The Marketing Act

Do you need advice on marketing to your current or potential customers?

Today, marketing is no longer just marketing. Previously, marketing was limited to printed advertisements. Thanks to technological advances, businesses have new ways of marketing themselves. On July 1st 2017, a new Marketing Act came into force, which is stricter than the previous one, especially when it comes to ‘hidden advertising’.

What is considered social media and digital platforms?

While most people know what social media and digital platforms include, the definition is broader than most people expect.

Of course, social media and digital platforms cover Facebook, Instagram, Twitter, LinkedIn, Snapchat, Pinterest, YouTube, etc. But the term does also includes apps and online games, including streaming on Twitch. Slightly oversimplified, all media types with the possibility of social contact can be said to belong to this broad definition.

What is the sanction for hidden advertising?

If you violate the ban on hidden advertising, it can be sanctioned with a fine. The exact size of the fine will vary, as the size is assessed based on the circumstances of the specific case. In the assessment, among other factors, emphasis is placed on the seriousness and extent of the violation and the intended or obtained income. Furthermore, the Danish Consumer Ombudsman (Forbrugerombudsmanden in Danish) can issue a fine, if the company in question pleads guilty to the violation, or file a police report.

The new Marketing Act – who, what and where

Previously, there had to be a more traditional form of “advertising” before the Marketing Act was applicable. It required a contractual relationship between, for example, the company that wanted advertising and the influencer in question. The new Marketing Act radically changes this, since all content with a “commercial intention” must today be marked as such, cf. section 6, paragraph 4 of the Marketing Act. This means that when you, as a company, influencer, micro-influencer, etc., wants to advertise a product, it must be clearly stated in connection to the content in question when there are commercial interests behind said content. There are no exceptions to this! Only potentially aggravating circumstances.

The ban affected many different types of advertising, including:

Marketing in magazines

Whether a magazine is available online or printed in physical copies, today, the content of articles with a “commercial intent” must be marked. In other words, a page where there is a conscious focus on one product or the like will be considered hidden advertising if it is not marked and the publisher or writer has any sort of commercial interest in promoting the product, including getting paid for promoting it, receiving one themselves, etc.

Sponsored posts on, e.g. YouTube and Snapchat

In the case of videos, live streams, etc. from various Youtubers, which praise specific products, they must state that it is advertising if the equipment has, for example, been received as a gift. The same applies if an influencer gets a new set of training clothes from a manufacturer and then makes a story on Snapchat that mentions or shows the clothes, since the post is made, based on a “commercial intention” to create advertising for the clothes against payment of training clothes.

Twitch and other streaming services

Today, Twitch is the go-to place for streaming or e-sports broadcasts. On this platform, ‘hidden advertising’ can occur when casters, for example, spontaneously express their feelings for a particular product during a livestream. Here, however, it is essential to be aware that this is only considered ‘hidden advertising’ if there is a ‘commercial intention’ behind the outbreak. For example, the outburst “OMG, this is a good mouse from company X!” It could be considered ‘hidden advertising’ if the streamer has received the mouse as a gift.

Mention on, e.g. Instagram and Facebook

In the past, it has been allowed for influencers to mention a product in very praising phrases on Instagram or Facebook. It is considered hidden advertising today, unless it is clearly stated that it is an ‘advertisement’. It is worth noting that an influencer that has not previously received a free product, without any actual requirement for advertising from a company. Is only obligated to write, for example, “I have received the product as a gift from company X”, without mentioning the word “advertising”. However, this changes already at the next gift from the company. Then they are automatically considered gifts with a “commercial intention”. As such, further post must be marked as “advertising”.

Product placement in movies and TV shows

Most people know that James Bond prefers an Aston Martin. Many have probably also seen an Audi or two in Fifty Shades of Gray or the Marvel films.

The above are classic examples of marketing in movies and TV shows. It is important to emphasize that this is not illegal. But there are now requirements for consumers to be made aware of when they encounter hidden advertising. In these cases that requirement will be met if it appears from the credits before or after the film that products have been used in agreement with company X – here Aston Martin and Audi/the Volkswagen Group respectively.

Remember to state clearly and distinctly.

Section 6, paragraph 4 of the Marketing Act has the following wording: “A trader must clearly state the commercial intent of any commercial practice, including advertising”. But how is this requirement met?

First of all, it is crucial to be aware that influencers are also considered traders. This means that the company’s partners, including influencers, can also be held responsible for a breach of the Marketing Act.

In addition, we recommend that careful consideration be given to whether children and young people are part of the target group on various social media and digital platforms. This is because the requirements are even stricter when marketing to children and young people. Children and young people under the age of 18 are legally not considered cognitively developed enough to distinguish between personal and commercial intentions.

For example, it will not be enough to write #advertising or #advertisement at the bottom or end of the post for the commercial intent behind a post on Instagram to be clearly stated. Likewise, it is not enough to write “Advertising” in small print to try to hide it. It will not be considered “clearly stated”.

Also, be aware that there are different requirements for disclosure for the various platforms. Although it is not directly stated in the Marketing Act, it is evident from the Act’s preparatory documents. Here it can be read that “in the assessment, limitations in the nature of the medium are taken into account”. Therefore, it is essential to consider which platform the advertisement, gift, collaboration, or sponsorship agreement should be marketed on, including how ‘commercial intent’ can be clearly stated.

Who is responsible?

Both the influencer and the company are responsible for ensuring that ‘commercial intent’ is clearly stated. This is also true for marketing on social media and digital platforms. According to the Consumer Ombudsman, the sender will be considered to have violated the ban or to have participated in the violation. Thus, the sender may also risk being fined.

Do you or your company need help with The Marketing Act?

Do not hesitate to contact Advokatgruppen – we are experts in marketing law! We know that it can be challenging to navigate around the legislation and keep up with the ongoing development in both the legislation and case law. With our broad experience and knowledge, we are able to advise on marketing law at eye level. Contact our specialists for a non-binding discussion of your needs challenges so we can ensure that your marketing lives up to the rules.