The Ethics and Consumer Protection Aspects of Advertising in Social Media Era
October 7, 2021 10:38 am ||
In 2021, especially after a year into the global pandemic, social media has become an essential part of people’s lives. Recent data has shown the significant growth of social media in the past 12 months. In January 2021, the number of social media users stood at 4.20 billion, which was equivalent to more than 53% of the world’s total population.[i] In Indonesia, there are 170 million social media users.[ii] This number increases by 10 million between 2020 and 2021 and is now equivalent to 61.8% of the total Indonesian population.[iii] That impressive growth, undoubtedly has transformed the actual function of social media itself. Nowadays, social media has also become the instrument to market products or services. As a result, there is a massive change in marketing. Entrepreneurs are not only using the traditional way to advertise their products or services but also are moving to digital marketing to expand their businesses.
Facebook, YouTube, WhatsApp, and Instagram are the most popular social media worldwide, each with more than 1.3 billion users, are potential advertising tools.[iv] These platforms, are proven as effective tools to exceed and support marketing communication. However, it cannot be denied that there are issues surrounding the usage of social media as digital marketing tools. What ethical issues are involved and how does the regulation protect each party entangled in that?
A competitive marketplace is a challenge to maintain a good relationship between the consumers and the business owners, as well as building brand loyalty.[v] For instance, modern society demands companies to behave responsibly and ethically toward their consumers.[vi] Ethics is all about norms and values, a set of standards and ideals, which cannot easily neglect without harming others.[vii] Ethics is one of the major factors to the smooth performance of social media.[viii]
Social media advertising is not exempted from some ethical issues. Firstly, advertisement plays an important role in influencing customer behavior to purchase products or services. To do that, entrepreneurs will place the benefits of using their products or services in the advertisement. Sometimes, the entrepreneurs over exaggerate the product’s benefits[ix], which leads to over-promising and deceptive ads. It will badly affect the consumers’ trust towards the brands, because of the false expectations. Secondly, it is common to experience the excessive repetition of the ads on social media platforms, particularly on YouTube. The volume of information leads to ‘information overload’ and result to more frustrated viewer for seeing the ads over and over.[x] According to research done by Survey Monkey, nearly 3 out of 4 users (74%) think that there are too many ads being displayed in social media and 63% of users find there only a few things being advertised, over and over again.[xi] Out of 12 participants, 9 identified that frequent and repetitive ads would cause annoyance, irritation, boredom, or even discouragement from using certain products or services.[xii] Third, one of the most common ad mistakes is unsuitable or inappropriate ads placement. It is important to know there are teenagers and children who use social media. For instance, a study shows a direct correlation between a kid’s exposure to alcohol advertising and their consumption rate to the alcohol brand.[xiii] Besides that, promotion for unhealthy food products influences the types of food that children prefer, demand, and consume, and even contribute to poor diets and negative health outcomes.[xiv]
Despite the issues mentioned earlier, there are dozens of others problems and questions covering a broad range of topics concerning social media advertising. Following that, it is a must to have it regulated—a legal framework by the government and standard policies by each social media platform. Indonesia has enacted Law No.8/1999 concerning Consumer Protection (“Law No.8/1999”), Law No.19/2016 on the Amendment to Law No.11/2008 on Electronic Information and Transactions (“Law No.19/2016”), and Government Regulation No.71/2019 concerning Organization of Electronic Systems and Transactions (“GR No.71/2019”). In addition, Indonesian Advertising Council has also issued a code of conduct and a code of practices to sets out advertisement guidelines based on ethical principles. Each social media companies also play an important role to set the so-called ‘rule of the game’ of using social media such as Instagram and YouTube Community Guidelines or Facebook Advertising Policies.
However, do all of the regulatory framework and policies protect the users or consumers effectively? A huge amount of issues mentioned earlier are also related to consumer protection aspects. When it comes to protecting the consumers, the existing consumer protection frameworks are difficult to apply, since there are still an unclear liability between entrepreneurs, users, social media platforms, and third parties—endorser or influencer. There are no specific rules of consumer protection from social media advertisements. As mentioned before, the only specific rules are only based on the ethical code which is issued by the advertising council and it is not enough to accommodate the users or consumers right, considering the advertising council has no authority to put penal sanction into force.
