The government has issued new rules mandating that social media influencers clearly label sponsored content or face fines of up to Rs 10 lakh for first-time offences and Rs 50 lakh for repeat offences. The regulations, issued by the Ministry of Consumer Affairs, Food & Public Distribution, aim to ensure that individuals do not deceive their audiences when promoting products or services and that they comply with the Consumer Protection Act and related rules or guidelines.
The guidelines stipulate that disclosures must be prominently and clearly displayed in any endorsement, making them difficult to miss. They apply to any celebrity, influencer or virtual influencer who has access to an audience and can influence their purchasing decisions or opinions about a product, service, brand or experience. The influencers must disclose any material connection with the advertiser, including benefits, incentives, monetary or other compensation, trips or hotel stays, media barters, coverage, awards, free products with or without conditions, discounts, gifts, and any family or personal or employment relationship.
Endorsements must be made in simple, clear language and terms such as “advertisement,” “sponsored,” or “paid promotion” can be used. Influencers should not endorse any product or service that they have not personally used or experienced.
The guidelines were released in line with the Consumer Protection Act of 2019, which established guidelines for protecting consumers from unfair trade practices and misleading advertisements. The Department of Consumer Affairs has published guidelines for the prevention of misleading advertisements and endorsements for misleading advertisements, 2022 on 9th June 2022. These guidelines outline the criteria for valid advertisements and the responsibilities of manufacturers, service providers, advertisers, and advertising agencies.
Multiple social media influencers and agencies participated in a press conference via video conferencing to release the guidelines. The industry welcomed and supported the release of these guidelines, stating that it will further strengthen the industry and protect consumer interests.
With the growing 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. The Ministry said 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 Department of Consumer Affairs under the Ministry of Consumer Affairs, Food and Public Distribution released a guide ‘Endorsements Know-hows!’ for celebrities, influencers and virtual influencers on social media platforms on Friday.
