24 May 2021

Influencers in the Western Balkans – Croatia

Influencer marketing is a fast-growing discipline, and the number of influencers is growing every day in our region.  Like Serbia, Croatia is also “fertile ground” for influencer marketing and numerous extremely “influential influencers”.  Testimonies of many, both “micro” and “macro” influencers from Croatia, demonstrate that this indeed amounts to a full-time job. So, how does one hire an influencer?  In a nutshell, after “becoming famous”, influencers receive offers to promote various products and services on a daily basis, but how is this activity legally regulated in Croatia?

Stay tuned, as we discuss below in greater detail the legal position of influencers and their obligations.

How to hire an influencer in Croatia?

Like Serbia, there is no specific act or bylaw that regulates their position.  Croatia is an EU member state, and there is a tendency for the position of influencers to be explicitly regulated within the EU, so it is reasonable to assume that an act would be adopted soon to regulate the activity.  This would certainly be a significant development because it would eliminate all the doubts that arise when analyzing the position and business activities of influencers.  Influencer marketing is clearly one of the hottest business services of our times (and probably the future), and the law must keep up with that.

For now, you can hire an influencer…

The most common solution in practice is signing an agreement on the order regulated by the Civil Obligations Act.  By definition, this contract includes a service provider who is to perform an activity, either physical or intellectual, and the client has the obligation to pay a fee for these services.  Given the breadth of scope of such a definition, it is clear that influencing can belong there, but the question remains whether it would be better to have a specific kind of contract to regulate this area.

Is Influencing Advertising?

In principle,  the activity of influencers falls under the category of promotional activity in a legal sense, and this is the case in Croatia.  To learn more, one should consult the Media Act.  This Act does regulate advertising and promotion but does not explicitly address the issue of social networks and influencers.  However, it goes into great detail about which activities are considered advertising.  Therefore, according to the Act, advertising is defined as an activity undertaken for monetary or other compensation or for the purpose of self-promotion.  In addition, there is a clear requirement that the advertisement must be marked as such and visibly separated from other programming.  The extent to which this “separation” is possible in practice when it comes to influencer marketing, remains a dilemma.

Also, misleading practices in advertising are prohibited – ads must not lead the viewer to think that it is about the actual media content.

And that is not all…

Influencers must be mindful of whether they are being paid for an endorsement or promotion.  If the endorsement is genuine or free of charge, this must be indicated separately. Additionally, any journalistic form that is paid for and not marked as advertising is considered covert advertising.

As in Serbia, sponsored content must in some way indicate the name or logo of the sponsor.

Also, one cannot advertise anything…

There is a ban on advertising certain products.  There is an explicit ban in place on advertising products deriving from tobacco, alcohol, products such as weapons and prescription drugs.  In addition, any type of advertising aimed at discrimination on the grounds of sex and sexual orientation is clearly prohibited.

And what happens if the advertising rules are violated?

A legal entity that violates the rules on advertising runs the risk of being sanctioned with a fine ranging from 100,000 to 1,000,000 HRK.  For individuals, the amount is much lower – from 10,000 to 50,000 HRK.  So, influencers could be punished for “improper” influencing.  Whether this amount is appropriate to prevent illicit advertising remains to be seen.

And what about taxes?

As influencers generate ever-increasing revenues, they must also consider their tax obligations.  As in Serbia, influencers in Croatia are not exempt from paying taxes in accordance with the Income Tax Act.

What can we conclude?

The emergence of influencer marketing influencers is a relatively new phenomenon, and chances are the legal framework should take some time to recognize this category of business activity.  However, given the growing importance and presence of influencers, new and more detailed solutions can be expected.  In the meantime, let’s take a look at what’s new on Instagram.


Author: Mina Kuzminac