The Influencer as Commercial Agent: Legal Consequences of Digital Marketing
On 4 March 2024, the Court of Rome delivered a potentially groundbreaking judgment with consequences for digital marketing and the activities of influencers in the European Union, including the Netherlands. In its decision, the court held that influencers who promote products via social media can, under certain circumstances, be classified as commercial agents within the meaning of Article 1742 of the Italian Civil Code (Codice Civile).
Introduction
This article discusses how the court arrived at this qualification, why a judgment in Italy may be relevant in the Netherlands, and what the consequences of the decision may be for collaborations between influencers and their principals.
Today, (online) businesses make extensive use of a modern marketing tool: the influencer and associated influencer marketing. Influencer marketing involves deploying influencers via social media to draw attention to products among their followers. It is an effective way to reach thousands of potential customers at once.
The influencer posts a photo or video of a particular product on their social media channel, often accompanied by a personal discount code: an affiliate link. When the personal discount code or link is used, the influencer receives a fee from the principal. Followers tend to trust influencers and are therefore more likely to purchase a product than they would without influencer marketing.
The consequences of qualification as a Commercial Agent under Dutch law
The European Commercial Agents Directive defines the commercial agent as the intermediary who is permanently entrusted with the negotiation of contracts for another party: the principal. The Directive has been implemented in the national law of every Member State. In the Netherlands, this is set out in Article 7:428 section 1 and subsequent articles of the Dutch Civil Code. The agent is an independent intermediary who negotiates on behalf of the principal in the conclusion of contracts, for remuneration, and acts for the account and risk of the principal, with a certain degree of continuity in the agency relationship.
If a collaboration between a business and an influencer meets the conditions for an agency relationship, then (if the aforementioned Italian judgment is followed) the statutory regime for commercial agents applies to that relationship. The influencer is then protected by a number of mandatory provisions of agency law, from which contractual deviation is not permitted. These include, among others, a reasonable notice period, a customer compensation that can amount to up to one year’s commission (Article 7:442 of the Dutch Civil Code), and compensation for irregular termination. If the Netherlands follows this approach, it could lead to significant and unexpected costs for businesses that have not consciously entered into an agency agreement with the influencer, but whose agreement in practice meets the criteria.
The Assessment in Rome
The Italian case arose after an inspection by Enasarco, a private foundation with a public function: managing the supplementary pension system for commercial agents in Italy, which does not exist in the Netherlands. According to Enasarco, the relationship between an (online) company specializing in food supplements and its influencers qualified as an agency agreement, making registration and pension contributions mandatory. The company disputed this. The company argued that the work performed by the influencers was not their most relevant activity, that the influencers had no direct customer contact, did not directly promote sales, did not work exclusively for the company, and had no assigned territory—features characteristic of an agency relationship.
The Court of Rome did not accept this reasoning and held that an influencer can be classified as a commercial agent when the characteristics of an agency agreement, as described in the law, are met. The judge pointed to the long-term relationship between the influencers and the company, with contracts that had been running for years for an indefinite period. The collaboration was aimed at actual sales, as evidenced by the use of personal discount codes (affiliate links) that allowed sales to be directly attributed to the influencers. According to the court, the influencers thus structurally mediated between the company and end customers and received commission based on realized sales. Although there was no assigned territory, the court considered the influencer’s followers to be a sufficiently clearly defined customer base. The court therefore concluded that there was an agency agreement between the company and the influencers. The absence of exclusivity did not affect the qualification, as exclusivity is not a requirement for the existence of an agency agreement in this context.
The Italian court thus classified the influencers as commercial agents based on the Italian Codice Civile, which is based on the European Commercial Agents Directive (86/653/EEC). Since this Directive has been implemented in a similar manner in the national law of other EU Member States – including the Netherlands – Dutch commercial agents may also fall under a comparable legal regime.
Influencer marketing and possible consequences in the Netherlands
An influencer in the Netherlands who collaborates with a business on a long-term and intensive basis, structurally promotes products via social media, receives commission for this, and mediates between the business and customers, could thus qualify as a commercial agent. Important criteria are the durability of the relationship, the degree of independence, the structural mediation in the conclusion of contracts, and working on a commission basis. Although collaborations are often short, the qualification as a commercial agent cannot be excluded in long-term and intensive relationships.
The statutory regime for commercial agents originated at a time when influencer marketing did not exist, let alone the situation where the principal operated an online webshop, with a product promoted online by an influencer and where the end customer made purchases online. However, this does not mean that an older regime cannot be applied to a modern method of working. The influencer may bring customers to the principal over a longer period, customers the principal would not have had without the influencer’s intervention. That the influencer can, under certain circumstances, be qualified as a commercial agent is not incomprehensible within the aforementioned statutory regime.
Problems for a business will arise when neither the influencer nor the business intended to create an agency relationship, but the influencer nevertheless qualifies as an agent and thus falls under the statutory regime. If the business uses only one influencer, the financial consequences may be manageable, but in many cases, as in Italy, a business will use multiple influencers, and when an influencer’s turnover increases, the cost for a business can become substantial upon termination of agreements with multiple influencers. Each influencer may potentially claim customer compensation.
Even without a written agreement or explicit intention, an influencer can, with the Italian court’s judgment in hand, be qualified as a commercial agent and claim statutory protection. This will particularly occur in a long-term relationship in which the influencer mediates on behalf of the business. Companies are therefore well advised to be aware of these risks and to structure their collaborations so as to avoid qualification as a commercial agent. The influencer, of course, may have a very different interest.
Conclusion
To prevent influencers from being qualified as commercial agents – as recently happened in Italy – it is important for businesses using influencer marketing to be aware of the legal qualifications.
The judgment of the Court of Rome was a decision of a lower court. The outcome of any appeal is not yet known, but the judgment remains relevant. Dutch influencers may invoke their rights as commercial agents. When deploying influencer marketing, it is therefore important to pay attention to these elements both when drafting the agreement and in the performance of the activities. An influencer may have an interest in being qualified as a commercial agent, due to the statutory protection for commercial agents. For businesses and principals, the situation is often different: they will want to avoid such qualification to escape the associated obligations and protection of the commercial agent.
It is not unlikely that this judgment will be followed in future case law within the European Union.
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