Celebrities investigated over 'hidden adverts' on social media

Their photographs and videos of luxury holidays, designer gear and make-up attract not only the attention and jealousy of millions, but also bumper sales for companies. 

And now dozens of celebrities are being investigated by competition watchdogs over social media posts which it suspects are "hidden adverts" for products.

The Competition and Markets Authority has launched a major investigation into some of Britain's biggest household name celebrities who it says are able to sway the shopping habits of millions of consumers.

It says it has found evidence that posts by so-called "influencers" may be endorsing goods or services without declaring they are being paid to do so, potentially misleading people into thinking paid posts represent their genuine opinion. 

Under the Consumer Rights Act it is banned to use editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable to the consumer.

It means that even if a celebrity is paid to be an ambassador for a brand they may still need to declare they are being paid for social media posts about products.

Failure to comply with the rules could result in a prison sentence of up to two years and an unlimited fine, the CMA said. 

It comes after dozens of celebrities including Victoria Beckham were written to by the Federal Trade Commission, the equivalent of the CMA in the US, over her social media posts about beauty products.  A spokesman for Victoria Beckham has been contacted for comment. 

The CMA's investigation will run alongside the Advertising Standards Authority's ongoing work on celebrity endorsements.

Under its rules, for an influencer’s post to be classified as an advert they must be paid in some form and give some control of the message to the advertiser. 

It says a brand sponsoring an influencer to create a post without any control of the content would not have to be labelled as an advert. 

A number of celebrities including Rita Ora, Ellie Goulding and Cara Delevigne have previously made posts which might be in breach of the rules.

Singer and actress Rita Ora, 26, who has over 13 million followers, posted a picture of herself on holiday in Jamaica captioned "Rockhouse Hotel", naming accommodation in the beach resort of Negril. Another bikini shot was captioned "Thank you @rockhousehotel".

It is not yet known whether any of these celebrities are part of the CMA's latest investigation.

The watchdog revealed it has written to a range of celebrities to "gather more information about their posts and the nature of the business agreements they have in place with brands". It is also asking the public to share their experiences as part of the investigation, and said it was particularly interested in hearing from people who had bought products which were endorsed on social media. 

George Lusty, the CMA's senior director for consumer protection, said: "Social media stars can have a big influence on what their followers do and buy.

"If people see clothes, cosmetics, a car, or holiday being plugged by someone they admire, they might be swayed into buying it.

"So, it's really important they are clearly told whether a celebrity is promoting a product because they have bought it themselves, or because they have been paid or thanked in some way by the brand."