Social media has changed the way we promote and market goods and services. They changed not only the way goods and services were exchanged, but also the way of advertising, moving from content developed through radio, television, and journalism, to a new form of advertising created by “content creators,” known as “influencers.”
They use their social networks to promote certain goods and services among their followers, usually for an economic return, either through cash payment, or by in-kind payment for the goods and services they promote. Its role cannot be freely developed, but it must adhere to Costa Rica’s regulatory framework.
We start from a crucial fact: This new paradigm in the promotion and marketing of goods and services is governed by the provisions of the Promotion of Competition and Effective Consumer Protection (Law 7472) and its regulations. Article 245 of this regulation (stated in Chapter X, which specifically regulates electronic commerce) states that the provisions of the said chapter will govern the relationships between merchants and consumers, within the scope of e-commerce, without prejudice to other consumer protection regulations. Meaning that within the framework of e-commerce development in Costa Rica, all consumer protection regulations apply.
This includes, unequivocally, the production of content by “influencers”, not only because of this explicit incorporation into the law, but also because they receive a financial benefit, either directly or indirectly. They become part of the supply chain.
In this regard, there are two important areas. First: The so-called “gifts” or “withdrawals” must be made in accordance with the requirements of Law No. 7472 and its executive regulations. In particular, the person who is aware of the promotion must first determine the basic conditions for the participation of consumers and the selection of the winner, providing, at a minimum, the duration, the object, the limitations of participation, the procedure for claiming the prize, the date and form of the fee for the selection of the winner, which in all cases must be made before a notary. This is to ensure objectivity and impartiality in selecting the winner. This information is normally provided by bylaws.
Second, advertising is targeted at consumers. Without pretending to be exhaustive in this section, we must start from the fact that everyone who advertises goods and services must provide clear and accurate information regarding the elements that directly influence the consumer’s decision. In this regard, hidden, defamatory, false and offensive advertising, or statements and presentations that may lead to consumer confusion, should be avoided. Other advertising regulations, such as comparative advertising, can be discussed later.
Provisions regarding the use of testimonials and endorsements become particularly relevant to influencers. Advertisements may use testimonials and endorsements of the advertised product if they are authentic, verifiable and based on prior experience or knowledge of the person making the statement. This obliges them to verify the quality and functionality of the advertised item in order to legally recommend its purchase.
In these two points (giveaways and advertising), serious shortcomings were noted and discovered in the development of content by most of the “influencers”. From the lack of clarity in reporting the terms and conditions for achieving promotions, to the lack of a notary in realizing such withdrawals is indicative of a serious lack of knowledge of the applicable legal system, which directly affects the consumer. To mitigate these shortcomings, the Ministry of Economy, Industry and Trade has published a guide targeting “influencers” on social networks. The document, which is for guidance only, suggests a series of considerations to keep in mind when sharing their posts. Such considerations or “good practices” include, for example, the requirement that the consumer be aware of a financial relationship between the merchant and the “influencer,” advertising modification, by conveying verifiable information, and the obligation not to mislead the consumer by making false claims about the product. .
The above evidence does not constitute a legal or punitive document; However, it refers to the legislation applicable to each country of the FIAGC. Thus, in Costa Rica, the activity of “influencers” in social networks is governed by the regulations of Law No. 7472 and its bylaws. This includes them within the framework of joint and several responsibility applicable in consumer affairs, according to Article 35 of Law 7472. Therefore, penalties of between one and forty times the minimum monthly wage (Article 57 of Law 7472) can be applied.
In conclusion, the participation of “influencers” in commerce should aim to provide true and accurate information to consumers. In the event of non-compliance, they will be subject to various procedures and penalties prescribed by law. To achieve this goal, influencers must realize that they are part of the consumer chain and therefore seek corresponding legal advice, since only those who can prove that they are not responsible for any breach or damage resulting from liability can be excused.