A legal storm is raging in Belgium over the addresses of influencers, but what about listed companies?
Earlier this month, professional influencers sounded the alarm over the Belgian administration’s intention to impose fines of up to 80,000 euros on influencers who do not disclose mandatory information about their company, such as addresses, on social networks. According to the government, influencers provide an information society service, which means that they must be transparent to consumers and provide information such as their physical addresses.
Influencers want to avoid this, and they’re not the only ones. Large, publicly traded companies rarely disclose information about their business when advertising on social media. They consider their messages as advertising, which entails no obligation to disclose commercial information.
The Court of Justice of the EU (CJEU) could possibly be asked to decide whether companies, large or small, including professional influencers, must disclose commercial information when they connect with the public via social media, even if they are advertising and not selling.
At the beginning of August, Belgian online influencers were plunged into a small storm when the Federal Public Service Economy informed a number of influencers that they did not comply with the legal obligations to provide information about their companies on social networks, such as YouTube, Instagram and Twitter. The influencers would have violated the Code of Economic Law and are liable to fines of up to 80,000 euros. Well-known Flemish influencer Nathan “Acid” Vandergunst strongly protested, disapproving of the obligation for influencers to mention their home address. Vandergunst said this requirement violates the right to privacy. Various ministers, state secretaries and party leaders have also raised their voices in opposition to what they see as inappropriate legislation. In response, the FPS Economy has granted influencers an extension until September 30, 2022.
The Code of Economic Law applies to everyone, but if we look at the top 20 listed companies in Belgium, almost all of which are active on social media, all but one have also breached their legal obligation to provide information about their activities. Will these large companies also be threatened with fines of 80,000 euros or even 4% of their annual turnover?
Legally, the arguments in favor of the sale of goods and services on the Internet are perfectly clear. When influencers sell clothing and similar products on social media, they are engaging in distance selling and special consumer protection rules apply. For example, consumers have the right to withdraw from a purchase within 14 days, allowing them to try a product and return it if necessary. In this situation, the consumer must know who the seller is (and who to contact in the event of a problem with the product), which is why the law provides that the “geographical address where the business is established” must be indicated (Article VI.45 §1-3° of the Code of Economic Law). The common sense of this stipulation is clear and no Minister or Secretary of State has proposed to change this legal provision. In addition, the legal provision transposes textually the European directive on consumer rights (2011/83/EU), from which Belgium cannot derogate.
Things are different, however, when the influencer is not selling goods or services through social media. In this case, he is not required to comply with the rules of distance selling, but other rules – which are more interpretable – apply. The FPS Economy assumes that an influencer also provides an “information society service”, and these service providers are required by law to also indicate their geographical address (article XII.6 §1-2° of the Code of economic law, which transposes the European e-commerce directive (2000/31/EC) into Belgian law).
The legal question is therefore whether influencers actually provide “information society services”. An information society service is defined as “any service normally provided for remuneration, remotely, by electronic means and at the individual request of a recipient of the service” (Art. I.18-1° Code of Law economy and Art. 1.1 of EU Directive 2015/1535). Social media companies such as Facebook, Twitter or Instagram, and platforms such as Airbnb or Bol.com, certainly offer information society services and must therefore indicate their geographical address.
But do influencers, big or small, fall within the scope of this law because they “generally offer their services for remuneration, electronically, remotely and upon individual request”?
The answer to this question is negative for influencers who use social media casually and unprofessionally. These influencers are not professionally remunerated and therefore do not provide an information society service. They only give their opinion as citizens, not as entrepreneurs. They do not have a VAT number and do not need to disclose their home address. Their right to privacy is protected.
Professional influencers, on the other hand, are paid. Traditional, smaller influencers receive payment per message or click from the companies whose goods or services they recommend, or they are paid indirectly through advertising revenue or free goods or services. Large corporations, such as publicly traded companies, are not immediately recognized as influencers because they only use social media to promote their own goods or services, but their posts nonetheless constitute company services. information and their compensation lies in the additional sales that they become aware of.
Large and small businesses that operate electronically (i.e. via social media on the Internet), remotely (i.e. not in the same room as the consumer) and at the request of the individual (i.e. the consumer views his messages at will) provide information society services and, according to the FPS Economy, must disclose personal information, such as their geographical addresses. Their right to privacy is not absolute and the legislator favors transparency in the interest of the general public.
How is it then that the FPS Economy now criticizes small influencers for offering information society services without fulfilling the legal information obligations, while large companies that also express themselves via social networks and offer information society services are ignored? A brief review of the use of social media by the top 20 listed companies in Belgium reveals that there is still some way to go. All but four of the companies use Instagram and YouTube. Only one company mentions its address and company number (Colruyt on its YouTube channel).
Perhaps the assumption that companies using social media in itself providing information society services, the basis of the position of the FPS Economy, is incorrect. Perhaps these companies are just advertising, either for themselves or for others. Advertising is not a service and does not require the communication of an address and a VAT number. There is no disclosure requirement for advertising on radio and television, in movie theatres, or in newspapers and magazines. So why should there be any for social media advertising?
The position taken by the FPS Economy can have serious consequences, not only for influencers and listed companies, but for all forms of advertising on the Internet. For example, each company that advertises via banners or pop-ups, Google AdWords or websites (i.e. sites that do not sell products) will have to disclose its address, as well as its name, VAT number, etc.
Critics of the FPS Economy’s position hope that the matter will soon be submitted to the CJEU, the highest court of law in the EU, which will ultimately decide whether companies must disclose their personal data when they connect with the public via social networks, even if they advertise and do not sell anything.