Social media influencers must indicate when they have been paid to promote a product, Germany’s top court has said.
The ruling aims to clamp down on online “hidden advertising” by German users on Instagram and other platforms.
The decision came after a case involving Germany’s Association of Social Competition, which is responsible for safeguarding fair trading.
The association had complained about three female influencers on Instagram who had posted promoted content.
The complaint accused the influencers of “inadmissible surreptitious advertising” and said they had failed to clearly indicate when their Instagram posts were promoting sponsored products.
On Thursday, Germany’s Federal Court of Justice agreed with the association in its verdict and ruled that online influencers who receive money from companies to promote products or services must clearly label such posts as advertisements.
One of the three influencers was told by the court that she should have been clear when she had been paid to promote a certain brand of jam.
“Advertising must be clearly identifiable as such and clearly separated from the rest of the content of the offers,” the court said, noting German law. “No subliminal techniques may be used in advertising.”
But judges also said that if the influencers are not paid, they can promote products without an advertising label.
The case against one influencer and television presenter was dismissed, as she had not received any fee in a post about a stuffed toy that had led people to the manufacturer’s website.
Influencers with thousands of followers can earn large fees from companies to promote a product on Instagram.
The business can be lucrative, as Instagram says that more than 90% of users on the platform follow a brand.
Last October, Instagram’s owner Facebook reached a deal with the UK Competition and Markets Authority to prevent hidden advertising by users.