Social media influencers including celebrities will need to mandatorily make “hard-to-miss” disclosures for promotional posts. The Consumer Affairs Ministry on Friday released guidelines for social media influencers which includes celebrities and virtual avataars. Violations of the guidelines will attract penalties of upto ₹10 lakh and can extend upto ₹50 lakh. Errant influencers can also be prohibited from making any endorsements for upto one-three years.

Rohit Singh, Secretary, Consumer Affairs Ministry said the guidelines have been issued under the ambit of the Consumer Protection Act. “ One of the underlying principles of the Act is prevention of unfair trade practices including the menace of misleading advertisements. These guidelines are for social media influencers including celebrities, who have a material connection with a brand that they want to promote on social media platforms. Their obligation will be to behave responsibly and make a disclosure to ensure consumers are able to distinguish between organic and paid content on social media,” he added.

Material connection

Material connection includes monetary compensation, free products ( including those received unsolicited), discounts, gifts, contest and sweepstakes entries, free trip or hotel stays, media barters among others.

Disclosures such as #ad, #paidpromotion or #sponorsed will need to be prominent and “extremely hard to miss”, the guidelines stated. It will need to be superimposed on a picture. In case of a video it will need to be placed in video and audio format and not just in the description. During a livestream, disclosures will need to be displayed continuously and prominently in the form of a ticker. Such disclosures will need to be made in addition to platform disclosure tools.

“Celebrities/influencers are advised to always review and satisfy themselves that the advertiser is in a position to substantiate the claims made in the advertisement,” the guidelines added.

Singh said that failure of disclosure of material connection will make influencers liable to strict action under the law. He added that the Central Consumer Protection Authority will also deploy technology tools to check on such violations. 

Prohibit violators

As per Consumer Protection Act, errant endorsers can attract penalties of upto ₹10 lakh for first count and upto ₹50 lakh for more than one violation. In addition, CCPA can prohibit violators from making any endorsement for upto one year and for subsequent contraventions for upto three years.

Payal Sakhuja, Founder, Ripple Links, an influencer marketing agency, said that the Ministry’s guidelines will provide an overarching regulatory framework to an industry that has become an essential tool in brands’ marketing mix. “These guidelines will provide regulatory clarity to creators and brands and ensure transparency benefiting consumers,” she added.

Influencer marketing is expected to become a ₹2800 crore industry by 2025 as per estimates. 

Stating that the Ministry’s guidelines are aligned with ASCI’s influencer guidelines released in 2021, Manisha Kapoor, CEO & Secretary General, Advertising Standards Council of India added that influencer violations comprise almost 30 per cent of ads taken up by the self-regulatory body.

“The increasing reach of social media makes it necessary to ensure that there is responsibility and accountability for actions if there is a violation and that’s what this does,” said Chandrima Mitra, Partner, DSK Legal.