In today’s digital world, social media advertising is becoming increasingly important. Companies that advertise on social networks should ensure that the advertising measures taken comply with the applicable provisions of competition law in order to avoid legal problems.
In principle, advertising, including social media advertising, must not be misleading. This means that advertising must not mislead the consumer about the essential characteristics, prices or conditions of a product or service. This is particularly aimed at Sections 5b and 5c UWG, which came into force in May 2022 and were introduced by the Act to Strengthen Consumer Protection in Competition and Trade Law. The legislator has deliberately taken measures here to prevent unfair social media advertising.
Testimonials and influencer marketing in social media advertising
A popular means of increasing the impact of advertising in social media is the use of testimonials, i.e. recommendations from users or celebrities. Such recommendations increase the credibility of the company and the advertised products or services. However, it is crucial that these testimonials are based on true facts and are not bought. Otherwise, the advertising violates Section 5 UWG and is anti-competitive.
The statement “in collaboration with…” can also be considered a testimonial in social media advertising and – if used without authorization – can constitute competition, trademark or copyright infringements. A recent example from case law: The Neuruppin Regional Court recently ruled that the mere sharing (“reposting”) of press articles without a clear advertising effect is permissible, even if the neutral statements in the article portray the person concerned in a positive light (judgment of July 28, 2022 – 2 O 130/22).
Influencer marketing is also an important part of social media advertising. Care must be taken to ensure that influencers clearly and unambiguously indicate paid advertising. This applies in particular to sponsored products or services. Last year, the Federal Court of Justice clarified that donated products must also be labeled as advertising (BGH, judgment of 13.01.2022 – I ZR 35/21). Misleading or false statements by influencers can also be considered misleading and have legal consequences.
Astroturfing: fake ratings in social media advertising
Another problem in social media advertising is so-called “astroturfing” – the targeted creation of false reviews and opinions. Astroturfing involves artificial reviews created by the company or its agents in order to create an independent impression and thus influence the purchasing decision of potential customers.
On Facebook, for example, companies can buy artificial profiles that then like, comment on and share products. This creates the impression of an authentic customer experience. However, such practices are illegal and violate competition law. Companies that use such methods risk considerable legal consequences and a loss of trust among their customers.
Liability for employees in social media advertising
It should also be noted in particular that companies can be liable for the advertising of their employees on their private social media accounts. If employees take advertising measures on their own initiative and, for example, do not provide all legal information, this could be considered anti-competitive if a business character is recognizable. This type of social media advertising can be attributed to the company in accordance with Section 8 (2) UWG (LG Freiburg, judgment of 04.11.2013 – 12 O 83/13). A clear guideline through internal social media guidelines helps to avoid such problems.
Advertising on social media: Legal aspects of social media advertising for companies
Social media is now an integral part of our everyday lives and offers companies an excellent opportunity to communicate directly with their target groups through social media advertising. However, the legal risks should not be underestimated. The most important tips for legally compliant social media advertising:
- 1Make sure that all legally required information is provided.
- Avoid misleading advertising by only including authentic reviews and cooperation partners.
- Inform your employees about the legal framework for social media advertising and establish clear social media guidelines.
By taking these points into account, companies can use social media advertising successfully and legally compliant and at the same time strengthen the trust of their target groups.
