The Social Chain has been ordered by the Government to stop conducting product endorsement campaigns through celebrities’ social media accounts.
The firm, which styles itself as the UK’s largest influencer network, was criticised by the Competition and Markets Authority for arranging for “widely followed social media personalities” to promote films, games, takeaway and dating apps without declaring that the content was paid-for advertising.
It said The Social Chain conducted 19 marketing campaigns featuring undisclosed advertising on Twitter, YouTube and Instagram in a four-month period last year.
The Social Chain, which has offices in Manchester and London, claims to be able to put a message in front of 66 million people at once using its own social media pages.
The CMA wrote to 43 celebrities and 15 businesses to “warn them that arranging or publishing advertising that is not clearly labelled may result in them breaching consumer protection law”.
It refused to name the celebrities and businesses. Transparency International said it should do so.
“It is important that when companies are caught breaking the rules, either in letter or in spirit, that the names of those companies, and any others involved in the offence, are made public,” UK spokesman Peter Van Veen said.
“Only through disclosing such information will any sanctions act as a future deterrent for those companies and others.”
Social Chain released a statement claiming that it had been in contact with the CMA for the past 11 months.
“Social Chain has been engaging with the CMA over the past 11 months to ensure we fully comply with the ever-changing advertising regulations,” it read.
“When the CMA first contacted Social Chain in March 2015, Social Chain was a start-up team of six. Over the past year, Social Chain has expanded into four markets globally with a team of 80-plus.
“Key hires include a team of directors from other leading marketing and social agencies and a compliance officer, guaranteeing all our work complies with advertising regulations.
“Social Chain is looking forward to continue educating our clients on advertisings rules and regulations, and paving the way in social media marketing.”