How does the new “Influencer Law” affect your brand?

On May 1st, new legal regulation governing influencer marketing activity in Spain came into effect. Officially known as Royal Decree 444/2024, it has been popularly referred to as the “Influencer Law.”

As always, we marketers excel at creating catchy slogans. Regardless of what you call it, the aim of this initiative is to establish rules in a sector that has been growing exponentially for years without legal regulation. Until now.

Much has been written about this Royal Decree, focusing mainly on the influencer’s point of view: what types of profiles are affected, the implications for them, the fines they may face, etc. But what about the brands’ perspective? If you’re a marketing professional wondering if this regulation affects you and to what extent, keep reading. Spoiler: yes, it will affect you.

What does the Influencer Law include?

Before diving in, let’s look at the context. The first thing to note is that this Royal Decree is not Spain’s first step in regulating influencer marketing. In 2020, we saw the introduction of the so-called ‘Code of Conduct’, which shook up the industry at the time.

So how does this differ with the current regulation? Simple: the first was a recommendation without punitive power. This is a binding law with set penalties. So, it’s serious now.

The Royal Decree develops an article of the General Audiovisual Communication Law (“LGCA”) 13/2022, aiming to regulate the activities of video content creators under the same rules as any other audiovisual media regulated by the LGCA. Essentially, influencer marketing is equated with traditional advertising channels like TV.

The Royal Decree establishes two main obligations for influencers or audiovisual content creators:

1. Register in the State Register of Audiovisual Communication Service Providers before July 2, 2024.
2. Comply with advertising regulations set by the LGCA for any audiovisual medium. This primarily involves:

• • Clearly identifying commercial advertising in content.
  • Classifying advertising content based on recommended age to facilitate parental control.
  • Prohibiting the advertisement of certain products like tobacco or medications and restricting the hours for others like alcohol and gambling (between 1:00 AM and 5:00 AM).

Failure to comply with these points can result in fines ranging from €30,000 to €300,000, similar to those imposed on traditional advertising channels.

Which profiles are affected?

Does this affect any influencer, including micro and nano influencers? The answer is no. Only profiles that meet all of the following criteria are subject to the regulation:

• Earned gross income equal to or greater than €300,000 in the previous year, exclusively from their video content creation activities on platforms.
• Have a significant audience of over 1M followers on a single video platform or 2M in total across all platforms.
• Published more than 24 videos in the previous year.

Creators who do not meet these criteria are exempt from the Royal Decree’s obligations. However, the Code of Conduct still applies to them, requiring clear indication of advertising in any sponsored content (#ad).

But how does this affect your brand?

Now that we’ve analysed the law’s main points, how does it affect brands? The law lacks detailed provisions regarding the responsibilities of brands in ensuring compliance with these obligations.

However, since brands are a fundamental part of influencer marketing, their role cannot be ignored. Brands must legally protect themselves in any campaign involving an influencer by ensuring that the influencers they work with comply with the current law.

This point is more complex than it seems. Verifying some points is relatively straightforward:

• If the influencer has over 1M followers on any social media or 2M across all platforms.
• If they published more than 24 videos in the previous year.
• If they are registered in the State Register of Audiovisual Communication Service Providers (a background check should be standard practice).

You can check the registry using this link and filtering by “UER” in the ‘Provider Type’ section. You’ll find well-known Spanish names like El Rubius or Illo Juan.

However, there’s a problematic point: their income. As a brand, you won’t know an influencer’s annual gross income, orif it exceeds the €300,000 threshold, making them subject to the regulation. Consequently, you can’t verify their obligation to register and comply with the law.

How to protect your brand?

Use conditional clauses in all contracts, stating that you require the influencer to comply with the current legislation in all aspects. If the Royal Decree 444/2024 applies to their specific situation, you are not responsible for any non-compliance on their part. This way, if the influencer fails to meet these obligations, they would be violating the law and their contract with your brand, keeping your brand legally protected.

What does the influencer law overlook?

Regardless of whether you see this regulation as unnecessary or a positive step, it undeniably leaves some gaps:

1. Obligations for other influencers: Micro-influencers play a growing role, and real reach in advertising content is more dependent on algorithms than follower count. What are the obligations for influencers who don’t earn as much or have fewer followers? Can their advertising go unchecked?
2. Obligations and control mechanisms for brands: The law doesn’t adequately address the role of and tools for brands to ensure they work with compliant influencers.
3. Advertising of protected products and services: Digital content has virtually unlimited lifespans, with no control over when and how users interact with it. The law is inconsistent when setting time slots for alcohol and gambling advertisements. Should influencers post Stories (with a 24-hour lifespan) at 1:00 AM and delete them at 5:00 AM? And what about permanent posts on Instagram, TikTok, and YouTube?

The time slot rule suits linear media like TV and radio but is nearly impossible to apply to the digital reality, indicating a deep misunderstanding of digital platforms and influencers by the law’s drafters.

While this is all we have to say for now, we will continue analysing and providing more information in future updates. Stay tuned!