From Oct. 1, Japan will regulate stealth marketing in which influencers or others are paid to promote products and services to their followers without disclosing a financial interest, the government said Tuesday.
The Consumer Affairs Agency has added stealth marketing within the definition of "improper representation," an activity banned under the law against unjustifiable premiums and misleading representations.
At present, there is no legal provision in Japan that directly addresses stealth marketing. With this change, companies will be warned, named and shamed, and possibly more if found to be in breach.
The change comes amid growing concern that marketing of products and services without disclosure stops consumers from being able to make informed purchasing decisions.
According to the agency, marketing methods subject to the regulation are those that are difficult for consumers to identify as advertising or paid promotion.
The regulation targets the companies and not the influencers or others who were paid for social media promotion, it said.
The agency aims to determine whether social media posts are advertising or promotion by looking at the involvement of the company, including whether it instructed the promoters to make certain posts or asks them to confirm they have fulfilled a requirement to post.
When those paid to promote products or services do so without direct instruction from the company, the agency will investigate exchanges and past relationships between the company and those making the posts to determine whether there have been violations.
The agency's panel of experts on consumer affairs released a report in December last year proposing legal regulation of stealth marketing.