A Future French Regulatory Framework for Influencers

According to a survey conducted by the French Competition, Consumer Affairs and Fraud Prevention Directorate (DGCCRF), 60% of the influencers targeted by the survey since 2021 have failed to comply with rules on advertising and consumer rights[1]. In recent years, numerous scandals have exposed influencers’ misleading commercial practices (dropshipping, promotion of non-existent, counterfeit, or dangerous products etc.) aimed at a mainly underage audience[2]. Hence, the need for a Parliamentary intervention.

On June 9th, France enacted a new law which aims to "regulate commercial influence and fight against abuses by influencers on social media"[3]. France appears to be one of the first countries in the European Union (EU) to establish a comprehensive framework and clear rules for the commercial influencer industry.

This law has one compass: to protect consumers. This protection is based on four cardinal points: clarifying (1), framing (2), rending accountable (3) and educating (4).

1. CLARIFYING THE LEGAL STATUS OF INFLUENCERS AND THEIR ACTIVITIES

Firstly, the law provides for a legal definition of the activity of commercial influence, which refers to the activity in which “natural or legal persons, in exchange of consideration, communicate to the public by electronic means content intended to promote, directly or indirectly, goods, services or any cause". While the previous wording of the draft law made the application of the bill dependent on a threshold value of the consideration, this reference has been removed to avoid strategic bypasses of the bill. The members of parliament also removed the criterion of “fame” from the definition, given the obvious difficulty of interpreting this vague concept.

Some influencers are independent, others work with influencer agents and agencies. The law provides for a framework for these commercial relationships, which are sometimes difficult to define under existing regulation. It therefore also defines the activity of influencers' agents and lays down formal obligations, on pain of nullity, applicable to the contract between the influencer and an influencer's agent, an advertiser, or their representatives.

These obligations apply when the contract is concluded for a sum or value exceeding a certain amount to be determined by a future French ministerial decree. These contracts must include mandatory clauses on the identity of the parties, the nature of the tasks entrusted, the nature of the consideration, the terms of remuneration, the rights, and obligations of the parties (especially regarding intellectual property rights) and the contract’s submission to French law if the influencer’s commercial content is primarily intended for the French public.

Influencers or their legal representatives outside the EU are required to take out civil liability insurance in an EU Member State to cover their activities on the French territory.

Given that many French influencers are based outside the EU (often in Dubai), the bill seeks to facilitate their identification and requires all influencers who are incorporated or have sole trader status in France to appoint a legal representative in the EU who must have sufficient powers and resources to be able to cooperate effectively with the competent French administrative and judicial authorities if necessary.

Finally, it is interesting to highlight that the bill establishes joint liability between the influencer and the advertiser for any damage caused to third parties in the performance of the commercial influence contract. This provision not only protects against the risk of an influencer becoming insolvent, but above all encourages all parties to the contract to comply with the applicable legislation.

2. A FRAMEWORK FOR THE PROMOTION OF GOODS AND SERVICES BY INFLUENCERS

This bill explicitly confirms that French and European laws and regulations related to the advertising and promotion of goods and services on the Internet also apply to influencer marketing. Influencers are therefore also subject to the rules on nutritional and health claims on food products, the rules on health information for the promotion of alcoholic beverages or for the promotion of beverages with added sugar, salt, or sweeteners.

Under penalty of 2 years' imprisonment, a fine of 300,000 euros and a possible ban on exercising an influencer activity, the bill expressly prohibits the following practices:

In the name of the protection of public health, the direct or indirect promotion of nicotine pouches and, more generally, of all acts, procedures, techniques, methods, medical treatments, and operations, as well as the promotion of medicines contrary to the obligations of the French Public Health Code. Along those lines, they also prohibit the promotion of therapeutic abstinence without medical advice;
The promotion of illegal and counterfeit products, in accordance with the French Intellectual Property Code;
The promotion of financial products and services that involve a risk of monetary loss (digital assets/risky investments), with the exception of NFTs, as the French Government has already begun work to better regulate this type of asset;
Promotion of subscriptions to sports bets or predictions;
Promotion of gambling without complying with current regulations and without including information that such gambling is reserved for people of legal age;
It is important to specify that promotional contracts with gambling operators must include a clause ensuring compliance with applicable regulations. Gambling communications may only be carried out on platforms that offer an audience exclusion mechanism for minors in accordance with Regulation 2022/2065 on a single market for digital services and amending Directive 2000/31/EC (hereinafter "DSA") ;
Promoting or selling a product that is conditional upon enrolment in a professional training course;
Interacting with or showing on social media non-domestic animals whose possession as pets is already prohibited in France.

