Centre Tightens Disclosure Norms For Social Media Influencers, What Lies Ahead?

In an interesting development, the Department of Consumer Affairs has issued regulations titled endorsement know-hows for celebrities, influencers and virtual media influencers, avatars or computer-generated characters, on social media platforms. 

As per the guidelines, social media influencers will have to disclose their material interest in endorsing goods and services.

The guidelines state that endorsements must be made in simple, clear language and terms such as advertisement, sponsored, collaboration or paid promotion can be used.

In addition to this, Individuals must not endorse any product or service that they have not personally used or experienced or in which due diligence has not been done by them.

It aims to ensure that individuals do not mislead their audiences when endorsing products or services and that they are in compliance with the Consumer Protection Act and any associated rules or guidelines. 

It is essential for celebrities, influencers and virtual influencers to adhere to these guidelines to maintain transparency and authenticity with their audience.  

The laws are part of ongoing efforts to prevent deceptive advertising and safeguard customers' interests in the burgeoning social influencer business, which is expected to be worth over Rs 2,800 crore by 2025.

The Consumer Protection Act of 2019's penalty for deceptive advertising will be applicable in the event of a violation. Those who violate the law may suffer serious legal repercussions, such as a ban on endorsements.

According to a statement by Manisha Kapoor, CEO & Secretary General, ASCI, The Ministry of Consumer Affairs' endorsement guidelines are welcomed by ASCI. The guideliness comply with the 2021 ASCI influencer requirements.

Around 30 per cent of the advertisements that ASCI accepts involve influencer infractions, so this legal support for disclosure standards is a step in the right direction. The Government had spoken with ASCI to study the various international regulations regarding influencers.

What lies ahead?

In recent times, trends in the advertising industry have shifted towards digital. The advertising reports of dentsu say that digital media will overtake TV in 2023 as the advertising spent on the digital medium will account for a total of 40 per cent among others. However, another report by madison media believes that digital media will drive the advertisement expenditure growth with a 41 per cent share.

“We are in accordance with such a rule. May it be brands, influencers or the consumer base. From a performance influencer marketing point of view, this doesn't deter our workflow. Since our creators are explicit about a collaboration post. We've also noticed that if creators are more real and honest their cost per action is better,” comments, Yulia Aslamova, Head of Asia at DRIM Global.

There is no doubt that social media influence is here to stay and will only grow exponentially. Adding to this, Sumit Gupta, Founder, Viral Pitch, says that as a platform, we believe that transparency and honesty are key to building trust with consumers and creating a fair and ethical marketplace. 

The guidelines set forth by the Consumer Affairs Ministry have certainly legitimised the influencer industry as a whole in an attempt to build a robust structural approach around it.

Gupta shares, “I strongly feel that such an intervention might ultimately be helpful in steering brands in a direction that puts the consumer’s right to know first, as it always should have been. Furthermore, I feel it will be beneficial for the government to spread awareness about these guidelines through influencers themselves as it will not only help fast-track the implementation process but will also help them educate the stakeholders about the possible repercussions." 

"When it comes to due diligence, we always work closely with our influencer partners to ensure that they are fully compliant with these guidelines and continue to provide valuable, high-quality content to their followers," adds Gupta.

Influencers and brands run the danger of consumers bringing legal action against them if they fail to install this as more consumers become aware of it. Because many market influencers lack the legal acumen to be aware of all these compliances, brands and agencies will need to make sure they comply. This will help to ensure that influencers do not expose themselves to the same hazards. 

Process-oriented companies and agencies who adhere to regulations will undoubtedly put this into practise; it's even conceivable that they'll include it in their audits, agreements and other processes.