Call anytime+234 810 159 9159
In this digitalized era, there have been changes in the ways products and services are advertised. Companies, Startups, and Brands now use celebrities as ambassadors because they hope that the reputation and influence of these celebrities will increase their target market. This reputation is also passed to the products or services endorsed by popular celebrities, and the company is, in turn, patronized by their followers or fans.
Endorsement by celebrities is a form of advertising, campaign, or marketing strategy used by brands and companies to promote their products and services. They also use their influence to make positive impact on the service and awareness about the products. These celebrities are referred to as either influencers or brand influencers.
They play a crucial role in generating awareness for the brands and also influencing consumer choices. They are perceived as bridging the gap between brands and consumers. They create a strong and relatable emotional bond with consumers with their social status. The importance of celebrity influencing was greatly in use during the Covid-19 pandemic when everywhere was on lockdown. Celebrities use their social media platforms to advertise products and services, and their followers and fans, in turn, patronize the brands. Celebrity endorsement is increasingly being employed across various industries regardless of the product type.
The marketing and advertising industry has grown into an organized industry that uses innovative ideas designed to engage viewers and also bond with the public.
Is a celebrity ambassador liable in case of breach of a product or service?
In Nigeria, the Federal Competition and Consumer Protection Commission (FCCPC) is to protect the interest of Nigerians who patronize business owners and companies in Nigeria. Some businesses promoted on social media by certain celebrities sometimes turn out to be fraudulent, and thus, many consumers lose their money.
Currently, there is no existing detailed law that regulate improper and misleading celebrity advertisement. The Advertising Regulatory Council of Nigeria (ARCON) provides certain guidelines for Advertisement in Nigeria. There should be a clear contract between the celebrity and the brand; the relationship and expectations should be stated through the contract, and most of the time, does not put any liability on the endorser which is the celebrity.[i]
The veracity of the claims made by the celebrities with respect to the endorsed products is immaterial, and the endorsers are free to make any claim/statement as suggested by the producers notwithstanding the fact that the endorsers may not have used the product as claimed in the advertisement.[ii]
The celebrity’s role is that of a mere medium of transmission of information, and not the manufacturer of the product. If the celebrity’s liability is limited through his contract, the liability for misleading or deceiving advertisements will fall on the manufacturer of the product or the service delivery. This explains the need for celebrities to ensure that they have properly drafted legal contracts to protect them before engaging in any endorsement activity or deal.[iii]
However, an exclusion clause in the endorsement contract does not automatically limit or exclude the celebrity’s liability for fraudulent advertisement in all cases. If the celebrity will be entitled to part of the brand’s profit as a result of the deceptive marketing, the celebrity will be held responsible. An exclusion clause would, therefore, not avail a celebrity who has gone beyond the traditional role of a brand influencer by participating in profit sharing.[iv]
Celebrities also owe a duty of diligence to their fans, followers, and the public. They are to conduct proper searches on the truth of the claim of the product or services by the brand in order to protect and safeguard the interests of the consumers. In some jurisdictions, celebrities may be liable for statements made in the course of their endorsements, notwithstanding that they were reading from a script prepared by the manufacturer of the product or service owner.[v] This, therefore, imposes a duty on the celebrity to carry out independent investigations of their own before endorsing such products.
Also, celebrities may expose themselves to liability when they continue to engage in influencing activities despite receiving complaints or negative feedback from numerous consumers. Celebrities need to be alert to consumer reviews arising from their endorsement.
Section 17 of the Federal Competition and Consumer Protection Act,[vi] provides that the Commission will review economic activities in Nigeria to identify anti-competitive, anti-consumer protection and restrictive practices which may adversely affect the economic interest of consumers and also eliminate anti-competitive agreements, misleading unfair, deceptive or unconscionable marketing trading and business practices.
Hence, where a celebrity engages in deceptive and misleading endorsement, the FCCPC can exercise its regulatory and disciplinary jurisdiction over both the manufacturer/service owner and the celebrity engaging in the endorsement because the endorsement itself is a marketing practice. Therefore, celebrity endorsement deals should not be taken lightly by both parties as an oversight on either part can lead to dire consequences for both the manufacturer/service provider on the one hand and the celebrity on the other hand. Celebrities can also include indemnity provisions in the contract to cover the potential penalties and legal costs that may be incurred.
Before a celebrity can be held liable for misinformation, it must be proved that the celebrity was a direct participant in the deceptive advertisement and he intentionally made false statements to promote the products.
Recommendations
The Federal Competition and Consumer Protection Commission (FCCPC) and the Advertising Regulatory Council of Nigeria (ARCON) should make regulations to regulate or guidelines to guide the activities of these celebrities and influencers and provide for when they can be liable. Also, they should provide remedies for the consumers that buy the product as a result of the celebrities’ advertisements.
This measure will make celebrities or influencers to be more prudent when deciding the goods to endorse and also the safety of the people.
If there are laws in place, it would make celebrities more responsible when accepting brand endorsements. They will do their due diligence on the products or services they are endorsing. Under the Nigerian Criminal and Penal Codes, whoever induces another to do what they would not have willfully done is said to have committed cheating if such inducement results in the loss of pecuniary or proprietary rights.[vii]
Thus, while there are laws in place to protect consumers, such laws relating to misleading advertisements are in their infancy, as none define the extent of the celebrity’s liability in a case where they endorse defective goods.
Conclusion
In conclusion, the law regulating advertisement in Nigeria is not encompassing as it does not define celebrities’ or influencers’ liability where they endorse ineffective goods.
Celebrities are thus advised to include in their endorsement contract indemnity clauses to third parties by the brands to avoid legal liability by ensuring that liability. Also, the celebrity can put an exclusion clause in the contract to exclude the celebrity from liability.
The use of an exclusion/limitation clause in an endorsement contract will serve to protect the reputation and integrity of a celebrity and consequently deter any potential damage to their persona resulting from the endorsement of a defective good.[viii] The essence of this clause will further serve as a vital tool and exemption in allocating the risk of contracts between the parties to ensure that the celebrity is not held liable for any defect suffered by the customer over the use of the product or services endorsed.
[i] https://businessday.ng/opinion/article/liability-of-celebrities-that-engage-in-business-promotion/
[ii] https://lawpavilion.com/blog/liability-of-celebrities-that-engage-in-business-promotion/
[iii] https://guardian.ng/life/the-legal-implications-of-celebrity-endorsements/
[iv] https://guardian.ng/life/the-legal-implications-of-celebrity-endorsements/
[v] https://lawpavilion.com/blog/liability-of-celebrities-that-engage-in-business-promotion/
[vi] Federal Competition and Consumer Protection Act 2018
[vii] https://spaajibade.com/celebrity-liability-for-the-endorsement-of-defective-products/
[viii] https://lawpavilion.com/blog/liability-of-celebrities-that-engage-in-business-promotion/
Written by Omolumo Adeife for The Trusted Advisors
Email us: info@cms.trustedadvisorslaw.com