Social media influencers who receive money from companies to promote products must clearly label posts as advertisements, a German Supreme Court ruled on Thursday.
If influencers are not paid, they can show products without the ad label, the Federal Court of Justice ruled in the cases of three influencers on Facebook’s social media site Instagram.
Influencers with thousands of followers can earn huge commissions from companies to promote a product on Instagram. The court said a fitness influencer should have made it clear that she was advertising when she was being paid to promote a jelly brand.
However, he filed a lawsuit against TV presenter and influencer Cathy Hummels, whose post about toys led people to the manufacturer’s website. She was not paid for the promotion and did not have to label it as an advertisement, the court ruled.
Instagram signed an agreement with the UK’s Competition and Markets Authority (CMA) last year to combat covert advertising by influencers on its photo and video platform.