The consumer protection regarding social media advertisement is generally regulated in Article 8 (1) point f, Article 9, Article 10, Article 12, Article 13, Article 17, and Article 20 Law 8/1999. There are also some legal issues that arises from social media advertisement. First, according to Article 17 (1) point f Law 8/1999, “Entrepreneurs in the advertising business are prohibited from producing advertisements which violate the ethics and/or legal provisions on advertising” and the consequences of violating that regulation are stipulated in Article 62 (2) Law 8/1999 which are the maximum criminal penalty of 2 years imprisonment or a maximum fine of Rp5.000.000,00. There is no clarity of what kind of ‘ethics’ does the regulation refers to. If the ethics violation substance refers to the ethical code which is issued by Indonesian Advertising Council, as stated before, they do not have the right to stipulate the penal sanctions. Therefore, what is being regulated in Article 17 (1) point f and Article 62 (2) Law 8/1999 creates ambiguity since it is not practically applicable.[xv] Secondarily, the business owner often uses endorsers or influencers in social media to promote their products and services. These people have no responsibility if it is based on Law 8/1999 since it only protects the consumers from entrepreneurs. There is no regulation that clearly mentions the endorser or influencer liability towards the damages to the consumer which are caused by the products or services they advertise. Furthermore, the endorser or influencer can only be sued using Article 1365 BW/Indonesian Civil Code.[xvi] Thus, there are no penal sanctions for endorsers that promote products and services which lead to consumer damage.[xvii] Set aside those two legal issues occurring in the Indonesia’s consumer protection framework, the most important thing is to ensure all of the users are well-aware of bad advertisement placement in social media. It will, certainly, reduce the possibility of receiving such damages caused by that advertisement.
Author: Nadya Olga Aletha
Editor: Sri Handayani Nasution
[i] Simon Kemp. Digital 2021: Global Overview Report. Available at <https://datareportal.com/reports/digital-2021-global-overview-report> [Accessed 17 August 2021]
[ii] Simon Kemp. Digital 2021: Indonesia. Available at <https://datareportal.com/reports/digital-2021-indonesia> [Accessed 17 August 2021]
[iv] Data Reportal. Global Social Media Stats. Available at <https://datareportal.com/social-media-users> [Accessed 17 August 2021]
[v] Jung-Yeong, L. and Jin Chang-Hyun. (2019). The Role of Ethical Marketing Issues in Consumer-Brand Relationship. Sustainability. Vol. 11 No. 23. pp.1. Available at <https://doi.org/10.3390/su11236536> [Accessed 17 August 2021]
[vii] Eagle, P. (2009). Social Marketing Ethics. Report Prepared for the National Social Marketing Centre. pp.5. Avalaible at <https://thensmc.com/resource/social-marketing-ethics> [Accessed 17 August 2021]
[viii] Sharma, G. And Li Baoku. (2012). E-Marketing on Online Social Networks and Ethical Issues. International Journal of Online Marketing. Vol.2. No.4. pp.9. Available at <http://doi.org/10.4018/ijom.2012100101> [Accessed 18 August 2021]
[ix] Iqbal, S. and Danish Ahmed Siddiqui. (2019). The Impact of Deceptive Advertising on Consumer Loyalty: A Case of Telecommunication Industry in Karachi, Pakistan. International Journal of Industrial Marketing. Vol.4 No.1. pp.4. Available at <https://doi.org/10.5296/ijim.v4i1.14607> [Accessed 18 August 2021]
[x] Donellan, J. T. (2016). Effect of Ad Repetition and Relevance in Social Media Advertising. International Journal of Business and Applied Social Science. Vol.2 No.3. pp. 29. Available at <https://ssrn.com/abstract=2940059> [Accessed 18 August 2021]
[xi] Gitlin, J. 74% of People are Tired of Social Media Ads—but They’re Effective. Available at<https://www.surveymonkey.com/curiosity/74-of-people-are-tired-of-social-media-ads-but-theyre-effective/> [Accessed 18 August 2021]
[xii] Dong, K. (2019). Avoiding Personalized Ads on Social Media. Thesis. pp. 45. Available at <https://www.diva-portal.org/smash/get/diva2:1320982/FULLTEXT01.pdf> [Accessed 18 August 2021]
[xiii] Wallace, K. The More Alcohol Ads Kids Seem The More Alcohol They Consume. Available at <https://edition.cnn.com/2016/09/07/health/kids-alcohol-ads-impact-underage-drinking/index.html> [Accessed 18 August 2021]
[xiv] Obesity Policy Coalition. How Unhealthy Food is Marketed to Children Through Digital Media. Policy Brief. pp. 3. Available at <https://www.opc.org.au/downloads/policy-briefs/how-unhealthy-food-is-marketed-to-children-through-digital-media.pdf> [Accessed 18 August 2021]
[xv] Yulianti, F. (2020). Tanggung Jawab Hukum Pelaku Usaha Periklanan atas Produk Iklan yang Melanggar Etika Periklanan. Teaching Resources. pp.18-19. Available at <https://repository.unikom.ac.id/id/eprint/66463> [Accessed 18 August 2021]
[xvi] Pusnawan, I.M.L. (2020). Sanksi Hukum terhadap Endorser yang Mempromosikan Produk Kosmetik Ilegal. Jurnal Kertha Semaya, pp. 1109. Available at <https://ojs.unud.ac.id/index.php/kerthasemaya/article/view/61941> [Accessed 18 August 2021]