The ACCC is stepping up its fight against deceptive advertising and online reviews. 

In a recent update, the competition regulator unveiled its plan to tackle misleading practices in the online landscape, particularly among social media influencers and businesses.

Two newly released reports shed light on the outcomes of the ACCC's comprehensive analysis of social media influencers and online reviews. 

ACCC Acting Chair Catriona Lowe says clear guidelines are needed for online operators and enforcing compliance with the Australian Consumer Law.

Of the 118 social media influencers scrutinised, a staggering 81 per cent were found to be potentially engaging in misleading advertising. 

This assessment spanned influencers across seven sectors, with fashion influencers ranking the highest at 96 per cent and gaming and technology influencers at 73 per cent. 

According to Ms Lowe, influencers' ability to cultivate trust with their followers makes it imperative that they adhere to proper advertising disclosure.

The ACCC's investigation encompassed platforms like Instagram, TikTok, Snapchat, YouTube, Facebook, and Twitch. 

Most influencers under review had substantial followings, but the study also included smaller influencers. 

The most common issue identified was a lack of clear disclosure regarding brand relationships in their posts.

“Many of the influencers we reviewed did not make adequate disclosures in their posts where it appeared they were receiving payment, gifts, or other incentives to promote brands, products, or services,” Lowe said. 

Another significant problem was the use of ambiguous or cryptic language in advertising disclosures, such as 'sp' and 'spon' instead of 'sponsored'. 

The ACCC stressed that influencers and brands must ensure transparency in advertising to avoid misleading consumers.

In early 2024, the ACCC plans to release guidance for influencers and businesses to remind them of their obligations under the Australian Consumer Law to disclose advertising in social media posts. 

In a separate investigation, the ACCC revealed that 37 per cent of the 137 businesses scrutinised had engaged in questionable conduct related to online reviews. 

The study uncovered the manipulation of reviews by some businesses to present a more favourable image to consumers.

Sectors with the highest proportions of potentially fake or misleading online reviews included household appliances and electronics, beauty products, and home improvement. Health products and food and restaurants had the lowest proportion of such reviews.

The ACCC discovered that some businesses used third-party professional reviewers and review removalists to manage their online reputation. 

These services allowed businesses to manipulate reviews by directing customers with positive experiences to post public reviews while handling negative reviews privately.

Ms Lowe noted that such practices are in breach of the Australian Consumer Law and can mislead consumers. 

The ACCC will continue monitoring businesses offering review manipulation services and will develop educational materials for consumers to identify potentially fake or misleading online reviews.