Influencer marketing is a valuable tool for brands. By 2024, brands are expected to spend US$ 32 billion on advertising via influencers. Through its use, target audiences can be reached and engaged at a level that was not previously possible. However, the ‘wild west’ days of influencer marketing are over and levels of regulation and public scrutiny are on the rise not only in the United Arab Emirates (UAE) but globally. As a result, it is becoming increasingly important that brands actively mitigate potential legal and reputational damage when engaging influencers for their marketing campaigns. Below we discuss the UAE’s rapidly developing regulatory landscape in this area and what brands need consider when working with influencers. 

Do your Due Diligence

One of the key ways brands can minimise some of the risks associated with influencer marketing is to carry out comprehensive due diligence before engaging in any contractual arrangement or public relationship. Not every influencer will be the right fit for a product or brand and failing to complete adequate due diligence into an influencer’s background will leave brands exposed. One of the primary areas of concern is the possibility of problematic content resurfacing from an influencer’s past. This could take the form of old tweets, posts, photos, videos or interviews. When scandalous in nature, these have the potential to not only derail a campaign but also inflict long-term commercial and reputational damage on associated brands. 

By looking closely into an influencer’s history and earlier content, brands can ‘weed out’ any red flags and protect themselves from unfortunate gossip and headlines. Often, more than a simple Google search will be required and brands are frequently opting to outsource this task to ensure that nothing is over-looked. However, regardless of how thorough the research is, brands should still ensure that they have sufficient contractual language to allow them to exit a relationship that turns sour. 

Consider the Contract  

When working with influencers, the underlying legal agreements are critical as they are the blueprints that can be relied upon if things go awry. Such agreements should set out the commercial and legal basis of any influencer marketing campaign and detail the obligations of the brand, agency and influencer. They should also contain a clear definition of the scope and terms on which the influencer provides the marketing services to the brand, whether acting with the brand directly or through an agency or platform. 

What should be included in an influencer marketing contract? 

As in other jurisdictions, influencer marketing contracts in the UAE should include the following key points:

• Social Media Guidelines: A good way to clarify brand values is to make sure that there are social media usage guidelines in place. These guidelines may be separate to the contract but should be available for reference.  
• Termination Rights:  As noted, having an exit provision for brands is essential as it offers a safeguard if an influencer or their agency violate core brand principles stated in the social media guidelines.
• Ethical Commitments: Influencers often have their own products that they sell and market in parallel to other advertising work that they take on. As a means of mitigating any potential issues arising from this, brands should consider using ethical commitment agreements as a precautionary measure to ensure that influencers are faithful to the brand’s image and values in the long-term and do not market or produce any other products that could be problematic. These agreements can be linked to termination provisions to ensure that if the clause is triggered, brands will also have the ability to require influencers to remove any content that they have produced relating to the brand. These clauses are useful when influencers violate their ethical commitments and the brand needs to publically disassociate from actions taken by an influencer.
• Data Protection: Data protection agreements stem from increased data protection regulation globally and are particularly relevant to companies who may also have General Data Protection Regulation (GDPR) obligations in other jurisdictions and are subsequently vulnerable to significant fines for violations. Due to the need for analytics and user engagement data in influencer marketing, information is shared frequently. Brands need to be aware that processing a person’s personal data for their own marketing purposes is unlikely to be permitted under a platform’s standard terms. They will therefore need to consider ways to work around this issue. A common solution is to anonymise data. 
• Creative Control: Brands need to determine who has creative control over the posts and content generated from the relationship. This is typically achieved through the inclusion of an assignment or license clause. Assignments transfer ownership in intellectual property rights and allow brands to obtain a full buy-out of the content produced. Assignments and the transfer of moral rights can be tricky to implement in the UAE. Generally, the more detailed an assignment clause is, the higher the chances that it can be successfully enforced. Licenses, however, do not transfer ownership but grant permission to use a particular right. These are useful when an influencer does not want to give up their ownership of the content. Additionally, implementing an approvals process is worthwhile for brands seeking editorial control. This will allow captions, photos and videos to be screened before being uploaded. 
• Copyright Issues: Lastly, brands should have a framework in place to monitor and regulate an influencer’s use of intellectual property that they do not own or may be owned by third parties working with the influencer (such as photographers or videographers). While the possibility of a brand being held liable for unauthorised use by an influencer varies, brands need to be aware that the risk exists due to the ability of internet content spreading to numerous jurisdictions. To assist with mitigation, brands should allocate responsibility for noncompliance to the influencer and consider requiring written permission from third parties for any use of their intellectual property. 

Pay Attention to Rules and Regulations

It is worth noting that while some influencers will have management and access to legal advice, many will not. Consequently, influencers cannot be relied upon to be aware of relevant regulations that may apply to their services or the content they produce. Therefore, it is up to brands to take a leading role in ensuring that the influencers they work with are aware of and abide by applicable laws.

Social Media Disclosures 

An issue often raised in relation to the use of influencer advertising is that it is misleading to the public. Brands and their influencers work hard to ensure that the public perceives the messaging that is put out in an organic way. This can be legally problematic and confusing for consumers if they cannot differentiate between advertisements and an influencer’s unpaid content. In response, multiple countries have taken various steps to address this issue by requiring the disclosure of advertised and sponsored content. This is typically done through the use of hashtags and integrated photo text. 

The monitoring of social media disclosures in the UAE is likely to increase given the steady stream of influencer-related regulation that has already been promulgated. The UAE Media Council, previously the National Media Council which was part of the Ministry of Culture and Youth, provides an extensive guide that sets out standards that influencers and companies should follow. These guidelines prohibit the advertisement of alcohol, smoking and/or gambling products and require that prior approval is obtained for advertisements related to medicine, energy drinks, real estate, universities, educational institutions, nurseries, and Hajj and Umrah services. The guidelines also set out requirements for the use of hashtags to notify consumers that the post or video is a paid advertisement.

Although these are guidelines, as opposed to law, infringements by companies or their associated influencers are subject to financial penalties. Consequently, it is prudent to monitor influencers and their posts closely to ensure that the content is compliant with these guidelines. 

Licences and Tax

The UAE requires that influencers maintain a license if they publish paid ads on their accounts. Additionally, the Federal Tax Authority (FTA) announced that services provided by influencers for consideration are subject to value added tax (VAT) if that consideration exceeds AED 375,000 annually. Taxable services include promoting a product or business in a blog, video or social media post, physical appearances for marketing purposes, and providing access to an influencer's network on social media.  Significantly, these regulations are applicable non-resident influencers as well who make any taxable supplies in the UAE. Brands should ensure that they only work with influencers who adhere to these regulations to avoid unwanted publicity and/or regulatory fines. 

Summary

The use of influencers to market brands and products has permanently altered advertising with its ability to reach audiences on a global level using tailored methods. However, the broad reach of influencer content makes brands subject to variable legal and regulatory requirements and the possibility of liability for misconduct. Given this threat, brands should err on the side of caution and use clear, robust contracts that offer protection from legal repercussions if their influencer goes rogue. Insisting on the use of contracts and compliance with brand guidelines ensures that brands can mitigate the risks while enjoying the benefits of influencer marketing.