Influencer Agreements
Since social media has turned into a modern mass communication tool, the concepts of advertising and marketing have been brought to a new dimension. Influencers, who promote various products and services by "influencing" their audience through social media, are driving the next generation of advertising activities. Influencers promote a certain product or service with their influence; they are entitled to a fee or a monetary benefit payable by the advertiser, which may be a brand, manufacturer, seller or supplier. In this newsletter article, the legal nature of the influencer contracts executed between influencers and advertisers is evaluated.
Key Features of the Agreement
Parties to the Agreement
The parties to the agreement are an influencer, who undertakes to promote a product or service, and the person who requests the promotion of the product they produce or sell and who advertises through the influencer.
The regulation of the term of “influencer” in Turkish legislation is quite new. Pursuant to Article 4/1/b of the Guideline on Commercial Advertising and Unfair Commercial Practices by Social Media Influencers published on 05.05.2021 by the Advertisement Board that is operating under the Ministry of Commerce, social media influencer is defined as “a person who makes marketing communication in order to provide the sale or leasing of a good or service belonging to them or the advertiser, to inform or persuade the target audience through their social media account.”
On the other hand, the advertiser is defined under Article 4/1/m of the Commercial Advertisement and Unfair Commercial Practices as "the real or legal person who publishes, distributes or otherwise exhibits advertisements in which their company or brand is introduced in order to promote the goods or services produced or marketed by them and to increase sales or to increase brand awareness.”
Subject of the Agreement
The main purpose of the agreement executed between influencers and advertisers is the promotion and marketing of products or services on social media; in return, influencers are entitled to a certain fee or financial benefit. In other words, "it is an agreement under which the influencer undertakes to experience the products or services during the contract and to share their experiences in a mutually agreed manner (video, photo, story) and in a mutually agreed number (three posts per month, etc.) with the company and the company undertakes to pay a price or provide another benefit in the amount and manner agreed between them in return for performing the work.”[1]
In this regard, the basic elements of influencer contracts are:
- product or service promotion,
- promotion on social media, and
- the influencer's entitlement to a fee or financial benefit in return.
Legal Nature and Form of the Agreement
Influencer agreements are synallagmatic agreements. In a synallagmatic agreement, the debt of each party constitutes the equivalent of the debt of the other party.[2] Influencers’ promotional activities and the advertiser's obligation to make payments or provide financial benefits are evaluated within this scope.
Influencer agreements are not subject to any form requirement under Turkish law. In practice, however, they are usually concluded in written form for ease of proof.
Some academics are of the opinion that influencer agreements are in the nature of a "performance agreement."[3] Although influencer agreements have similar features to various performance agreements defined by legislation, they also contain different elements.
Comparison with Similar Performance Agreements
Among the types of performance agreements that are defined in the Turkish Code of Obligations No. 6098 ("TCO"), proxy contracts and contracts of work are most similar to influencer contracts. In this section, influencer contracts will be compared with these performance agreements.
Proxy Contracts
Pursuant to Article 502 of TCO, a proxy contract is an agreement in which the proxy undertakes to perform a job of the principal. According to most academic commentators, the agent does not undertake to achieve a result within the scope of the proxy relationship; however, the agent is obliged to show due care while performing his/her duty.[4] Another important feature of a proxy agreement is that the agent is independent while performing the work entrusted to them.[5] What is meant by independence here is that in the performance of contractual obligations, the proxy is not a part of the business organization of the principal.[6] It should be noted that the independence of the agent is not absolute and that pursuant to Article 505 of TCO, the proxy is obliged to comply with the express instructions of the principal. Another feature of proxy contracts is that the fee is not a mandatory element. Pursuant to Article 502/3 of TCO, the proxy is entitled to a fee, if there is a contract or custom.
Considering the relationship between influencers and advertisers, it is possible to infer that the agreement is more similar to proxy contracts in case the influencers only undertake the promotion of the product or service and do not undertake any sales targets (in other words, any results). The reason for this is that influencer agreements usually involve solely promoting a product or service.
The independence element is also important in terms of influencer contracts. In some contracts, detailed instructions including the emojis and symbols to be included in the text in social media sharing or the time of sharing are given. However, it is possible for this guidance to be evaluated within the scope of the proxy’s right to give instructions. Moreover, the fact that influencers cooperate with many brands and that they are not part of a single brand's business organization also strengthens the independence factor. As a result of the evaluation of all these issues, there are opinions that influencer contracts to be mainly similar to proxy contracts.[7]
Contract of Work
Pursuant to Article 470 of TCO, a contract of work is a contract in which the contractor undertakes to create a work and the employer undertakes to pay a price in return. Similar to proxy contracts, contracts of work are also synallagmatic contracts.[8] There are discussions in the literature regarding the subject of the contract of work. According to the prevailing opinion, the results of an intellectual transaction can be included in the concept of work, as well as things that have material assets.[9]
One of the elements of the contract of work, actually the unique element which distinguishes it from other performance contracts, is the contractor's obligation to achieve a result.[10] What is meant here is the result of producing the work by the contractor within the scope of the contract of work. Lastly, the cost element is an objective element in the contract of work. The contractor needs to earn a fee for the work that they have created.
The fact that influencers make an intellectual effort and produce original content while promoting, raises the possibility that the subject of the contract will be considered a work. However, the biggest difference between influencer contracts and contract of work is the undertaking of results. This is because it is not common in practice for influencers who promote a product or service under a contract to make any commitment to sales success or any other kind of result (i.e. to undertake the result of a performance). In addition, while it is obligatory to have a price in a contract of work, obtaining various benefits instead of a net price in return for the promotional activities within the scope of an influencer contract will also differentiate the contract from the contract of work in terms of its features.
Conclusion
Influencers, although only recently defined in Turkish law, already dominate the modern advertising industry and brand marketing. However, there is not an explicit regulation regarding this commercial activity or the content of influencer agreements. Some commentators have expressed the opinion that influencer agreements are synallagmatic performance contracts. Although influencer agreements have common features with proxy contracts and contracts of work, they also differ from these in various ways. The content of the agreements to be executed between influencers and advertisers depend on various factors, such as the negotiation power of the parties, characteristics of the products or services, and the target audience of the promotion. Therefore, it should be noted that the legal nature of influencer agreements must be evaluated by considering the provisions under the agreement and each unique case.
- Baytan Avkovan, Serenat: “Influencer Sözleşmeleri”, Yargıtay Kararları Işığında Güncel Medeni Hukuk Problemleri Sempozyumu Bildirileri, 8-9 November 2018, İstanbul 2019, p. 84.
- Oğuzman, Kemal / Öz, Turgut: Borçlar Hukuku Genel Hükümler, V. 1, 2016, p. 4.
- Baytan Avkovan, p. 91.
- Oğuzman Kemal /Öz, Turgut: Borçlar Hukuku Genel Hükümler, V. 2, 2016, p. 124.
- Gülenda Atay: Influencer Sözleşmeleri, İstanbul 2021, p. 58.
- Oğuzman / Öz, V. 2, p. 119.
- Atay, p. 62.
- Oğuzman / Öz, V. 2, p. 2.
- Oğuzman / Öz, V. 2, p. 5.
- Baytan Avkovan, p. 111.
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