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The future of social influence?

What do these three pictures have in common?

These pictures show influencers that are not human, but virtual. Virtual influencers are created through computer-generated imagery (hereinafter: CGI). As these influencers can take the shape of anyone, anytime and anywhere, they constitute a powerful new tool of influencer marketing.[1]

By posting pictures and Instagram stories to represent their virtual world, virtual influencers are comparable to human influencers. They wear the same clothes, eat the same food, and have the same interests. However, unlike human influencers, virtual influencers do not gain weight or get older, unless it is desired by their creator. Furthermore, virtual influencers’ behavior can be predetermined thus limiting the risk of controversial and embarrassing appearances. For followers, this creates an online experience that is nearly interchangeable with their offline reality. For brands, this opens the door for creative partnerships through inventive storytelling which can be heavily controlled. For the law, this raises the question of how advertising activities by virtual influencers shall be regulated.[2]

Undoubtedly, social media nowadays play a very important role in modern marketing. Consumers’ purchasing decisions are shaped by the content of their favorite influencers. To ensure fairness, transparency, and accountability, disclosure requirements have been adopted in several jurisdictions. These disclosure requirements certainly apply to human influencers, but what about virtual influencers?[3]

In the USA, the Federal Trade Commission’s Endorsement Guides provide instructions on how influencers and brands should disclose their partnerships to prevent fraudulent, deceptive, and unfair business practices. Accordingly, when there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement, such a connection must be fully disclosed. Such a disclosure needs to be presented in a way that is easily noticed and understood by the followers.[4] An FTC spokesperson stated that “the FTC does not have specific guidance on CGI influencers, but advertisers using CGI influencer posts should ensure that the posts are clearly identifiable as advertising.” It follows that virtual influencers shall be bound by the FTC’s Endorsement Guides even though no specific reference to virtual influencers is made. This leaves room for legal loopholes.[5]

India adopts a different approach. In July 2021, the Advertising Standards Council of India (ASCI) published a set of guidelines for virtual influencers and brand sponsorships (“Guidelines for Influencer Advertising in Digital Media”). These guidelines, which are India’s equivalent to the American FTC Endorsement Guides, aim to inform consumers as to when a virtual influencer receives remuneration for the created content.[6] 

The guidelines define virtual influencers as functional computer-generated “people” or avatars who have realistic characteristics, features and personalities of humans, and behave in a similar manner as influencers. They require the creators behind virtual influencers to expose paid partnerships to their followers using easily identifiable disclosures. Furthermore, the guidelines state that it must be revealed to followers that they are not interacting with a real human being. This “virtual” disclosure is important to avoid followers mistaking a virtual influencer as a human being. According to the ASCI guidelines, part of the disclosure responsibility lies with the advertiser – not just the virtual influencer. Also, the advertising party has the executive power to tell virtual influencers to edit or delete advertisements if they do not follow the guidelines.[7]

With the introduction of specific guidelines for virtual influencers, India has set an example of how the legal uncertainties relating to the liability of this new category of influencers can be regulated. Will other countries, like the USA, follow India’s example?

[1] https://influencermatchmaker.co.uk/blog/virtual-influencers-what-are-they-how-do-they-work

[2] https://observer.com/2021/05/meet-lu-the-non-human-influencer-with-25-million-followers/

[3] https://www.dentons.com/en/insights/articles/2019/june/28/another-surprising-ai-application-virtual-influencers

[4] https://www.ftc.gov/system/files/documents/plain-language/1001a-influencer-guide-508_1.pdf

[5] https://www.robinskaplan.com/resources/publications/2019/09/pixel-perfect-the-legal-implications-of-virtual-influencers-and-supermodels

[6] https://www.virtualhumans.org/article/official-india-moves-to-regulate-virtual-influencers[7] https://asci.social/guidelines

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