Federal Supreme Court: influencers must label Instagram posts as advertising - in some cases

On September 9, 2021, the Federal Supreme Court ruled in three cases on the question of whether influencers had violated the obligation to label advertising in their Instagram posts. These rulings are significant because, prior to this, there had been conflicting decisions at the Higher Regional Court level in Germany. The Federal Supreme Court’s rulings should provide greater clarity—at least with respect to some of the issues involved.

Instagram posts with "tap tags"

The defendants in this case are all influencers who post photos on their profiles on the social media platform Instagram, often accompanied by short captions. They have included so-called “tap tags” in some of these photos; these appear when users click on products such as clothing and display the names of the companies or trademarks of the manufacturers or suppliers of those products. In some cases, clicking on a “tap tag” redirects the user to the Instagram profile of the respective company. The plaintiff considers these actions by the defendants to be impermissible surreptitious advertising and therefore unfair competition.

Is a post a commercial act?

The first legal issue regarding influencer posts is whether they constitute private expressions of opinion or commercial acts. This distinction is important because the prohibition on surreptitious advertising applies only to commercial acts, and in such cases, disclosure is required.   

In its decision, the Federal Supreme Court ruled that influencers who sell goods, offer services, or market their own image through social media platforms such as Instagram are operating a business, and therefore their posts constitute a commercial act. The publication of posts by these influencers is likely to increase their visibility and advertising value, thereby promoting their own business.

Furthermore, the Federal Supreme Court noted that the publication of a post can also constitute a commercial act in favor of a third-party company. According to the Federal Supreme Court, a commercial act in favor of a third party is evident if the influencer receives something in return for the post. Apart from the scenario of compensation, commercial acts in favor of a third party must also be assumed if the post conveys an overly promotional impression, for example because it emphasizes the advantages of a product from this company without any critical distance in such a way that the presentation goes beyond the scope of factually based information. However, the mere fact that images showing the product are provided with “tap tags” is not sufficient to establish such an advertising surplus. On the other hand, an advertising surplus exists if there is a link to the website of the manufacturer of the displayed product.

Given these findings, it is likely that future disputes will center on whether a post is “excessively promotional” if the plaintiff cannot provide clear evidence that the influencer received something in exchange for the post. Determining whether a post is excessively promotional requires a comprehensive assessment by the court and always depends on the facts of the individual case.

Labeling the commercial purpose of a post

If a post constitutes a commercial act by the influencer, the second legal issue is how influencers must disclose the commercial purpose of their posts. In the past, it was argued that the circumstances of the post—namely, the influencer’s social media profile—often make this commercial purpose clear, such as a high number of followers and a professional design, so that explicit labeling is not necessary. The Federal Supreme Court confirmed that the commercial purpose of a post can be inferred from the factual circumstances, but only in cases where the influencer intends to promote their own business. In cases where the influencer intends to promote a third party in their post, it must be explicitly labeled as such.

Consequences of the decisions

To some extent, these decisions make life easier for influencers, as not every post necessarily has to include an explicit reference to advertising. As long as only the influencer’s own company is being promoted, the commercial nature of the content should generally be apparent from the design of the profile. However, the situation is different when third-party companies are promoted, which is particularly the case if the influencer receives some form of compensation for the post. While there is clarity on this point, numerous other questions remain unanswered, such as whether any provision of benefits by the advertised company is sufficient to constitute a commercial act, or how such disclosures must be worded and presented. 

It is worth noting that decisions by the Federal Supreme Court are significant not only for influencers, but also for the companies being advertised and the agencies that connect companies with suitable influencers. This is because, under certain circumstances, these entities can also be held liable for missing or insufficient labeling. Therefore, the advertised companies and influencer agencies should consider the existing legal requirements and take precautions before entering into a partnership with an influencer. For example, training courses for their influencers on how to properly label a post are recommended. Furthermore, certain clauses should be included in an agreement with an influencer, such as the right to request the removal of a post in the event of insufficient labeling.