134/10    13 December 2010

In precedent-setting enforcement action, the OFT has received undertakings from Handpicked Media, an operator of a commercial blogging network, requiring them to clearly identify when promotional comments have been paid for.

In taking this enforcement action the OFT has confirmed its view that online advertising and marketing practices that do not disclose they include paid-for promotions are deceptive under fair trading laws. This includes comments about services and products on website blogs and microblogs such as Twitter.

Online promotional activity, just like any other promotional activity, must clearly identify when promotions and editorial comment have been paid for, so that consumers are not misled.

Handpicked Media operates a network of bloggers and niche websites across a variety of sectors. Through the signed undertakings, it has agreed not to engage in promotional activity unless bloggers within its network prominently disclose, in a manner unavoidable to the average consumer, that the promotion has been paid for or otherwise remunerated.

Handpicked Media cooperated with the OFT throughout the investigation.

Heather Clayton, Senior Director of OFT's Consumer Group, said:

'The internet plays a key role in how people purchase products and services and the importance of online advertising continues to grow. The OFT has bolstered its expertise in this area and is taking targeted action to ensure that the law is clear, increase business compliance and empower consumers.

'The integrity of information published online is crucial so that people can make informed decisions on how to spend their money. We expect online advertising and marketing campaigns to be transparent so consumers can clearly tell when blogs, posts and microblogs have been published in return for payment or payment in kind. We expect this to include promotions for products and services as well as editorial content.'

NOTES

1. Handpicked Media has a registered office at 46A Carnaby Street, London, W1F 9PS.
2. As a result of its investigation, the OFT formed the view that Handpicked Media was operating in breach of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). In particular, the OFT identified evidence of commercial practices which:
   
   a) Constituted misleading omissions contrary to Regulation 3(4)(b) under the provisions of Regulation 6 of the CPRs, in that the promotion did not disclose material information (that is, that the promotion had been paid for or otherwise remunerated), or provided that information in a manner that was unclear, unintelligible, ambiguous or untimely. As a result, this caused or was likely to cause the average consumer to take a transactional decision that would not have been taken otherwise,
   
   and b) Constituted unfair commercial practices, contrary to paragraph 11 of Schedule 1 of the CPRs, as they involved the use of editorial content in the media to promote a product where Handpicked Media had been paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer.
   
3. View the investigation case closure summary.
4. From the 1 December the OFT took the lead on a common activity with 11 other EU Member States under the Consumer Protection Cooperation (CPC) network to improve investigation and enforcement of consumer protection issues online. The activity is partly funded by the European Commission.
5. View the OFT's e-Protection strategy press release 131/10, which sets out its long-term strategy to protect consumers shopping online in the UK.
6. View further information for businesses on their obligations under the CPRs.
7. The OFT does not provide advice or resolve individual complaints for consumers. Consumers who are concerned they have been unfairly treated or want advice on their personal circumstances can contact Consumer Direct.