Regulators in the U.K. have set a precedent requiring clear disclosure of sponsored posts on social networks and microblogging services.
In July the Office of Fair Trading launched an investigation into the practices of blog network Handpicked Media, following concerns that "individuals engaged by [the company] were publishing online content which promoted the activities of [its] clients, without sufficient disclosures in place to make it clearly identifiable to consumers that the promotions had been paid for."
That investigation closed last month, and according to the OFT the company failed to disclose paid posts on blogs and microblogging services including Twitter, as required by U.K. law. Those requirements have been in place in their current form for all media - online or off - since 2008, but the action taken against Handpicked Media is the first time the OFT has applied the provisions to online activity.
Following the investigation Handpicked Media has signed undertakings to comply with the law and ensure such infringements are not repeated, the OFT said. However a statement issued by the regulatory body suggested other companies operating in the space should take notice of the decision. "The action taken in December 2010 provides clarity and certainty to companies, their marketing departments and advertising agencies on the disclosure requirements that apply in this area," it said.
Due to the global nature of services like Twitter and Facebook, the OFT said it is working closely with the Federal Trade Commission in the U.S. to ensure consistency between the two territories regarding future breaches. The pair have agreed on a "memorandum of understanding."
The OFT has not issued guidelines detailing exactly how disclosures should be presented, but said they "should clearly identify, in a manner prominently displayed with the editorial content such that it would be unavoidable to the average consumer, that the promotion has been paid for or otherwise remunerated."
On Twitter specifically, the body suggested the use of a hashtag to indicate promotional activity.
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Jack Marshall was a staff writer and stats editor for ClickZ News from 2007 until August 2011.