Recently the Canadian Competition Bureau announced it would be paying closer attention to enforcement of the Competition Act’s deceptive advertising provisions as their relate to online influencers. If you’re a streamer, Youtuber or other gaming influencer, these laws apply to you, so I put together this quick FAQ to explain the situation:
Wait, so there’s laws about this stuff?
Are they new laws?
Nope. The Canadian Competition Act has general provisions against deceptive marketing practices. The laws have been around for decades, but they apply in the context of influencer marketing the same way they do to everything else.
Ok, so what’s changed?
On December 19, 2019 Canada’s Competition Bureau (who enforces the Competition Act) sent around 100 Canadian marketing agencies a letter warning them that they would be monitoring compliance with these laws more closely in the context of influencer marketing.
At the same time, the Competition Bureau also released new guidelines for influencer marketing. These guidelines don’t have the force of law, but they’re a statement about how the Competition Bureau interprets the law, and since it’s the Bureau that will be going after anyone potentially breaching these laws, it’s good to be aware of how they look at things.
Do the laws and guidelines apply to influencers or just ad agencies?
They apply to influencers too. While the Competition Bureau’s letters were sent to advertising agencies, the laws apply to anyone who is involved in promoting a product, including influencers themselves.
Do they apply to me even if I’m a small influencer?
Yup. There is no minimum threshold in terms of views, followers, etc. that someone needs to meet in to be covered by these laws, so even if you’re a small influencer they apply to you. A good rule of thumb is that if someone’s paying you to promote something, you’re big enough to be covered by these laws.
So what do I have to do?
The main purpose of the new guidelines is to make sure that people watching your content are aware that there’s a commercial incentive for you to promote a product, so they can make an informed decision about buying it. In terms what you have to do to comply, it basically boils down to the following:
1. If you’ve got a material connection with a sponsor you need to disclose that. A material connection generally means being paid to promote a product (either in cash, or through free product, discounts, or anything else). However, it can also mean other relationships that would affect your objectivity, such as you or a family member owning part of the company whose products are being promoted.
2. The disclosure should be clear. Some general principles to keep in mind on this are:
• It should be prominent. You shouldn’t put the disclosure anywhere that it would be difficult to find, such as burying it somewhere in your bio where people are likely to miss it. Generally speaking, if viewers can access your content without seeing the disclosure, then the disclosure might not be adequate.
• It can’t be ambiguous. While there’s no “magic words” you need to use, it needs to be clear that you have a material connection with your sponsor. It’s not enough to simply link to your sponsor’s site. Generally speaking, examples of what may be compliant are using the “#ad” or “#sponsored” hashtag or giving your sponsor a quick thank you for sponsoring your video when it begins.
• It should to be made in each of your videos/posts, across all platforms. Making the disclosure only in your first video/post for a sponsor, or only on one social media platform, is not enough. You need to disclose each time you post new content for that sponsor, and on every platform you post on.
3. Any testimonials/reviews must be based on experience. While this one’s less likely to apply to gaming influencers, if you do reviews or make any claims about a product, they should be based on your own first-hand experience with the product. You should avoid making general claims about a product that may be suggested by the advertiser if you can’t verify them through your own experience.
So what happens if I breach these laws?
In theory, fines of up to $750,000 (or $10 million for corporations) and even jail time. In practice, any penalties an influencer gets hit with would likely be well, well below that.
One thing to consider in practice though, is that if the Competition Bureau starts taking an issue with what you’re doing, even if no penalty is ultimately imposed on you, the effort/paperwork (and potential legal expenses) of responding to them are probably not something you want to deal with.
Have any influencers been hit with a fine so far?
Not to my knowledge. At this point the Competition Bureau has just sent letters out as a warning without actually fining or prosecuting anyone. A similar push is under way in the US, where the Federal Trade Commission (who enforces a deceptive marketing regime similar to the Competition Act) has sent multiple warning letters to influencers about their practices, however so far no major fines have been imposed in the US either to my knowledge (though in 2017 the FTC did settle a complaint against two influencers who operated a CS:GO skins betting site for promoting the site without also disclosing that they owned a part of it).
Given the explosive growth of influencer marketing within and outside video games in the last few years, now that the “fair warning” letters have gone out, it’s definitely possible that repeat or serious violations of the guidelines may lead to more direct enforcement action by the Competition Bureau, as it looks to show that it’s being proactive about enforcing this stuff. Thus, these guidelines are worth keeping in mind.
DISCLAIMER: Nothing in this article creates a solicitor-client relationship between us or should be interpreted as legal advice. Any legal information provided in this article is a statement of general principles only, and the application of the law to a particular situation is something that needs to be considered in light of each individual’s specific circumstances.