Being a social media influencer is a career that has appealed to many, and several of them have been highly successful in their chosen career. Their successes have resulted in a greater degree of promotional activities on social media, which further fueled the growth of the social media influencer market in India. The same was worth around $157 million last year and is slated to $345 million by 2025.
This has called for the need for guidelines that will limit unfair trade practices and misleading promotions, and the Indian government seems to have taken strict note fo it. In a press conference on Friday, the Department of Consumer Affairs introduced a host of endorsement guidelines for social media influencers and celebrities, which will make it mandatory for them disclose their material connections with a brand, service or company, which they are engaged in promoting through their social media handles.
In the press conference, the department introduced the mandatory disclosures of promotional content in accordance with the Consumer Protection Act, 2019. As per Rohit Kumar Singh, Secretary, Union Customer Affairs, the disclosures must be prominently and clearly displayed in the endorsement, which should continue terms such as “advertisement,” “sponsored,” or “paid promotion.” This should be a start towards tackling misleading promotions on the internet.
The disclosures and endorsements should be made in the same language as the content, and disclosures must be prominently and clearly displayed in the endorsement so that they are easily noticeable. Furthermore, the endorsements must be in simple, clear, and precise languages and influencers must refrain from endorsing products or services in which “due diligence has been done by them or that they have not personally used or experienced.”
In case of promoted content in videos, disclosures for paid promotions should be not be limited to the description. Instead, they must be made in both audio and video format, and influencers must disclose if they promote a brand, service or product during livestreams, per the guidelines.
Who do these new guidelines target? The department specified that the endorsement guidelines are applicable to both social media influencers as well as virtual avatars that are known to promote products and services online.
The individuals or groups who have access to an audience and the power to affect the purchasing decisions of their audiences, or their opinions about a product, service, brand or experience, are required to disclose under the new guidelines. This disclosure should happen “when there is a material connection between an advertiser and celebrity/influencer that may affect the weight or credibility of the representation made by the celebrity/influencer.”
“With the increasing reach of digital platforms and social media, such as Facebook, Twitter and Instagram, there has been a rise in the influence of virtual influencers, in addition to celebrities and social media influencers. This has led to an increased risk of consumers being misled by advertisements and unfair trade practices by these individuals on social media platforms,” the Union Consumer Affairs Ministry said in an official release.
“When there is a material connection between an advertiser and celebrity/influencer that may affect the weight or credibility of the representation made by the celebrity/influencer,” the department added. These material connections include monetary or other forms of compensation, such as free products, contests and sweepstakes entries. Trips or hotel stays, media barters, coverage and awards, or any personal, family or employment relationships are also included under material benefits.
In case social media influencers fail to make the disclosure, they will be slammed with hefty fines. The penalty is up to ₹10 lakhs on manufacturers, advertisers and endorsers and up to ₹50 lakhs for repeated offences.
Furthermore, the Central Consumer Protection Authority (CCPA) can also forbid the endorser of a misleading advertisement from making any endorsement for up to one year, which can extend up to three years in case of further contraventions.