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Section 4 of the Danish Marketing Practices Act prohibits covert advertising. This means that all advertisements should be clearly distinguishable as such regardless of form and medium of transmission. The test for determining whether a post on social media needs to be distinguished as an advertisement is whether the post is induced by “commercial intent”. This will clearly be the case when an influencer is paid (either in the form of money or products) by the brand. However, “commercial intent” can also exist through a tacit agreement, for example where a brand offers one of its products to an influencer in the hope that this will result in a post by the influencer which shows the product in a positive light.
The Danish Consumer Ombudsman is an independent public body which regulates compliance with Danish marketing law. In assessing whether a post is clearly marked as advertising, the Consumer Ombudsman will apply weight on the following:
- which words have been used. For example, “advertising”, “advertisement” or “commercial” will adhere to the regulation, while the wording “in collaboration with…”, “sponsored”, “spons” or “ad” will not;
- where the information is located. One must be able to see that the post is an advertisement before choosing to read or see it;
- the disclosure has a clear font and size colour; and
- content aimed at children should be clear to children that it is advertising.
The Danish Consumer Ombudsman also requires that, if a company enters into an agreement (written or oral) with an influencer, where the influencer mentions the company or its product in any way on social media, it must be clearly indicated that such activity constitutes advertising and who the advertisement is for.
Also, if a brand sends a gift to an influencer, the post must be clearly stated that the product is a gift from the brand when the product is mentioned.
Primary responsibility for distributing commercial communication which is distinguishable as such rests with sponsoring brand. However, other traders, businesses, or advertisement agencies may incur liability as well.
Violations of section 4 may result in a fine and the issue of a press release from the Consumer Ombudsman. The magnitude of the fine will be based on the circumstances of the case, the severity of the breach and profit gained (or intended to be gained).
Link to the influencer section of the Danish Consumer Ombudsman website (in Danish):