CCP cracks down on false endorsements by influencers, advertisers

March 08, 2024 (MLN): In light of recent trends and consumer behaviors, the Competition Commission of Pakistan (CCP) has issued a stern warning to influencers and advertisers regarding false and misleading endorsements that are being publicized by them while advertising different products across various platforms.

Similarly, Consumers are encouraged to remain vigilant and report any instances of deceptive advertising to the Commission.

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.

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 a paid performer 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.

By working together with the stakeholders, the CCP can ensure free competition and protect the rights of consumers.

The CCP will take strict action against all those engaged in deceptive marketing practices under Section 10 of the Competition Act, 2010. The Commission is fully committed to performing its duties optimally.

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