17/11/2015 2:41 PM AEDT | Updated 15/07/2016 12:51 PM AEST

Current Laws And Moral Responsibility Around Social Media Product Endorsements

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Woman using smartphone while shopping

Australian teen model Essena ONeill very publicly 'quit' Instagram in early November after revealing that most of her posts were staged or 'fake' and that she was paid to promote and endorse products through her social media channels.

Her revelation again sparked the debate over whether or not paid endorsements by 'influential' individuals on Instagram and other social media platforms are infact legal, and where the blurry lines are actually drawn.

"A person or business can contravene the ACL (Australian Consumer Law) in circumstances where a person or a business that is paid to promote a product or service does not make it clear to an ordinary consumer that it is a paid for advertisement," ACCC Deputy Chair Dr Michael Schaper told The Huffington Post Australia.

"Failure to disclose to consumers that the promotion (and or testimonial) of the product or service was due to a commercial arrangement can contravene the Australian Consumer Law through misleading by omission," Schaper said.

That may be surprising to some, as many 'content makers' involved in this new media fail to disclose such agreements.

Peggy Kern, Senior Lecturer at the Centre for Positive Psychology, Melbourne Graduate School of Education said that these kind of endorsements have a major impact on young women.

"The things that we focus our attention on, impacts how we see the world and how we see ourselves. Young people are spending considerable amounts of time online, and these images help define what reality is perceived to be, even if it’s a superficially constructed reality," she said.

"The images provide a message about what success looks like. The fact that posts are shared with millions of people makes it seem even more real and legitimate. Those who suffer from low self-esteem and poor body image are particularly vulnerable.

"They see other girls and women seemingly gain instant fame, and think -- 'if I use that, I will be successful too, and maybe then I’ll feel better about myself'. The problem is that they use it and don’t feel better, and it becomes an endless game of chasing after each product, but never content with who they are."

Arguably more concerning than a simple clothing item or fashion label being promoted is the undisclosed endorsement of 'result-driven' products such as beauty products, detox teas, teeth whiteners, waist trainers and supplements.

"This is a particular area of concern. The images are constantly before us -- images of women or girls who look amazing, are famous, seem to have it all. The images offer a comparison -- first reminding you that you are not good enough, and second that you can have it all if you use this product. The images define what the perfect body “should” look like, even if it’s an image created for the screen," Kern said.

"Girls and women alike pursue becoming these images, which when taken to an extreme, can lead to eating disorders and other problems."

"Further, many of these products not only are a waste of money with no outcome, but can be harmful, especially to young, developing girls. For instance, supplements are something that at times are needed to help restore balances in the body, but when taken in excess, can cause physical and mental health issues," Kern said.

Traditional media outlets are legally required to differentiate between editorial and advertisements or advertorials, and with social platforms becoming just as popular as print and digital media (if not more), particularly with the with the younger population, more clarity is desperately needed around paid endorsements.

One such Instagram celebrity pathing the way in terms of transparency is Sydney based model Pia Muehlenbeck. The law graduate and owner of leisurewear brand Slinkii Athletic boasts over 800,000 followers on Instagram. She uses the hashtag #sp on paid endorsements to indicate to her audience that it is a sponsored post.

"I didn’t think anyone would usually hold a bottle of product in a selfie, so I was genuinely surprised when I saw some people didn’t realise that influencers were sometimes paid to post," Muehlenbeck told The Huffington Post Australia.

"With that in mind, it made a lot of sense to just be transparent. I’m not trying to hoodwink people into purchasing certain things, and if a brand doesn’t like me posting their product with the #sp hashtag, well that’s fine by me, I won’t work with them again.

"When you flick through the pages of any beauty magazine, you’ll often see a full page advert that has been designed to look like part of the magazine despite it actually being a full page ad. However, there is always a line of text at the top stating something like ‘this is a paid advertorial’. As digital becomes the defacto medium, I think it’s good to apply the same principles. The concept of influencers is ever evolving, I don’t hide if I’m getting paid to try something or visit a location on my blog, so it makes sense to extend that principle to my social media now too."

PR powerhouse, talent manager and social media influencer in her own right Roxy Jacenko agrees, and has also recently used the #sp hashtag.

"I am happy to be candid and note if I am paid -- but that’s me, I am not smoke and mirrors, if you ask me, I'll tell you! Given everyone has an opinion on paid posts right now, I'm happy to put my hand up and say [a post] is sponsored," Jacenko told The Huffington Post Australia.

"I will only ever post products, brands, services that I actually use and enjoy. I think this is key -- if I don’t like the product or service and would never use it -- then I choose not to post. Everyone’s different, but that’s my take," Jacenko said.

Muehlenbeck adds: "It’s important to remember that you are actually encouraging people to make a purchase, so having integrity and believing in the product you are sharing is of utmost importance."

Instagram and other social media sites offer a way that we can share our lives with one another, connecting in ways that were never before possible. Such spaces becoming commercialised was inevitable, so it is up to those influential social publishers to ethically shape the new media.

"We need to keep educating our young people how to use and think about social media, reminding them that endorsements are created specifically to manipulate them, and do not reflect reality," Kern said. Also we need to think about how we can be putting more positive messages out there, focused on accepting ourselves and others as we are."