On Friday (January 20), the Union Government issued guidelines [pdf] to influencers and celebrities with respect to the promotion/ endorsement of products and services on social media.
To this effect, a detailed guide titled ‘Endorsements Know-hows’ was released by the Union Ministry of Consumer Affairs, Food and Public Distribution. The objective is to protect digital consumers from false and misleading advertising and unfair trade practices.
In a tweet, Union Minister Piyush Goyal wrote, “Protecting Consumer Choice! Endorsement guidelines for celebrities & social media influencers released. Disclosures to be prominently and clearly displayed to stop consumers from being misled.”
Protecting Consumer Choice!
— Piyush Goyal (@PiyushGoyal) January 21, 2023
Endorsement guidelines for celebrities & social media influencers released.
Disclosures to be prominently and clearly displayed to stop consumers from being misled.
📖 https://t.co/c3I4SAPRZJ
The guide reiterated the need for influencers and online celebrities to adhere to the rules laid down by the Consumer Protection Act of 2019. It stated that they must disclose any “material connection” with an advertiser during the endorsement of products and services.
According to the Department of Consumer Affairs, the material connection included monetary compensation, unsolicited free products, trips or hotel stays paid for by the advertiser, media barters etc.
“Disclosures should be placed in the endorsement message in such a manner that they are clear, prominent and extremely hard to miss…Disclosures should not be mixed with a group of hashtags or links,” the guide read.
This is Actually Welcoming Step @ascionline have been working on this for long, they have many COC and Self Regulations for Creators
— Ravisutanjani (@Ravisutanjani) January 22, 2023
With Government & Ministry is Consumer Affairs entering, expecting for a Better & Sustainable Ecosystem
The guidelines stated that the disclosures must be made in simple, easy-to-understand language. Terms such as ‘advertisement’, ‘ad’, ‘sponsored’, ‘paid promotion’, ‘paid’ etc might be used to make the nature of the relationship, with the advertiser, clear to the audience.
It further stated that disclosures must be prominently featured in ad videos or superimposed on an image used by influencers and celebrities. “Disclosures should be displayed continuously and prominently during the entire stream,” it added.
The ‘Endorsements Know-hows’ guide also laid down the criteria of ‘due diligence’ i.e. a product or service promoted by an influencer on social media must be used/ experienced by the influencer prior to endorsement before his/her audience.
The New Guidelines will be applicable to
— Ravisutanjani (@Ravisutanjani) January 22, 2023
• All Social Media Influencers
• Virtual Avatars
• Celebrities
For Promoting Products and Services Online
The guidelines also apply to virtual influencers who have been defined as “fictional computer-generated ‘people’ or avatars who have realistic characteristics, features and personalities of humans, and behave in a similar manner as influencers.”
It cautioned, “In case celebrities and influencers don’t disclose their material connection, their opinion may be inferred as biased and/or misleading. However, if celebrities and influencers disclosed their material connection, the consumers will be able to make an informed decision.”
Failure to disclose any material connection or non-compliance of the Consumer Protection Act 2019 and Rules made there under would make such violators liable for strict action under the law,” it further cautioned.
🚨 Big – Social Media Influencers will have to pay upto ₹50 Lakh Fine for Non Compliance
— Ravisutanjani (@Ravisutanjani) January 22, 2023
Consumer Affairs Ministry Released New Endorsement Guidelines on Friday
Importantly, the Consumer Protection Act of 2019 [pdf] lays down clear directions to impose fines and penalties for false and misleading advertising. Section 21 of the Act states:
(1) Where the Central Authority is satisfied after investigation that any advertisement is false or misleading and is prejudicial to the interest of any consumer or is in contravention of consumer rights, it may, by order, issue directions to the concerned trader or manufacturer or endorser or advertiser or publisher, as the case may be, to discontinue such advertisement or to modify the same in such manner and within such time as may be specified in that order.
(2) Notwithstanding the order passed under sub-section (1), if the Central Authority is of the opinion that it is necessary to impose a penalty in respect of such false or misleading advertisement, by a manufacturer or an endorser, it may, by order, impose on manufacturer or endorser a penalty which may extend to ten lakh rupees: Provided that the Central Authority may, for every subsequent contravention by a manufacturer or endorser, impose a penalty, which may extend to fifty lakh rupees.
As such, the guidelines issued by the Union Ministry of Consumer Affairs, Food and Public Distribution will increase transparency and let consumers know whether their favourite influencer is endorsing a product organically or not in their vlog or Instagram posts.
