Govt Releases Guidelines For Social Media Influencers; False Advertisement Can Now Attract Up To Rs 50 Lakh Fine

Social media influencing has grown over time as modern-age advertising and influenced people's purchasing choices. For the longest time, this section remained unregulated as it was a relatively new space that fell under the ambit of advertising. As of January 20, a change has been brought into this system which would hold influencers accountable for what they choose to advertise. The government has made it mandatory for influencers to disclose all "material" interests, such as monetary benefits, gifts, hotel accommodation, equity, discounts, and awards they receive in return for endorsing any products, services, or scheme. Failing to disclose such information appropriately would lead to strict legal action, including a ban on the influencer from taking up any more endorsements.

Striking Possibilities Of Unfair Trade On Social Media

Launching the new guidelines at a press conference, Consumer Affairs Secretary Rohit Kumar Singh said that social media influencing is here to stay and that it would only grow exponentially over the coming years. This brought in the need to regulate the possibility of misleading advertising on social media. The guidelines named "Endorsement Know Hows - for celebrities, influencers and virtual media influencers (Avatar or computer generated character) on social media platforms" has been issued by the Department of Consumers Affairs for this reason.

The guidelines fall under the lines of protecting consumers against unfair trade practices. With the consumer base growing and evolving in different mediums, there are many ways in which unfair trading practices can take place. One of the important unfair trading practices in all existing platforms today is misleading advertisements, where the seller or agency tries to sell something which is not exactly as it has been portrayed. This has been handled to an extent in the conventional platforms of television, radio, and print. "The social and digital media platforms are turning out to be a different ball game," conveyed Singh.

According to details shared during the conference, the social influencer market is expected to grow by 20 per cent annually to reach ₹ 2,800 crores by 2025. In light of the expanding social influencer market, the notice directs the influencers to disclose necessary details to protect the interests of the consumers. All such information should be provided to the consumer in simple and clear language, and must through every endorsed content, including live streams, and should be platform agnostic.

If found to be in violation, the fine prescribed for misleading advertisements under the Consumer Protection Act 2019 will apply even to social media advertisers. The Central Consumer Protection Authority (CCPA) imposes a penalty of up to ₹10 lakhs on manufacturers, advertisers, and endorsers for unfair practices such as misleading advertisers. For subsequent offences, the penalty can go up to ₹50 lakhs. Under the law, the CCPA can then prohibit the endorser from making any endorsement for up to one year or even three years for subsequent contravention. The authority also has the wherewithal to investigate such cases and take up action suo moto.

Holding Influencers Responsible

Singh stated that the newly issued guidelines would act as a deterrent for social media influencers. Adding on to it, he said that currently, the social media influencer of substance - meaning those having a decent number of followers, are over one lakh in the country. With the growing market, it should be considered an obligation for influencers to behave responsibly and be accountable to their consumers.

Speaking on these lines, Singh said, "One of the biggest paradigms of the consumer law is the consumers' right to know, and this falls in that purview." This includes the consumers' right to know if the brand has sponsored the person or the entity in any manner to sell it to the consumer through digital media. According to CCPA Chief Commissioner Nidhi Khare, sonsorships and material connections could range from incentives, such as monetary; free products, including those received unsolicited, discounts, gifts; contest and sweepstakes entries; trips or hotel stays; media barters; coverage and awards; or any family, personal or employment relationship.

The press meeting also clarified the who, where, and how of the new guideline. Only influencers with substance would be held liable to disclose information. According to NDTV, those with substance include individuals or groups with access to an audience and the power to influence the audiences' purchasing decisions or opinions regarding a product, service, brand, or experience. This could be because of the influencer's authority, knowledge, position, or relationship with their audience.

The influencers are then responsible for disclosing to their audience that there has been a "material connection" between them and the advertiser, which could possibly affect the weight or credibility of the representation. The disclosures have to be presented to the audience in a way that is "hard to miss." It cannot be mixed with a group of hashtags or links. They should instead be superimposed over the image or video enough for viewers to notice. In the case of live streams, disclosures can be displayed continuously and prominently during the entire stream.

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