From the «and so have I» department:
Feed: Tech – TIME
Title: France Is Cracking Down on the Influencer Industry
Author: Simmone Shah
Date: Mon, 08 May 2023 07:00:14 -0400
Link: https://time.com/6277524/france-influencer-marketing-regulation-social/




In recent years, a wave of high-profile scandals have hit France’s influencer sector.

Reality television star Nabilla Benattia-Vergara was handed a €20,000 fine for
promoting Bitcoin to millions of Snapchat followers without disclosing that she was being paid to do so. Elie Yaffa, who raps under the name Booba, accused the influencer agent Magali Berdah of using her agency as a vessel to promote questionable products. And over 100 alleged victims came forward with a class-action lawsuit earlier this year, accusing French social media influencers
of deliberately leading them to lose money on trading and NFT platforms.

The scope of social media scams reached beyond the headlines, with influencers pedaling everything from Botox fillers to gambling. Stéphane Vojetta, an MP in France’s Assemblée Nationale, saw the repercussions first-hand. “We had meetings
with victims of scams from everything from medical malpractice to drop-shipping to cryptocurrency-based Ponzi schemes,” says Vojetta.
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Of course, the problem is not unique to France. The global influencer industry is set to become a $69.92 billion dollar industry by 2029, according to Data Bridge Market Research.[1] But despite its rapid growth, there is little uniform
regulation around the industry.

This year, the U.S. Securities and Exchange Commission charged celebrities like actress Lindsay Lohan and social media influencer Jake Paul for illegally promoting cryptocurrencies. In the U.K., Parliament launched an investigation into influencer culture that assessed, in part, the absence of regulation around
product promotions. “Influencer marketing has been gaining the attention of regulators worldwide,” says Catalina Goanta, an associate professor at Utrecht
University whose research focuses on how we govern digital society.

But France is set to become the first country in the world to legally define what an influencer is, as new legislation proposed by Vojetta and MP Arthur Delaporte aims to crack down on the types of products and services creators can advertise to their followers. The bill, which the government says is the first to provide a regulatory framework around influencing in Europe, was adopted by the lower chamber of France’s Assemblée Nationale in late March, and is likely
to pass a looming Senate vote in May.

In its current form, the resulting legislation will ban influencers from promoting cosmetic surgery, financial products and services such as cryptocurrencies, and counterfeit products. It will also force creators to disclose when they place filters on photos and videos that are ads. For promotions that involve gambling or betting, posters will be required to include
an informational banner about the risks.

The “Wild West” of France’s Influencer Industry

In France alone, the influencer marketing industry—a largely new economic sector
that pays everyday individuals to promote products to their followers—is worth
an estimated[2] hundreds of millions of euros. But the industry has never been formally recognized by the law, and is instead governed by laws designed for traditional marketing.

France’s Finance Minister, Bruno Le Maire, launched a public consultation in January to set up a framework for regulation. “This is the first time in Europe
that a comprehensive influencer regulation framework will be put in place.” Le
Maire said[3] about the bill. The Internet “is not the Wild West” he told local
media[4].

“There were a lot of victims of scams from medical practice to financial advice.
People lost hundreds or thousands of Euros or sometimes have substantial physical damage following wrongful medical procedures,” says Vojetta. “It was an
opportunity to regulate the whole sector.”

French influencers are already required to specify in their post’s description
if they are paid to promote a brand or product, but the practice is not always followed. In a study earlier this year, the country’s economy ministry’s consumer protection bureau, the DGCCRF found that six of 10 influencers[5] did not follow regulations. Under the new law, content creators would be required to
include a disclaimer indicating that a post is sponsored as a banner across photos and videos, rather than just in the description or as a hashtag.
[image 6] Edward Berthelot—Getty Images)Nabilla Benattia outside an influencer
dinner on April 24, 2019 in Paris, France.

Carine Fernandez, president of the Union des Métiers de l’Influence, one of the
organizations which provided input during the bill’s creation, says that the practices focused on in the media are not representative of the industry as a whole. “In France we mostly speak of a few reality TV influencers who have promoted scams or other bad practices on social media,” she explained to TIME.
“These are the stories we hear on the subject, but they are only a handful of influencers. The influencer community is so much more than that.”

