German court issues rules for ads by Instagram influencers

A top German court has decided that social media influencers can recommend products without the content necessarily needing to be flagged as advertising. But there are some limits.

Instagram is one of the most important platforms for today's social media influencers. Photo: AFP/Getty Images

Germany's Federal Court of Justice on September 9 ruled that social media content that includes product recommendations, pictures, and tags to companies does not necessarily have to be labeled as advertising. However, judges said posts should be flagged up as commercials if they were "excessively promotional," or if an online influencer received something in return.

What did the judges say?

The judges in Karlsruhe said social media influencers may refer to and recommend products in photos without having to use an ad label.

This applies as long as the content does not become too promotional in nature. Instagram influencers could also use so-called "tap tags" — links from posted pictures — to the social media accounts of companies.

However, the court said, these tags should not directly link to a company homepage or product website. "The mere fact that pictures on which the product is depicted are provided with tap tags is not sufficient for the assumption of advertising excess," the judges said.

Why was the question asked?

The Karlsruhe court effectively agreed with past rulings when it came to social media advertising. The Association of Social Competition (VSW) — a Berlin-based association that purports to fight unfair competition practices — had filed three legal objections to what it claimed was surreptitious, unlabeled advertising.

The cases were against Bavaria-based influencer Cathy Hummels, Hamburg fashion influencer Leonie Hanne and Göttingen fitness influencer Luisa-Maxime Huss. Two of the VSW's lawsuits were unsuccessful; Hummels and Hanne were deemed not to have broken the law because they did not receive anything in return. This was upheld by the BGH on September 9.

However, the VSW complaint against Huss was successful at the time. Judges believed that a case involving an unlabeled post about a raspberry jam represented a violation of competition law.

Internet users who tapped on a picture of the jam would see the name of the manufacturer. Tapping this would see them redirected to the company's Instagram profile.

Judges in the original case believed the fact that both Huss and the manufacturer benefitted resulted in an advertising advantage. Judges at the BGH agreed, although the redirecting of users to the firm's Instagram account — rather than its own website — was not, in itself, a breach that should require labeling.

rc/sms (dpa, AFP)