Social media influencers’ marketing has had a powerful impact on the way consumers perceive and engage with brands. By leveraging personal connection and authenticity, influencers can shape opinions, drive trends and influence purchasing decisions more effectively than traditional advertising.

Influencer advertising is powerful because it merges the personal touch of social connection with the persuasive force of marketing, allowing brands to reach audiences in authentic and engaging ways. Their ability to communicate directly with followers creates a sense of trust and relatability, making promotions feel more genuine and persuasive. This has allowed businesses, especially smaller brands, to reach highly targeted audiences at relatively low cost.

However, the rise of influencer marketing has also blurred the line between personal recommendation and paid promotion, raising concerns about transparency, ethics, and consumer manipulation.

Recently, the rise of fraud, scams, promotion of unregulated or illegal offers, deep-fakes, and identity misuse in the fraudulent advertising of influencer marketing has resulted in significant financial losses for consumers, damaged brand reputations, and eroded public trust in online marketing and social media platforms.

Consumer Protection Act

Despite the lack of clear regulations specifically governing social media influencers and the limited accountability of online platforms, issues such as misleading or deceptive conduct, false representation and unfair practices are regulated under the Consumer Protection Act 1999.

Under Part II of the Consumer Protection Act 1999, several sections govern these practices: Section 9 governs misleading conduct, Section 10 addresses false and misleading representation, Section 12 concerns misleading indication as to price, Section 13 covers bait advertising, Section 14 relates to gifts, prizes, free offers and etc., Section 15 pertains to claims that goods are limited, Section 16 handles demanding or accepting payment without intending to supply and Section 17 addresses future services contracts.

Besides that, under Section 18 of the Consumer Protection Act 1999, it is a presumed liability that conduct or representation in relation to any goods or services made or published in an advertisement shall be deemed to have been made by (a) the person who directly or indirectly claims to supply the goods or services; (b) the person on whose behalf the advertisement is made; or (c) both of them.

Basically, no person in Malaysia shall engage in misleading or deceptive conduct, false representation, and unfair practices, and doing so is an offence under Section 25 of the Consumer Protection Act 1999.

Section 25 of the Consumer Protection Act 1999 provides that any person who engages in misleading or deceptive conduct, false representation and unfair practices commits an offence. If the person is a corporate body, Section 25(1)(a) provides that the person committed shall, on conviction, be liable to a fine not exceeding RM250,000, and for a second and subsequent offence, to a fine not exceeding RM500,000.

For an individual who engages in misleading or deceptive conduct, false representation, and unfair practices, they shall be liable to a fine not exceeding RM100,000 or to imprisonment for a term not exceeding three years or to both, and for a subsequent offence, to a fine not exceeding RM250,000 or to imprisonment for a term not exceeding six years or both under Section 25(1)(b).

Lack of enforcement

The Act clearly covers social media influencers’ marketing, but there is a lack of enforcement from the Ministry of Domestic Trade and Cost of Living (KPDN), which has resulted in minimal oversight, weak deterrence against unethical practices, and continued misuse of influencer platforms for misleading or deceptive promotions.

Despite KPDN receiving 2,608 complaints in 2023 for misleading advertising and 1,281 complaints in 2022, there is still no one who has been convicted under the relevant sections of the Consumer Protection Act 1999.

While the Bukit Aman Criminal Investigation Department and the Communications and Multimedia Commission (MCMC) face challenges in their enforcement, coordinated enforcement efforts led by the Ministry of Domestic Trade and Cost of Living (KPDN) should be prioritised to safeguard Malaysian consumers.

-- BERNAMA

Dr Ong Tze Chin (tzechinong@um.edu.my) is Senior Lecturer at the Faculty of Law, Universiti Malaya.