Judgment against Danish influencer for hidden advertising - fine reduced significantly
The Court in Elsinore recently fined a Danish influencer with a large number of followers on both Instagram and their blog DKK 10,000 for seven instances of failure to comply with the prohibition against hidden advertising. The prosecution service had claimed a fine of DKK 50,000.
The case concerned seven posts on the influencer's Instagram profile and blog mentioning services and products such as beauty treatments, clothes and handbags which the influencer had received for free from a number of businesses. The influencer had tagged the businesses in the posts but had not labelled the posts as advertising.
The Danish influencer was among the influencers reported to the police in 2019 by the Danish Consumer Ombudsman (article in Danish).
The Court in Elsinore found that the influencer had failed to comply with the prohibition against hidden advertising by not informing the consumer of the commercial aspect of the posts.
Fine reduced significantly
The prosecution service had claimed a fine of DKK 50,000.
In connection with the assessment of the fine, the court made a general statement as to the level of fines in cases such as this. The court pointed out that when determining fines in criminal cases, the sanctions must be proportional to the various types of crime, and noted that in case of breach of special legislation (such as cases concerning breach of the Marketing Practices Act) claims often include quite significant fines compared to the level of fines in cases concerning breach of the Criminal Code and the Highway Code. While the court finds that this may be well founded in cases where it can be difficult to redress adverse effects, the court pointed out that the adverse effect of hidden advertising as in this case might effectively be brought to an end merely by labelling the posts as advertising. In addition, the court took into account that this case concerns well known and accessible consumer items that might be purchased at a price that will be clear and transparent at the time of purchase.
On this background, the court found that the fine should be significantly lower than first claimed by the prosecution service, and the fine was subsequently set at DKK 10,000.
Further, the court refused to take into account the previous fines imposed in the Consumer Ombudsman's cases on hidden advertising in connection with the use of influents in marketing.
The case is interesting, partly because it shows that there must be proportionality between offences and the level of fines in cases concerning breach of the Marketing Practices Act, partly because the court refuses to take into account previous cases in which extra-judicial fines have been imposed as they are not necessarily persuasive precedents as to how fines in such cases should be assessed by the court.
New rules on higher fines
On 6 October 2021, the Danish Ministry of Industry, Business and Financial Affairs submitted a proposal for the amendment of the Danish Marketing Practices Act. The new bill contemplates a fine model which in many cases will imply significantly higher fines, as the assessment of a fine will be based on the relevant business' sales, among other things. You can learn more about this at our marketing law seminar on 9 December 2021 where a few seats are still available.
Do you want to know more?
If you are an advertiser or an influencer and want to know more about the rules on hidden advertising, including in connection with the use of influencers, please contact Plesner's Marketing and Consumer Law Team.