Europe is severely attacking influencers

Children once dreamed of becoming singers, astronauts and actors. Today they may want to become influencers. A 2019 study found that 30% of children aged 8-12 in the US and UK want to become YouTubers, which is three times the number of children who want to make a living in space. The profession of “influence” is growing in popularity: it is expected to be a $70 billion industry by 2029. Despite its popularity, it remains largely unregulated to date. This may change soon.

“Influence” is synonymous with fame, glamor and quick money on social media. In Europe, this may soon become synonymous with lots of unsightly documents and high fines. Europe wants to hold influencers accountable for their, well, influence. During the Belgian Presidency, the European Council calls for stricter rules on influencers across the EU. This would involve harmonizing national laws, improving enforcement of existing laws and creating new regulations tailored to specific influencers. This proposal is the latest in a series of legislative proposals across Europe. France adopted new rules on content creators in 2023, and Italy proposed its own influencer law later that year.

Called the marketing companies of the future, influencers sell products promising consumers a new life. Like all advertisers, influencers must comply with existing advertising and consumer protection laws everywhere. They are required to clearly flag any advertising as such and are prohibited from promoting certain harmful products. Despite these existing laws, enforcement has been patchy. In the US, the Federal Trade Commission (FTC) published influencer guidelines in 2019, but largely limits enforcement and penalties to companies rather than influencers. A 2020 study found that three-quarters of influencers disregard these guidelines, deliberately hiding disclaimers like #advertising in their posts.

In Europe there is also a striking lack of compliance. An investigation by the French consumer protection authority found that 6 out of 10 influencers do not comply with existing regulations. In addition, there have been a number of significant scandals involving influential people. For example, Italian influencer Chiara Ferragni was fined €1 million for falsely claiming to her 30 million Instagram followers that proceeds from purchasing a designer Pandoro cake would go towards funding a children’s hospital.

As a result, several countries came to a crackdown. At the end of 2021, Belgium, together with its Flemish regional government, established detailed guidelines for influencers based on applicable consumer and advertising law. These include, for example, the requirement for influencers to include their address in their bio. This requirement has sparked controversy, with many content creators claiming it violates their privacy.

France went further, passing a new law that provided the first legal definition of influencers: people who “engage audiences with their reputation for a fee.” This means that whether someone has 300 or 3 million followers, as long as they receive money or free stuff, they are legally considered an influencer. Designated influencers must also comply with strict new rules, including the requirement for a formal written agreement setting out compensation terms and identifying all parties involved. Finally, they are not allowed to advertise certain products and must indicate where beauty filters were used in their posts.

Influencers are similar to marketing companies in some ways, and very different in others. Firstly, influencers are usually a one-man (more often than not) one-man show. They don’t have the same amount of time and resources to devote to compliance. Most don’t even “influence” full-time or make much money (if any) at it. LinkTree’s 2022 report shows that most influencers do not consider themselves fully professionals. The average influencer has 1-10 thousand followers and sometimes receives gifts from brands in the form of free clothes, creams or trips. Complying with regulations is likely to cost them more than they would by operating online, with legal costs and complex paperwork. These costs can skyrocket if a company is fined for violating even a minor regulation.

Spain’s new influencer law, which takes these factors into account, only applies to content creators with significant “influence”. An influencer is only subject to the strictest regulations if they earn more than half a million euros a year and have more than 2 million followers. Less stringent rules apply if the influencer earns over €100,000 and has a similar number of followers. Recent Italian law has a similar structure.

These differences in regulations between countries mean that some powerful people feel at a disadvantage. A part-time Belgian content creator interviewed for this article said she lost two brand deals because she got into a legal dispute with the government over advertising signaling in her posts. “If I need to delete my posts, brands will simply turn to an influencer in the US or anywhere else in Europe where the rules and enforcement are not as strict,” she explained.

A harmonized law at EU level could alleviate these problems by harmonizing rules and enforcing them across the continent, ensuring that Belgian influencers do not feel disadvantaged compared to their Spanish counterparts. But they would still feel at a disadvantage against American influencers, where rules are looser and enforcement is less stringent.

Consumers will benefit from the new regulations. Greater transparency, stronger barriers and protection for younger consumers will lead to greater trust in influencers and the brands they support. For example, identifying where filters and Photoshop have been used can have a positive impact on teenagers’ mental health, which is a common concern for policymakers today.

The regulation will also lead to a more coordinated industry response. Efforts are made to ensure that influential people are aware of existing regulations. Last week, the European Council published a report confirming the need for more support to help influencers comply with the new rules. New organizations are emerging to represent content creators and online marketing, such as the Influencer Marketing Trade Body (IMTB) in the UK, which is now forming a pan-European alliance with members from across the EU. There is talk of permanent representation of influencers in Brussels if the Council’s proposal is pushed forward. Soon, TikTok’s popularity could mean not only free creams and serums, but also lobbying in the European Parliament.