10 Jun 2021

The Status of Influencers in North Macedonia

The imaginary familiarity with a famous person through platforms such as Instagram is more common when the other party is a so-called influencer – a person that enjoys appreciation of a large number of users due to their reputation.  The imaginary closeness is, on the other hand, a very powerful tool in hands of influencers as users often aspire to emulate their lifestyle.  However, the lifestyle the influencer presents is not always genuine as the content presented often includes (some form of) promotion.  When an influencer shows on their profile that they use a certain product, there is a great chance that their followers will also choose to buy it.  Therefore, influencer marketing may have a significant influence on consumer preferences.

So, how can businesses promote their products in North Macedonia in cooperation with influencers, and do influencer contracts exist in the country?

Basis for engaging an influencer

The Contracts and Torts Act (Macedonian: Закон за облигационите односи) generally allows for contracts with influencers, taking into account the principle of freedom of contract and compliance with the Constitution, laws and customs.  A business can conclude a contract with an influencer to advertise a particular product and precisely define the implementation of the proposal.  This seems like a regular situation in which two parties enter into an agreement for the provision of a service, which could be subsumed under the definition of a temporary service contract.  Also, when it comes to influencers with thousands of followers, there may be a variant with the intercession of marketing agencies between companies and influencers.

But does the legislation of North Macedonia provide more precise guidelines? It does, but only to a certain degree – for instance, the Trade Act (Macedonian: Закон за трговија) mentions “economic propaganda” services.  Even though the Trade Act does not provide a detailed explanation, economic propaganda usually includes any type of paid promotion of products or services, carried out through mass media.  In this sense,  influencer marketing could also be considered a form of economic propaganda, as the promotional services provided by influencers is usually not for free.  What obligations does the influencer have in return?  Certainly, to effectively convey to his or her audience the recommendation to buy a specific product by posting on their social feeds and other platforms.  Even though this seems like a relatively easy task, creating a post often requires the services of a professional photographer/videographer and entails numerous other costs including equipment rental, props for set, apparel…  Apart from the fee, the contract may cover other aspects, such as the ban on advertising the products of a competitor.

So, who owns the (IP) right(s) on a post?  In North Macedonia, the basis for these clauses is the Copyright and Related Rights Act (Macedonian: Закон за авторското право и сродните права).  For example, most of the posts include photos, and the Copyright and Related Rights Act protects a photo as a work of copyright.  The person who created the photo will be the legal author.  However, copyright disputes are usually resolved much faster if a contract exists than if the sole basis of the dispute is the Copyright and Related Rights Act.

Additionally, the issue of taxation should be addressed, because whoever earns the income is also obliged to pay taxes.  Thus, the Personal Income Tax Act (Macedonian: Закон за персоналниот данок на доход) explicitly mentions a 10% income tax on all income earned from internet marketing services.  Furthermore, the aforementioned Act notes that a natural person who earns income on the territory of North Macedonia will be obliged to pay income tax, regardless of their residency status in the country.

What is not allowed?

Concluding contracts with influencers is only one type of marketing for companies and it doesn’t provide for absolute freedom or creativity.

The Consumer Protection Act (Macedonian: Закон за заштита на потрошувачите) prohibits misleading advertising – advertising that may misinform a consumer in relation to the properties of the product. The Act especially mentions potential misleading information on product composition, production method, product origin, effectiveness, suitability for a purpose, pricing etc…  In cases of potentially misleading advertising, businesses can contact the Macedonian Chamber of Commerce, which will then issue a non-binding opinion on the matter.  Businesses with legal interest, may go on to request a formal inspection that may in turn result in an order of cessation of the misleading advertising.