UPDATES ON THE “INFLUENCERS” LAW: ANALYSIS BY DE GAULLE FLEURANCE

French Law no. 2023-451 of June 9, 2023 sets out a legal framework for influencers, their agents, the advertisers and the platform that distributes their content. The deciphering below offers a quick overview of the main new features of this law.

 

[Update December 2023]

The French legislation on commercial influence may be incompatible with the recent regulation “Digital Service Act” (DSA).

 

The European Commissioner for the Internal Market, Thierry Breton, has expressed his concern to the French Minister for European and Foreign Affairs about the recent French laws on the digital majority at the age of 15 and on commercial influence, pointing out several incompatibilities with the recent regulation “Digital Service Act” (DSA). Thierry Breton asserts that “French laws run the risk of fragmenting the single European market which the DSA aims to harmonize, by imposing unjustified restrictions on the free provision of services (…) that are not established in France” and calls on the executive to repeal certain provisions that have been adopted. Two provisions seem to contravene the DSA:

• Firstly, the law concerning on the digital majority aims to oblige social networks to verify that users under the age of 15 have received parental authorization before registering on the social network.
• Secondly, the law on commercial influence requires platforms to report and remove illegal content.

 

Currently, the conformity of the text with European law has not been decided, and the text is still enforceable in France. The Directorate General for Consumer Affairs, Competition and Fraud Prevention (DGCCRF) is paying close attention to the effective application of the law.

 

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[Analysis July 2023]

As set forth in the proposed bill presented by MPs Arthur Delaporte and Stéphane Vojetta:

• The phenomenon of influence on social media is not regulated under French law, necessitating regulation.
• The bill regulates actors in the influence sector, including influencers, influencer agents, and platforms hosting their content.
• The main objective of this law is to put an end to scams and abuses by certain influencers on social media.
• Examples of abuses include the promotion of dangerous medical products, harmful cosmetic products, overpriced products, dropshipping scams, etc.
• It is crucial to combat misleading or fraudulent online commercial practices.
• Influencers, followed by millions of people, including minors, exert their influence through a falsely intimate relationship, creating trust that can influence users’ purchasing decisions.
• This bill aims to hold influencers, agencies, advertisers, and platforms accountable to enhance the protection of social media users and consumers.
• Foreign influencers will need to appoint a legal representative in France to address concerns about the impunity of certain individuals.
• The overall goal is to ensure better protection for consumers, social media users, and influencers by more effectively regulating their activities.

 

The bill was adopted by a majority in the National Assembly (259 in favour out of 352 votes cast) and unanimously in the Senate (342 votes cast).. Thus, France now has a specific legal framework for influencers, their agents, and other individuals in this sector (advertisers, platforms), incorporated in the “Law No. 2023-451 of June 9, 2023, aiming to regulate commercial influence and combat abuses by influencers on social media.”

 

To achieve its objectives, the text first creates new categories in positive law:

• Influencer (or “person engaging in commercial influence through electronic means”): individuals who, for remuneration or in-kind benefits, “mobilize their notoriety with their audience to communicate” online “content aimed at promoting, directly or indirectly, goods, services, or any cause.”
• Influencer agent: a person who, for consideration, represents influencers with natural or legal persons and, where applicable, their representatives, for the purpose of promoting goods, services, or any cause for consideration.

 

Influencers, their agents, or advertisers will be required to enter into written contracts once they reach a certain threshold of remuneration or in-kind benefits (to be defined by decree). These contracts must include certain mandatory clauses: assigned missions, payment conditions, submission to French law when subscribers in France are targeted, etc.

 

Another innovation is the introduction of the principle of joint liability among the advertiser, the influencer, and their agent for the compensation of “damages caused to third parties in the execution of the commercial influence contract that binds them” (Article 8 III.).

 

Regarding provisions specific to the promotion of banking and financial products and services, the new legislative framework includes provisions that generally prohibit influencers from promoting:

• Financial contracts;
• Services related to digital assets unless registered or approved as a Digital Asset Service Provider (DASP) by the AMF (French Financial Markets Authority);
• Digital assets themselves (i.e., cryptocurrencies and utility tokens), unless again registered or approved for related services. However, the text specifies that if the promoted digital assets are not subject to registration or the possibility of DASP approval (such as NFTs), advertisers may not be prohibited from promotion;
• ICOs (Initial Coin Offerings) unless they have obtained the corresponding visa from the AMF;

 

The bill also prohibits the promotion of:

• Sports advice or predictions;
• Professional training courses via the Personal Training Account (CPF) in exchange for remuneration or a product;
• Gambling and games of chance, unless the promotion is limited to a platform that has the “technical capability” to exclude underage users.

 

Regarding provisions governing the promotion of products and services to consumers, the Law provides several clarifications regarding the rights and obligations of influencers, starting with a reminder that all European and French legislation governing the advertising and promotion of goods and services online applies to the practice of commercial influence by electronic means.

 

To ensure transparency for consumers, the Law requires certain information to be displayed on content published by influencers:

• When influencers promote products or services, they must clearly display the words “advertisement” or “commercial collaboration” on the image or video throughout the promotion.
• If the content includes edited images, such as a filter, the content must clearly display the words “Edited Image” on the image or video throughout the promotion;
• If the content includes AI-generated images, such content must clearly display the words “virtual images” on the image or video throughout the promotion.

 

In addition, the Law requires influencers to take responsibility for their “drop shipping” practices, in particular by ensuring that the products they sell are available and legal.

 

Minors under the age of 16 appearing on screen will benefit from the protective provisions of labour law governing the employment of minors, as well as child models. As a result, 90% of the sums received through commercial influence will be retained until the minor reaches the age of majority.

 

Furthermore, the law prohibits the use of wild animals by influencers if they do not keep them legally, except in collaboration with an establishment authorised to keep such animals (such as a zoo).

 

Regarding public health provisions, the law subjects influencers to the rules governing the advertising of medicines, medical devices, in vitro medical devices, health claims for food, advertising for drinks with added salts, sweetened or alcoholic drinks, and tobacco and vaping products. The law also strictly prohibits the promotion of cosmetic surgery, therapeutic abstinence and products considered to be “nicotine products”, which are not covered by tobacco regulations.

 

Influencers who violate the law’s prohibitions or obligations could face up to two years in prison (or up to seven years in aggravating circumstances), heavy fines of up to €300,000 and a ban on practicing their profession.

 

The Directorate General for Consumer Affairs, Competition and Fraud Prevention (DGCCRF) has strengthened its powers and can now attach penalties to its injunctions. If the influencer does not comply with the DGCCRF’s injunctions, the authority has the power to ask the platform to take various measures to put an end to the illegal content, such as sending a warning to consumers, de-linking a social network account, or limiting or blocking access to a social network account.

 

Finally, four decrees are expected to be issued shortly to ensure better application of the law:

• A decree on the new competences of the DGCCRF, which will strengthen its powers of injunction and penalities ;
• A decree specifying the conditions under which influencers must specify the terms “edited images” and “virtual images”;
• A decree setting the threshold above which it is mandatory to formalise a contract for a marketing influence operation;
• A decree setting out the conditions under which influencers based outside the European Union must have some form of legal representation and compulsory professional indemnity insurance.