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Abstract

Court decisions in Germany tend to draw little media interest, but an exception to this comes in the form of decisions relating to disclosure obligations on social media, such as the recent case involving Cathy Hummels. Due to enforcement issues and the paucity of damages awarded to individual and companies, there is a significant lack of literature on this field of law. As a consequence, this study, which compares the U.S. and Germany while also proposing how, exactly, the law needs to change, is unique. Hardly any other area of law is home to this much ambiguity that affects such a large number of people, and as a result, the present legal situation cannot be allowed to continue. Neither advertisers, influencers, nor social media platforms know what, and in particular, how, they are supposed to disclose their connections to companies, nor do social media users know what they can expect from posts they see on the internet. After an overview of the entire field, a comparison between the German system and the U.S. system, with its larger market, reveals that American law suffers from similar gaps as German law. The most pressing issues are that, in Germany, it is not clear when disclosure needs to be made, while the extent of a disclosure needs to be clarified in both systems. A proposal to balance the freedom of influencers with the risk of misleading social media users is put forward, in a form that would enable it to be added to existing legislation. In both systems, social media platforms would have to provide a visual tool, like a frame or button, which would have to be used by influencers. This would enable social media users to easily distinguish between sponsored content and content that has no connection to an advertiser while scrolling through posts and without having to look at the content of the post itself. In Germany, a definition would be amended to trigger the disclosure obligation only if the post represents a direct commercial benefit for the influencer, such as a paid relationship or the initiation of a contract.

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