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The use of Celebrities and Influencers for advertisement is the new marketing strategy by a series of companies, organizations, and individuals. Influencers used for advertisements are usually celebrities with large followings and social media impacts. This seems an easy way to get recommendations on applications like Instagram and other social media platforms. The problem however is that most of the products endorsed by these celebrities are not usually used by them and are sometimes harmful to consumers. This raises the question of whether or not celebrities are legally liable for products endorsed by them.
Liability is a general phrase in law that encompasses nearly all forms of obligations, liabilities, debts, responsibilities, and risks that result from torts, statutes, contracts, or other legal agreements[i].
According to Nigerian law, liability is the duty or responsibility of a person or organization to make up for losses, damages, or other harms that resulted from their carelessness, negligence, or other conduct [ii]. A number of legal doctrines, such as contract law, tort law, and statutory restrictions, can give rise to liability[iii].
The highest federal competition regulator in Nigeria is the Federal Competition and Consumer Protection Commission (FCCPC). Under the Federal Ministry of Trade and Investment, the FCCPC is in charge of fostering consumer protection and preserving market competitiveness. The Federal Competition and Consumer Protection Act was signed into law by President Muhammadu Buhari in 2019, establishing the agency.
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The agency’s goals are to safeguard the rights of all Nigerian consumers and enable easy access to safe products for all citizens while also developing and promoting competitive, efficient, and fair markets in the country’s economy. While some celebrity-endorsed products are risk-free and worthwhile purchases, there is a chance that schemes and inferior products may be falsely represented as legitimate. Presumably, the success or failure of the product is an “after-effect” and the buyers’ freedom of choice is influenced by their perceptions of the celebrity.
Companies use celebrity endorsements to market their products and raise brand awareness; in exchange, the celebrities receive a substantial payment. As a result, celebrity endorsements have become a standard practice in the advertising industry. Celebrities have the power to influence public perceptions and fashion trends through their acts, making them “tastemakers” in this sense[iv]. To that extent, they are revered as icons. According to Nwokah and Nwulu, once a customer believes that a celebrity’s physical appeal, credibility, and fit with the product are favorable, the customer is “inertly being influenced” to enjoy, prefer, and buy a product[v].
Additionally, it has become notable to reveal that celebrities in Nigeria sometimes promote Ponzi investment schemes that have the ability to fool the public into incurring significant financial and other losses[vi]. The media has picked up on several complaints and protests by impacted residents directed towards Nigerian celebrities. An online investment scam called “Racksterli,” for example was endorsed by several Nigerian celebrities and as a result of this endorsement attracted hundreds of investors with the promise of 40–50% profits. The scheme crashed not long after unsuspecting fans invested in it.
Endorsement contracts may however exclude celebrities from liability[vii]. Contractual terms specify the extent, limitations, and rights, and obligations of the contractual parties. In this way, the terms in celebrity endorsement contracts serve a variety of contractual and legal functions[viii]. It is important to highlight that “the company that owns the product and the celebrity who promotes it” are the parties to an endorsement contract because of ideas about the privity of the contract.
Important contractual provisions known as exclusion or limitation clauses define the existence and extent of each party’s rights and responsibilities, respectively, and operate as instruments for allocating risk. The exclusion clause is the one that has the most detrimental effect on liabilities overall.
Nigerian consumers are granted several rights under the FCCPA[ix], including the following:
Any infringement on the aforementioned rights will result in the celebrity endorser being held accountable for misleading and deceptive advertising. These legal rights are inalienable and cannot be used against consumers by anyone, not even famous people.
True depiction in advertising and product conformance to vendor statements are strongly encouraged by the FCCPA, which is well-known for its explicit regulations. Specifically, “a producer, importer, distributor, retailer, trader, or service provider shall not make any false representation to a consumer in a manner that is likely to imply any false or incorrect representation concerning those goods,”[x].
In conclusion, a celebrity may be held accountable for careless actions or remarks they make endorsing products that are untrue or deceptive and hurt customers directly. One example of this would be recommending a product without conducting any safety or efficacy checks. Laws are designed to shield customers against deceptive advertising, exaggerated claims, and dangerous goods. People who are harmed by a celebrity’s endorsement may be able to take legal action under these statutes. Nigerian regulatory agencies might also be involved in holding celebrities responsible for deceptive product endorsements or other problems involving customers.
It’s crucial to remember, though, that culpability is usually determined by things like the celebrity’s degree of engagement, knowledge, and purpose. Usually, there should be unmistakable proof that the celebrity’s activities or endorsements are the direct cause of the damage.
[i] Abraham, K.S. and White, G.E., 2021. Rethinking the Development of Modern Tort Liability. BUL Rev., 101, p.1289.
[ii] Olewu, J. and Iboko, C., 2023. Revaluating the Regime of Celebrity Endorsement, Product Liability and Consumer Protection in Nigeria. Product Liability and Consumer Protection in Nigeria (July 16, 2023).
[iii] Abraham, K.S. and White, G.E., 2021. Rethinking the Development of Modern Tort Liability. BUL Rev., 101, p.1289.
[iv] Ahmed, A.H. and Faiq, A.M., 2022. An Investigation into Different Perspectives on the Concept of Celebrity and Celebritized. journal of Language Studies, 5(4, 2), pp.136-147.
[v] Uche, D.B., Otika, U.S. and Eke, C.N., Celebrity Endorsements and Customer Brand Preference in Sports Betting Industry in Nigeria.
[vi] Arop, J., 2023. Examining the Status of Influencers, Celebrities, and Brand Promoters in Ponzi Scheme Propagation under the Investment and Securities Bill 2023. Celebrities, and Brand Promoters in Ponzi Scheme Propagation under the Investment and Securities Bill.
[vii] Lopes, E.L. and Goulart‐da‐Silva, J., 2022. The effect of celebrity endorsement on omission neglect at different levels of skepticism. International Journal of Consumer Studies, 46(3), pp.803-817.
[viii] Groen, M., 2020. Swipe up to subscribe: the law and social media influencers. Tex. Rev. Ent. & Sports L., 21, p.113.
[ix] Eze, U.G. and Ogbonna, O.M., 2021. An Evaluation of the Protection of Nigerian Consumers under the Federal Competition and Consumer Protection Commission Act. IRLJ, 3, p.13.
[x] See section 123(1) of the FCCPA
Written by Grace Eniyandunmo for The Trusted Advisors
Email us: info@cms.trustedadvisorslaw.com