to verify the claims or representations made.

The CCP has also warned the advertisers and brands to ensure that the influencers and endorsers they engage with comply with the above-mentioned principles and the Competition Act, 2010. The CCP has the power to initiate inquiries, investigations, and enforcement actions against any person or entity involved in deceptive marketing practices. The CCP can impose penalties, issue cease and desist orders, and grant injunctions to prevent or remedy such practices.

The CCP has also encouraged consumers to be aware and informed of the influencer marketing campaigns and the endorsements they encounter on various platforms. Consumers should look for clear and conspicuous disclosures of material connections, and verify the accuracy and reliability of the endorsements. Consumers should also report any instances of deceptive marketing practices to the CCP through its website, email, phone, or social media channels.

The CCP is committed to ensuring fair competition and consumer protection in the market. By issuing the warning and the guidelines, the CCP aims to promote transparency, accountability, and ethical standards in influencer marketing. The CCP hopes that the influencers, endorsers, advertisers, brands, and consumers will cooperate and comply with the Competition Act, 2010 and the CCP’s regulations to foster a healthy and competitive market environment.

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