New Delhi: The government on Friday made it mandatory for social media influencers to disclose all “material” interests such as gifts, hotel accommodation, equity, discounts and prizes while endorsing any product, service or scheme, failing which Strict legal action was taken including ban. Can be taken on approval.
Disclosures should be in simple and clear language, be of a duration that is difficult to miss, be driven with support, include live streams and be platform agnostic.
The rules are part of continued efforts to curb misleading ads as well as protect the interests of consumers, which is expected to grow 20 per cent annually to Rs 2,800 crore by 2025 amid a growing social influencer market.
New guidelines titled ‘Endorsement No House – for celebrities, influencers and virtual media influencers (avatars or computer generated characters) on social media platforms’ have been issued by the Department of Consumer Affairs.
In case of violation, the penalty prescribed for misleading advertisement under the Consumer Protection Act 2019 will be applicable.
The Central Consumer Protection Authority (CCPA) can impose a fine of up to Rs 10 lakh on manufacturers, advertisers and endorsers. For subsequent offences, a fine of up to Rs 50 lakh can be imposed. The CCPA can bar an endorser of a misleading advertisement from making any endorsements for up to 1 year and for subsequent violations the ban can extend to 3 years.
Releasing these guidelines at a press conference, Consumer Affairs Secretary Rohit Kumar Singh said that the guidelines have been issued within the ambit of CCPA which provides the framework for protection of consumers against unfair trade practices and misleading advertisements.
He hoped that the guidelines would act as a deterrent to social media influencers.
“This is a very important topic. The size of the social influencer market in India in 2022 was of the order of Rs 1,275 crore and by 2025, it is expected to grow to Rs 2,800 crore with a compound annual growth rate of around 19-20 per cent Social media influencers, that is, those who have a good number of followers, their number in the country is more than one lakh.
The Secretary said that the influence of social media is here to stay and will only grow exponentially and hence there is a need to regulate misleading advertisements on social media.
“Today’s guidelines are aimed at social media influencers who have a physical relationship with the brand they wish to promote on various social media platforms. It is an obligation on them to As far as disclosure is concerned, they should behave responsibly.”
“One of the biggest paradigms of consumer law is the right of consumers to know and this falls within that. Consumers should know that if something is thrown at them from digital media, the person or organization that sponsored it They have had any kind of association with money or brands,” Singh said.
In case of non-compliance, Singh said there are provisions under the law that people can approach the authority for legal action against defaulters. The authority has the means to conduct an inquiry and can also take up matters suo motu.
Elaborating on the guidelines, CCPA Chief Commissioner Nidhi Khare said material connections may include, but are not limited to, benefits and incentives, such as monetary or other compensation; free products, including those received unwanted discounts, gifts; contest and sweepstakes entries; trips or hotel stays; media barters; coverage and rewards; or any family, personal or employment relationship.
The new guidelines specify to whom to disclose, when to disclose and how to disclose.
Disclosure to individuals/groups with the power to influence their audience’s purchasing decisions or views about a product, service, brand or experience because of the influencer’s/celebrity’s authority, knowledge, position, or relationship with their audience to do.
“Disclosure must be made when there is a material relationship between an advertiser and the celebrity/influencer that could affect the weight or credibility of the representation made by the celebrity/influencer,” Khare said.
He said the disclosure should be made in such a way that it is “difficult to miss” and should be in simple language.
Disclosures should be placed in the support message in such a way that they are clear, prominent and extremely difficult to miss. Disclosure should not be mixed with a hashtag or group of links.
In support of a photograph, the disclosure must be sufficiently superimposed on the image for the viewer to notice it. Disclosures in video should be placed in the video and not just in the description and they should be made in both audio and video formats.
In the case of a live stream, the disclosures must be displayed continuously and prominently throughout the stream.
He added that even words like ‘XYZAssador’ (where XYZ is a brand) are acceptable on a space-constrained platform like Twitter.
The Secretary said that these guidelines are being issued within the overall ambit of the Consumer Protection Act and one of the main underpinning principles of the law is prevention of unfair trade practices.
“There are many ways in which unfair trade practices occur, one important unfair trade practice is the threat of misleading advertisements, which is trying to sell something that is not being portrayed in the advertisement.
“While this has been handled efficiently in traditional media – that is TV, print and radio, social and digital media platforms are becoming different ball games,” said Singh.