Consumer Affairs Ministry issues guidelines for social media influencers

As per the new guidelines, any endorser who fails to comply with the guidelines can be fined for Rs 10 lakhs and in case of repeat violation, the penalty can go up to Rs 50 lakhs in addition to a stop on endorsements by them for a period of six months to two years

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The endorsement guidelines and know-hows for social media influencers - including celebrities, influencers and virtual influencers - have been rolled out by the Consumer Affairs Ministry today.

Addressing a press conference on the launch of the same, Rohit Kumar Singh, Secretary, Department of Consumer Affairs, Ministry of CA, Food and Public Distribution, stated these guidelines are ‘trivial’ but ‘very important’ because the size of social influencer market in India stood at Rs 1275 crore in 2022, and is likely to rise to Rs 2800 crore by 2025 at a CAGR of over 19-20%.

Keeping this in mind, the ministry officials also went on to state that the influencers need to behave responsibly vis-a-vis consumers, thus the guidelines lay out the framework of how social media influencers should indulge in ‘disclosures’ of their relationships and substantiate the claims made by them.

The Consumer Protection Act, 2019, provides the framework for the protection of consumers against unfair trade practices and misleading advertisements.

Earlier in June, last year, the Central Authority for Consumer Protection (CCPA) had also released the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements.

Speaking at the conference, Nidhi Khare, Additional Secretary, Department of Consumer Affairs, stated that in order to be ‘valid’, an advertisement must contain truthful and honest representation and not mislead the consumers by exaggerating the accuracy, scientific validity, practical usefulness, capability or performance or make unverified claims that are based solely on the content of a publication.

“It should not present rights given to consumers by law as a distinctive feature of the advertiser's offer or suggest the claims made in it are universally accepted if there is significant division of informed or scientific opinion pertaining to such claims,” she added.

Additionally, Khare also went on to point out that all advertisements should comply with the provisions contained in any other sector-specific laws and rules and regulations and not mislead about the nature or extent of the risk to consumers' personal security or that of their families if they fail to purchase the advertised product.

It is also to be noted that misleading advertisements in any form, format or medium is prohibited by law be it on Print, TV, Radio, Outdoors, Digital or social media platforms.

However, as part of the new guidelines, all individuals or groups who have access to an audience and the power to affect their audiences’ purchasing decisions or opinions about a product, service, brand or experience, because of their authority, knowledge, position, or relationship with their audience, should make disclosures in both audio and video formats, apart from platform disclosure tools.

Apart from the celebrities and influencers, virtual influencers who are fictional computer generated ‘people’ or avatars but have realistic characteristics, features and personalities of humans, would also be required to make disclosures under the new guidelines when there is a material connection with any advertiser - as it may affect the weight or credibility of the representation made by them.

Under the guidelines, this material connection can be in the form of benefits and incentives like monetary compensation, free products, contests, trips, hotel stays, media barters, awards, employment, etc.

Touching upon how the influencers or celebrities can make disclosures, Khare emphasised that the thumb rule for disclosures is that it should be hard to miss and should be in a manner that they are clear and prominent and not mixed with a group of hashtags or links.

“In the case of a picture, the endorsement disclosure should be superimposed over the image so as to allow the viewers to notice it. In videos, it should be placed in the video and not just mentioned in the description. However, on limited space platforms, the disclosure should be simple and clear,” the guidelines mentioned.

Khare also went on to point out that the terms allowed for disclosures should be advertisement, ad, sponsored, paid promotion and paid and the language for it should be in the same dialect as the endorsement.

Furthermore, the new guidelines also recommend that the endorsers should actually use the product or service before rolling out the endorsement and review and satisfy themselves that the advertiser is in a position to substantiate the claims made in its ad.

Khare also went on to state that in case of failure of disclosure with regards to any material connection or non-compliance of the Consumer Protection Act 2019 and Rules made thereunder, would make such violators liable for strict action under the law.

“In case of violation of the guidelines, the CCPA can impose a fine of Rs 10 lakhs and can go up to Rs 50 lakhs if the endorser makes a repeated violation. We can also ask the endorser to stop endorsing products or services for a period of six months to two years, if they are found not complying with the guidelines on a repeated basis,” she added.

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