Trial By Fyre

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A brand new Netflix documentary doing the rounds right now has sparked a maelstrom of controversy around the ethical and legal culpability of “social media influencers” in advertising and promoting business brands for profit. The disaster-doco “FYRE: The Greatest Party That Never Happened” tells the sorry story of the exploits of Billy McFarland, the mastermind behind the failed 2017 “luxury music festival” FYRE.

Photo by David Calderón, Unsplash

The festival promised its prospective patrons, for the princely price tag of around US$4000 per head, a stylish non-stop three-day celebration, complete with 5-star cuisine, the hottest live bands around, and the opportunity to rub shoulders with celluloid celebrities like Kendall Jenner and Emily Ratajkowski, all on Pablo Escobar’s former private island, at a remote location in the Bahamas.

To advertise the festival, organisers paid a host of high-profile models and actresses to post photographs and videos of themselves on their private Instagram accounts, partying gaily on the island, which naturally led many of their ardent fans to the conclusion they’d be partying along with their idols at the festival. What everyone failed to mention was these celebrity influencers were being paid for their promotion, and had no intention of turning up to the event. In reality, following the botched efforts of McFarland and co., the FYRE festival turned out to be a complete fizzer, with disgruntled would-be revellers left stranded in the Bahamas sheltering from wild weather in hurricane survival tents, a cancelled roster of musical acts, no electricity and not much more than a few cheese sandwiches to sustain them.

Whilst some cynics have failed to muster much sympathy for ‘young people willing and able to spend $4,000 on tickets to see Blink 182,’ the more thorny legal question that persists is whether social media influencers and brand ambassadors can and should be held responsible for marketing and promoting misleading and deceptive content to the public.

In Australia, the Competition and Consumer Law provides that a person or entity cannot, in trade or commerce, engage in advertising or sales practices that are likely to mislead or deceive consumers, or make false or misleading claims or statements. Although there is no consumer legislation specifically targeting social media pronouncements, there can be little doubt that laws prohibiting businesses from making false, misleading or deceptive claims about their products or services apply equally to social media content.

Similar laws in the U.S have resulted in the FYRE festival and its organisers being hit with a string of lawsuits from the festivalgoers, some seeking damages in excess of 100 million dollars. But many commentators say the net should be more broadly cast, demanding more accountability from the celebs who arguably engaged in misleading and deceptive conduct by failing to disclose to consumers their financial motive for their social media posts.

Meanwhile, the regulators have reacted. In April 2017, the U.S Federal Trade Commission sent out more than 90 letters to Instagram influencers, warning them that certain posts failed to comply with guidelines implemented in 2016, which require users to clearly state when uploaded content contains paid advertisements.  Perhaps as a direct response to the FYRE controversy, Instagram has also rolled out new policies requiring those who receive payment for posting branded content on their story or feed to “provide all necessary disclosures to people using Facebook or Instagram, such as any disclosures needed to indicate the commercial nature of content posted by you.”

In Australia, whilst there is yet to be case law concerning consumers seeking damages against social media influencers for misleading online content, there is an established body of case law relating to false testimonials provided by celebrities. In ACCC v Advanced Medical Institute Pty Ltd, the Court found a company, together with its advertising agent, and a contracted celebrity influencer, guilty of misleading and deceptive conduct for publishing a false testimonial.

By extension, it seems likely that Australian Courts would be prepared to find social media influencers responsible for such conduct in appropriate circumstances. In relatively recent times, the Australian Competition and Consumer Commission (ACCC) released guidelines echoing this approach, confirming that companies and social media influencers owe a duty to disclose any commercial endorsement to third party consumers.

Whilst it remains to be seen whether current Australian consumer legislation can effectively address the sort of ills brought to light by the FYRE Festival, the law undoubtedly continues to adapt, and will no doubt need to do so at an increasing rate, to keep pace with the ever-changing #instaworthy landscape.

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