Should we regulate influencers? - Part 3

Read part 1 - The power of influencers in digital marketing, from fashion to politics

Read part 2 - The continuity of influencer culture

In May 2020, in the midst of an ongoing pandemic that forced people to seek entertainment at home and online, RCTI or Rajawali Citra Televisi Indonesia filed a petition to the Constitutional Court, calling for a judicial review of the Broadcasting Law to create a level playing field for broadcasting media and over-the-top digital content and service providers. If granted, it could put up hurdles for individuals who want to live-stream videos on social media. The media did not widely report the news until August, which led to mostly negative reactions from Indonesian netizens.

With the rise of independent content creators with independent platforms over the past few years, big broadcasting networks, such as RCTI, are gradually losing grounds. These new-age content on social media are relatable, easily accessible and mostly free of charge, which make them particularly enticing to viewers. On the creators’ side, having their own platform means more control on the kind of content they want to put out. At the same time, these creators and their social media content are not bound by the same broadcast regulations that are binding networks like RCTI.

RCTI demanded that any program broadcasted via the internet shall abide by the Indonesian Broadcasting Law to prevent any content that may not comply with the 1945 Constitution and Pancasila. If granted, live-streams on social media, such as Instagram, Facebook and YouTube, will require a broadcasting permit as applied to mainstream broadcasting media. Failure to present such a permit may lead to the platforms being closed down.

Frankly, RCTI’s concerns are understandable. As of today, influencers and content creators are not governed by a specific set of rules in their operations. This means that their content has the potential to misinform, mislead, or mistreat their audience due to lack of regulations. It is a valid concern, especially with regards to endorsement.

In some countries, influencers are required to disclose if a post contains paid promotions. According to the Federal Trade Commission Act (FTCA), influencer marketing falls under advertising laws and regulations. One of the regulations stipulates that influencers should disclose endorsement deals, including affiliate links, on their posts.

Facebook and Instagram have their own branded content policies. As stated on Facebook, “We define branded content as a creator or publisher’s content that features or is influenced by a business partner for an exchange of value.”

Based on the definition, sponsorship isn’t limited to monetary value. It can be an exchange of service or goods. Consumers have the right to be informed whether the content is sponsored or not as sponsorship often requires the influencers to promote the benefits of the products.

The regulations also prohibit influencers from promoting counterfeit products and pyramid schemes. An area that Indonesia should definitely cover.

However, looser regulations on partnerships and due diligence processes for influencers in comparison to mainstream media means that there is more room for fraud.

Image: Ticket platform under investigation for allegedly misusing consumers’ credit cards

Earlier this year, a number of influencers, including Gisella Anastasia, were being investigated over endorsement deals with an alleged ticket platform that turned out to be a cover-up for an illegal carding operation. The company stole credit card information and misused it to buy tickets.

At the end of the day, in cases like this the followers are the ones being compromised. This leads us to the questions: should social media influencers be regulated? And how should we do that?

While there aren't any specific regulation that covers internet content, the Consumer Protection Law has covered some of the basics. Article 4 in Law Number 8 Year 1999 on Consumer Protection stipulates that one of consumers’ rights includes rights to obtain correct, clear and honest information on the condition and warranty of the goods and/or services.

It’s worth noting that some consumers might not be able to keep up with technology, hence the inability to assess and filter information. This could be misused by certain parties.

For instance, Instagram account @korbantukanggigi (Victims of Illegal Dental Practice) actively educates the public to avoid illegal dental practices that offer dental care with low prices. Such practices caused negative side effects, from irritation to cancer. Illegal dental practices usually label themselves as ‘cheap’ and ‘safe.’ This is called fraudulent misrepresentation where the statement is clearly misleading and gives false promises.

When it comes to endorsement contracts, influencers often find themselves in disadvantageous situations. This could happen when the company has higher economic advantage over the influencers.

Take, for instance, a standard contract. Standard contract contains terms and conditions prepared by companies hiring influencers. The hiring party could misuse the standard contract, especially when the influencers are inexperienced and unaware of the legal consequences. Standard contracts leave influencers with no option but to either accept or reject the offer.

Rate cards and exchange value need adjustment as well. Exorbitant price offered by influencers is an issue for companies. For instance, a micro influencer could have the same rate as a macro influencer. On the other hand, there is no standard guideline on how to set the price for influencer marketing. Influencer is considered a freelance work.

Then, there is a disproportionate workload where companies ask for free work in exchange for products and vice versa, where influencers ask for free products in exchange for exposure. Sometimes, the exchange value doesn’t match up with the amount of work.

One of the infamous cases that blew up on social media is Awkarin or Karin Novilda’s talent management A-Team. The A-Team asked an event organiser to help them create an event in exchange for exposure. Karin and her team had provided a statement and clarified the matter.

In this case, both parties have to consider the effort each of them has to put into the work and come up with fair payment.

Going forward, we do believe that relevant regulations should be put in place to oversee the activities of influencers and independent content creators. They are arguably the hot new marketing ‘tools’ that brands - large and small - have come to accept, and will only become more influential in the years to come.

This is important not only to protect consumers, brands and the platforms on which they create, but the influencers as well; currently, the transactions are too much of a wildcard with grey areas all around. Influencers and digital content creators are now well on their way to create their own sub-section in the entertainment industry. Their size, scale and reach are simply too large not to have their own set of rules. These rules shall be the guide industry players, old and new, refer to, just like in any other industry.

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