The bill also sets out additional information requirements to the traditional advertising rules relating to the promotion of certain goods and services, subject to a penalty of one year's imprisonment and a fine of €4,500:

The promotional nature of the offer must be indicated by the words "advertising" or "commercial collaboration" in a clear, legible and identifiable manner on the image in all its formats throughout the promotion;
Internet users must also be informed if an image has been retouched to make the figure thinner or thicker, or to change the appearance of the face, by adding the words "Retouched Image". While the previous wording made this compulsory for any "alteration of the image", MPs wanted to specify the type of alteration in order not to limit photo or video retouching (colourimetry, 3D, contrast, etc.) and thus preserve the creativity and innovation of content creators;
Internet users must also be informed of any image of a face or silhouette resulting from artificial intelligence processes by adding the words "virtual images";
Finally, when the promotion is carried out by influencers whose activity is limited to the marketing of products without taking responsibility for the supply of these products, they must inform the consumer of the suppliers’ identity and ensure that the products are available, legal, and not the result of counterfeit activities.

It should be noted that although the DGCCRF already has the power to issue injunctions for the removal of illegal advertising content (L.521-1 of the French Consumer Code), this law reinforces its administrative injunction mechanism to better guarantee compliance with the bill and French consumer protection rules in general. Injunctions will henceforth be accompanied by daily fines, capped at €3,000 for general cases and 0.1% of the professional's worldwide turnover for the most serious practices.

3. MAKING ONLINE PLATFORMS ACCOUNTABLE FOR ILLEGAL INFLUENCING CONTENT IN LINE WITH THE DSA’S REQUIREMENTS

The bill reiterates the need for platforms to put in place easily accessible and user-friendly mechanisms for reporting illegal content in breach of its obligations, in line with Article 16 of the DSA. The bill also provides that legal entities whose purpose is to fight against influencers’ abuses may be granted the status of "trusted flaggers" and thus benefit from priority treatment of their reports by platforms in accordance with Article 22 of the DSA.

To facilitate the task of online platforms in the fight against illegal influencing content, the bill forces them to cooperate with the French State and the DGCCRF. Firstly, online platforms will have to sign a protocol of commitment with the French authorities to define their mutual obligations to ensure the effective regulation of the commercial influence industry. In addition, as soon as they receive an injunction from the DGCCRF to remove illegal advertising content, online platforms must inform the DGCCRF as soon as possible of the action taken, in accordance with articles 9 and 10 of the DSA. The DGCCRF is also responsible for providing online platforms, on a regular basis and at least every 6 months, with a "list of websites that illegally advertise products or services" so that they can be blocked by platforms.

4. EDUCATING AND PROTECTING CHILDREN FROM THE ABUSE OF COMMERCIAL INFLUENCE

While the French National Assembly initially suggested to make it compulsory for schools to provide children with training on digital risks and mechanisms for reporting illegal content online, this proposal was not included in the final version of the bill.

Still, the bill strengthens the protection of children directly affected by the activity of commercial influence by extending the scope of the French law of 19 October 2020 aimed at regulating the commercial exploitation of the image of children under the age of sixteen online. As a reminder, this law imposes labour law protection measures (administrative authorisation, medical certificate, maximum working hours, etc.) on any parent or agent who wishes to exploit the image of a child. However, its scope has so far been limited to "video-sharing" platforms and has not explicitly included social media. As a result, the bill proposes to extend the obligations to all "online platforms" to protect all children whose images are commercially exploited online.

CONCLUSION

While the bill has alarmed many influencers, who have implored MPs not to see them as a threat and damage a thriving economy because of the excesses of a minority of them, MPs have consistently reiterated during parliamentary debates that the creation of a reference framework will only enhance their work and reputation.

To limit all questionable practices that were raised during the debates and to help the influencers to understand this new legal framework , the French Government has already published guidelines on good practices for influencers[4].

The proposed law is expected to be published in the Official Journal in the next few days. It will be necessary to anticipate the forthcoming implementing decrees which will, among other things, specify the appointment of representatives within the EU for French influencers living abroad, the insurance to be provided and the implementation of the DGCCRF’s injunctions.