A legal storm rages in Belgium about the addresses of influencers, but what about stock-listed companies?

Belgium

Earlier this month, professional influencers rang an alarm about the Belgian administration's intention to impose fines of up to EUR 80,000 on influencers who do not disclose mandatory information about their businesses, such as addresses, over social media. According to the government, influencers provide a service of the information society, which means that they must be transparent to consumers and provide information such as their physical addresses.

Influencers want to avoid this, and they are not alone. Large stock-listed companies rarely disclose information about their businesses when advertising over social media. They consider their posts advertising, which carries no obligation to disclose business information.

The Court of Justice of the EU (CJEU) may eventually be asked to decide whether undertakings, big or small, including professional influencers, must disclose business information when connecting with the public via social media, even if they are advertising and not conducting sales.

In early August, Belgium's online influencers were engulfed in a minor storm when the Federal Public Service Economy informed a number of influencers that they were not complying with legal obligations to provide information on their businesses over social media, such as YouTube, Instagram and Twitter. The influencers allegedly violated the Code of Economic Law and are liable for fines of up to EUR 80,000. The well-known Flemish influencer Nathan "Acid" Vandergunst protested vigorously, voicing disapproval of the requirement that influencers must mention their home addresses. Vandergunst stated that this requirement violated the right to privacy. Various ministers, state secretaries and party leaders also raised their voices in opposition against what they consider inappropriate legislation. In response, the FPS Economy granted influencers an extension until 30 September 2022.

The Code of Economic Law applies to everyone, but if we look at Belgium’s top 20 stock-listed companies, which are almost all active on social media, all but one also failed to meet their legal obligation to provide information on their businesses. Will these major companies also be threatened with fines of EUR 80,000 or even 4% of their annual turnover?

Legally, the case for selling goods and services over the Internet is crystal clear. When influencers sell clothing and similar products over social media, they are engaging in distance selling and special consumer protection rules apply. For example, consumers have the right to withdraw from a purchase within 14 days, so they can try out a product and send it back if necessary. In this situation, the consumer must know who the seller is (and to whom he must contact if there is a problem with the product), which is why the law provides that the "geographical address where the business is established" must be indicated (Article VI.45 §1-3° of the Code of Economic Law). The common sense of this stipulation is clear and no minister or secretary of state has proposed amending this legal provision. Furthermore, the legal provision transposes verbatim the European Directive on Consumer Rights (2011/83/EU), from which Belgium cannot deviate.

Things are different, however, when the influencer does not sell goods or services through social media. In that case, he need not comply with the rules on distance selling, but other rules – with more room for interpretation – apply. The FPS Economy assumes that an influencer is also providing a "service of the information society", and such service providers are required by law to indicate their geographical address too (Article XII.6 §1-2° of the Code of Economic Law, which transposes the European e-commerce directive (2000/31/EC) into Belgian law).

The legal question therefore is whether influencers actually provide "information society services". An information society service is defined as "any service normally provided for remuneration, at a distance, by electronic means and at the inpidual request of a recipient of the service" (Art. I.18-1° Code of Economic Law and Art. 1.1 of EU Directive 2015/1535). Social media companies such as Facebook, Twitter or Instagram, and platforms such as Airbnb or Bol.com, certainly offer services of the information society and must therefore indicate their geographical address.

But do influencers, big or small, fall within the scope of this law because they "usually offer their services for a fee, electronically, at a distance and on inpidual request"?

The answer to this question is negative for those influencers who engage in social media on an occasional, non-professional basis. These influencers are not remunerated professionally and therefore do not provide an information society service. They only give their opinion as citizens, not as entrepreneurs. They do not have a VAT number and need not disclose their home addresses. Their right to privacy is protected.

Professional influencers, on the other hand, are remunerated. The traditional, smaller influencers receive a fee per message or click from the companies whose goods or services they recommend, or they are remunerated indirectly through advertising revenue or free goods or services. Large companies, such as stock-listed companies, are not immediately recognised as influencers because they only use social media to promote their own goods or services, but their posts, nevertheless, constitute information society services and their remuneration lies in the additional sales that they realise.

Large and small companies that operate by electronic means (i.e. via social media on the Internet), at a distance (i.e. not in the same room as the consumer) and at the request of the inpidual (i.e. the consumer views their messages at will) provide information society services and, according to the FPS Economy, must disclose personal information, such as their geographical addresses. Their right to privacy is not absolute and the legislator prefers transparency in the interest of the general public.

How is it then that the FPS Economy is now blaming small influencers for offering information society services without fulfilling the legal information obligations, while large companies that also express themselves via social media and offer information society services are ignored? A brief examination of the use of social media by the top 20 stock-listed companies in Belgium reveals that work remains to be done here. All but four companies use Instagram and YouTube. Only one company mentions its address and company number (Colruyt on its YouTube channel).

Perhaps the assumption that undertakings using social media per se provide information society services, the basis of the FPS Economy position, is incorrect. Perhaps these undertakings are simply advertising, either for themselves or for others. Advertising is not a service and does not require disclosure of an address and a VAT number. There are no disclosure obligations for advertising on radio and TV, in movie theaters or in newspapers and magazines. Hence, why should there be any for advertising on social media?

The position taken by the FPS Economy may have far-reaching consequences, not only for influencers and stock listed companies, but for all forms of Internet advertising. For example, each undertaking that advertises via banners or pop-ups, Google AdWords, or websites (i.e. sites that do not sell products) will have to disclose its address, along with its name, VAT number, etc.

Critics of the FPS Economy's position hope the question will soon be submitted to the CJEU, the highest court for EU law, which will make the final ruling on whether undertakings must disclose their personal data when connecting with the public via social media, even if they are advertising and are not selling anything.

For more information on laws governing Internet advertising in Belgium, contact your usual CMS professional or local CMS expert: