User-generated content (UGC) – whether it’s posts or images, videos, comments, reviews, blogs or vlogs – is increasingly being used by retailers for marketing purposes. If an individual sees or reads about someone else having a positive experience with the brand’s products or services, they may be encouraged to also buy them. There are, however, some important legal considerations to be aware of.
Marketing rules and regulations
The UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code) applies to non-broadcast advertisements, sales promotions and direct marketing communications, and is enforced by the Advertising Standards Authority (ASA). UGC in itself is not regulated by the CAP Code, but where the retailer “adopts and incorporates” UGC into its own marketing communications, the CAP Code will apply.
“Adopting and incorporating” includes re-posting the content, commenting on a user’s post, and even liking a user’s post. However, where users must actively detect which posts have been liked by the retailer, and where the act of the brand liking the post does not trigger the post to be pushed out to the retailer’s followers or to the original poster’s followers, the liked post is unlikely to be covered by the CAP Code.
Where marketing content does “adopt and incorporate” UGC, the content must comply with the CAP Code and be fair and not materially misleading, harmful or offensive. There are additional rules for marketing communications aimed at children, relating to weight control and slimming, containing health and nutrition claims, and relating to alcoholic beverages.
The use of testimonials in advertisements will also be covered by the CAP Code. Retailers must ensure that testimonials used in advertisements are genuine (and have not been altered or exaggerated or taken out of context) and hold contact details for the authors of such testimonials.
New EU legislation introduced two new blacklisted practices into existing EU legislation as of May 2022:
- stating that reviews have been submitted by customers who have actually used or purchased the product without taking reasonable and proportionate steps to verify that the reviews originate from such customers.
- submitting, or engaging a third party to submit, false customer reviews or endorsements, or misrepresenting customer reviews or endorsements in order to promote products.
Retailers that supply and advertise products to customers in the EU could be subject to regulatory action in the relevant EU countries if they breach national law implementing this EU legislation.
However, this does not apply in the UK. The UK Government has announced its own plans to safeguard consumers by clamping down on fake reviews. The changes to legislation are subject to parliamentary approval, but propose to make it unlawful to:
- commission someone to write or submit a fake review;
- host consumer reviews without taking reasonable steps to confirm they are genuine; and
- offer or advertise to submit, commission or facilitate fake reviews.
Although at this stage these are only proposals, it is best practice for retailers to comply with them.
Intellectual property considerations
Before re-posting UGC, retailers should consider whether there are any intellectual property rights (IPR) protecting the content concerned and if they have the right to use and share that content. The creator of the UGC (i.e. the individual user) may own IPR in the content, but there may also be third party IPR in the content.
- The user’s IPR
Copyright in the UK arises automatically upon the creation of original works (for example a photo, video or song) and is generally owned by whoever creates the works. Copyright gives the owner a right to prevent the work from being copied wholly or to a substantial extent without the owner’s consent. Just because content is posted on a public account for viewing and interacting with (e.g. liked) does not mean that it is now free from copyright protection and can be freely re-posted and shared.
Retailers can implement a UGC policy which includes a licence from the user to the brand of any UGC uploaded to social media platforms which contains reference to or features the brand or its products. However, this policy may not be viewed by users and users may not be aware that by uploading such content to their social media handles they are granting a licence to the brand to re-post and share that content. For certainty, it is always best to get express permission from users to use their content if possible. Use of UGC content by a brand is done to help build its reputation, but this could be undermined if users bring claims for use of content without permission.
2. Third party IPR
An individual’s post on a social media platform that a retailer wishes to re-post could also contain third party IPR, such as background music, or videos or photos not created by the user. Even if the brand has consent from the user to re-post the original post, the user is unlikely to be able to give consent on behalf of the third party to use the third party IPR. The user may not even have the right to use and share the third party IPR in their own posting. The incorporation of third party IPR in re-posts therefore exposes the brand to a potential IPR infringement claim. Where third party IPR is identifiable in a post, such as a song playing in the background, a brand should re-post and share the UGC without the third party IPR.
Data protection
UGC which retailers re-post and share may contain personal information relating to the user who created the original content or a third party (e.g. the user’s or third party’s name and image). In order to process that information (i.e. re-post and share it), the brand must have a lawful basis to do so under the UK GDPR.
Consent is a lawful basis to use personal data, but consent can be withdrawn at any time. An alternative lawful basis is ‘legitimate interests’, providing the brand can demonstrate that the use of the personal information is proportionate, has a minimal privacy impact, and no individuals are likely to be surprised or might object.
As well as having a lawful basis to use data, retailers will need to ensure that use of personal data in UGC is explained in their privacy notice.
Recommendations
When thinking about using UGC, retailers should consider the following:
- review all UGC before re-posting content on brand platforms to ensure it is not misleading.
- take reasonable steps to confirm consumer reviews are genuine before continuing to host them.
- obtain express consent in advance from users in relation to each re-post of UGC on the brand’s social media handle. This is best practice.
- implement a UGC policy which includes a statement that the brand has a licence to re-post and share any content made publicly available on social media platforms which contains reference to and/or features the brand and/or the brand’s products.
- review and update the brand’s privacy notice to include UGC in the types of personal data that may be processed by the brand, including the purposes of the processing and the lawful basis for the processing.
Lauren Beech is an Associate in Commercial Services at Pannone Corporate. Grace Astbury is a Solicitor in Commercial Service.
Further reading from Pannone Corporate
For more legal insight on issues such as copycat claims, sick pay, being cookie compliant and the importance of domain names, click here:
https://modernretail.co.uk/retail-copycat-central-what-can-we-learn/
https://modernretail.co.uk/how-to-manage-sick-pay-for-retailers/