Fernandez says there is a lack of understanding of the laws governing the sector. The new legislation will create a foundation for how influencers’ content will be regulated when it comes to advertising.

“The benefit of this new law is that it will officialize the rules which already
exist [in marketing] in the influencer sector,” she says. “‘Influencer’ is a new
term that didn’t exist in the law before.”

Implementation—and Imprisonment

The bill establishes a new legal status for “commercial influencers,” defined as
individuals who use their reputation to share content that promotes a product or
a service in exchange for money or a benefit-in-kind. But there’s no easy boxes
to check off when defining exactly who is an influencer, especially in such a rapidly changing landscape.

“Trying to encapsulate that in a legal definition that is future-proof is difficult.” says Goanta.

The Ministry of Economy has announced the creation of a task force dedicated to identifying infractions around commercial influencing. However, Goanta warns that this could be challenging to effectively monitor and implement in practice for a number of reasons—one being that follower count is no longer the only indicator of reach.

“You can have very successful micro-influencers that have 20,000 followers, but
have more engagement because people talk to them,” she says. “Do we want to monitor every single person who has 30,000 followers and didn’t disclose the fact that they received leggings in the mail?” says Goanta.

The bill considers influencers’ activities as advertising governable under French Consumer Law, closing a loophole that has long allowed influencers to turn a blind eye to regulations by recognizing the sector and explicitly defining the laws governing it.

“We are not going to regulate influencers’ free speech on social media channels,” said Vojetta. “What we are going to regulate is the influence on social media used as an advertising channel.”
Those who do not comply could face six months’ imprisonment and a fine of up to
300,000 euros. But “beyond this judicial path, which is notoriously slow in France, the real deterrent will consist in actions that the platforms will have to undertake,” explains Vojetta. This can include taking down posts and stories
that violate the law, or removing users from their platforms altogether.

A Need for Regulation Worldwide

The E.U.’s Digital Service Act, which went into effect last November, will be a
key part in ensuring platforms comply in France. The DSA is wide in scope, and forces digital platforms to put measures in place to protect consumers from issues such as hate speech, online harassment, and faulty products from online marketplaces. Though the law does not explicitly cover influencer marketing, Vojetta says the French government is aiming to ensure that the measures are “copied into French law” and apply the same rules to breach of commercial influence regulation.

The E.U. has rules against misleading commercial practices in place, such as a 2005 E.U. Directive on unfair commercial practices, but regulation is still a “creative procedural dance,” Goanta notes. “There’s an interpretation issue. We
have rules, but it’s just about trying to interpret them in this very complex world of social media.”

That’s why countries are beginning to put forward industry-specific regulations.
A law passed in Norway in 2021 made it mandatory for influencers to disclose if they were posting retouched photos as part of paid promotions. The U.K.’s inquiry[7] into influencer culture last year called for, among other things, the
creation of a code of conduct for influencer marketing and a study into the influencer ecosystem to better regulate future growth and manage rules around pay standards and practice.

Goanta says that piecemeal legislation will never be as powerful as global cooperation, especially in a world where virality is increasingly borderless.

“An influencer might speak a specific language, but [their content] is never just about one country,” she says. “Their content is always international.”

Links:
[1]: https://www.databridgemarketresearch.com/reports/global-influencer-marketing-platform-market (link)
[2]: https://www.lefigaro.fr/actualite-france/les-partenariats-avec-les-marques-la-principale-source-de-revenus-des-influenceurs-20230102 (link)
[3]: https://www.francetvinfo.fr/internet/reseaux-sociaux/influenceurs-quelle-regulation-par-l-executif_5733635.html (link)
[4]: https://www.washingtonpost.com/world/2023/04/05/france-influencer-bill-filters/ (link)
[5]: https://www.economie.gouv.fr/dgccrf/marketing-dinfluence-60-des-influenceurs-cibles-par-la-dgccrf-en-anomalie-0 (link)
[6]: https://api.time.com/wp-content/uploads/2023/05/GettyImages-1167442509.jpg?w=560w=560 (image)
[7]: https://committees.parliament.uk/work/1126/influencer-culture/ (link)



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