By Francesca Santoro
If you are a member of the “beauty community” on YouTube, then you are probably aware of the overwhelming amount of product releases by cosmetic companies. Beauty YouTubers, popularly referred to as “beauty gurus”, frequently discuss the influx of new products on the market and capitalize off of showcasing these products in PR unboxings and weekly giveaways to subscribers. Celebrity ambassadors, TV ads, and popular magazines have all been traditional advertising tactics used by cosmetic companies for decades to increase their market segmentation and sell more products. The YouTube space has become quite competitive as different companies are competing with each other for sponsorship opportunities with popular beauty bloggers so as to market their products to consumers. The highly competitive nature of the cosmetics industry brought on by its exponential growth in recent years has led certain companies to resort to deceptive advertising practices in order to secure endorsement from popular beauty influencers on social media.
In August of 2018, Marlena Stell, owner of the company Makeup Geek, released a YouTube video discussing how certain cosmetic brands will pay influencers tens of thousands of dollars for posts, sometimes in a direct attempt to bash competitors, without disclosing it to their audiences. The video alleges that certain popular influencers on both YouTube and Instagram would charge upwards of $60,000 to post a video or $20,000 for a post on Instagram to advertise a product. Following the video, many popular beauty gurus released statements on their perspective of the trajectory of the beauty industry and how the industry has become more of a racketeering business with a sole focus on money. Popular beauty guru and brand owner Huda Kattan came forward and revealed that a brand once offered her $185,000 for one post. Another popular makeup artist claimed that an influencer’s management team once asked for $25,000 for a “product mention in a multi-branded product review,” $50,000 to $60,000 for a “dedicated product review,” and $75,000 to $85,000 for a “dedicated negative review of a competitor’s product.”
In addition, influencer brand trips are another example of how cosmetic brands are securing product placement by popular social media influencers. Beauty gurus are frequently flown out on all expenses paid trips to various luxury destinations as press trips to advertise new products. Influencers have been flown first class to locations such as Fiji, the Maldives, Bora Bora, Paris, and Tokyo to stay at hotels that charge thousands of dollars per night all with the intent of promoting a new product launch. This acts as another example of how brands are seeking to sponsor influencers by using their social media influence to attract consumers without authentic consideration on the quality of the products being advertised.
The most recent example of deceptive and inauthentic advertising by cosmetic brands involves the skincare company Sunday Riley who was involved in a consumer protection suit with the Federal Trade Commission (“FTC”) towards the end of 2019. According to the FTC lawsuit, Sunday Riley was said to have been manipulating reviews of their products online by having company employees create Sephora accounts to write positive reviews and dislike negative reviews on their own products over the course of two years. The case was settled with Sunday Riley agreeing to not write fake reviews on their products to boost sales without having admitted to engaging in such deceptive conduct or receiving any legal punishment as a result of their conduct.
As is demonstrated by these examples, in recent years the beauty community has been plagued by deceptive conduct by both brands and influencers in an attempt to sell products to consumers. This has led many consumers to question the authenticity of many brands, new products, and the influencers who continue to capitalize by marketing these products online and what legal consequences are currently in place for those who participate in this deceptive advertising. Countries such as Australia and the United Kingdom have spearheaded the crack down on increasing transparency between consumers and influencers as to when content is sponsored to respond to the consumer protection concerns surrounding social media and influencer marketing. As of January 2019 the UK updated its Competition and Markets Authority to require that influencers make it clear when posts are sponsored under consumer law. Similarly, the Australian Association of National Advertisers enforced new laws specifically for social media users, who can now be fined up to $220,000 a post if they fail to disclose a commercial arrangement or are found to be “misleading by omission”.
The FTC is the government body in the US tasked with promoting consumer protection and has updated its Enforcement Guidelines as of November of 2019 to better aid influencers on how to follow the law when using social media to market products. Specifically, the updated guidelines stipulate, “the various ways that an influencer’s relationship with a brand would make disclosures necessary, how those disclosures should be made, and provides guidance as to the truthfulness requirements expected by influencers.” As the industry of social media marketing continues to grow over time it is important that the law remains proactive so as to protect consumers and stop the pattern of deceptive advertising that has been a pervasive aspect of influencer culture.
Student Bio: Francesca Santoro is a second-year student at Suffolk University Law School and is currently a staff member on The Journal of High Technology. She holds an Honours Bachelor of Arts in Criminology, Ethics, and Mathematics from the University of Toronto.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
