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New rules for social media influencers: hefty fines for non-compliance

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The world of social media influencers is getting bigger and bigger by the day, with more and more people becoming influencers and making a living out of it. However, with this growth comes the need for regulation, and India is no exception.

The Indian government has recently introduced new endorsement guidelines to limit unfair trade practices and misleading promotions on the web. The Department of Consumer Affairs has held a press conference to announce these guidelines, which make it mandatory for social media influencers to disclose promotional content in accordance with the Consumer Protection Act, 2019.

The new guidelines named ‘Endorsement Know Hows – for celebrities, influencers and virtual media influencers (Avatar or computer generated character) on social media platforms’ have been issued by the Department of Consumers Affairs. They apply to social media influencers as well as virtual avatars promoting products and services online. 

The Secretary of the Department of Consumer Affairs, Rohit Kumar Singh, said “Today’s guidelines are aimed at social influencers who have a material connection with the brand they want to promote on various social media platforms. So this is an obligation for them to behave responsibly.

Rohit Singh also said that the department was in talks with tech companies to deploy some crawling algorithms to identify offenders and that consumers can file complaints if they find an influencer violating the guidelines. He stated that the size of the social media influencer market in India in 2022 was $157 million and could reach as much as $345 million by 2025.


What is actually the Know- hows for the influencers?

Disclosing endorsements to the audience if there is a material connection with the advertiser (as per the guidelines of the Consumer Protection Act, 2019)

And ‘Material connection’ can include:

  • Getting paid for promotion
  • Free gifts, discounts, etc.
  • Contests and Sweepstake entries
  • Trips and hotel stays
  • Media Barters
  • Coverage and awards
  • Any other personal, family, or employment relationship
  • Being a stakeholder in the company

And most important, the disclosures should be in such a manner that it is “hard to miss” and should be in simple language.

How to disclose the endorsements?

The Ministry clarified how to disclose endorsements in a press conference.

  • Disclosures should be easy to notice in post descriptions where you can usually find hashtags or links and should be prominent enough to be noticeable in the content.

See how #AD is clearly mentioned in the description and the title of the video.

  • When it comes to promoting content in videos, the department said that disclosures for paid promotions should be placed in the video, not just in the description but to be made in both audio and video format. 
  • If the endorsement is being done through a picture, then disclosure should be superimposed over the image.
  • During livestream, disclosure should be displayed continuously in the form of a ticker during the entire length of the stream.
  • Influencers should use the brand name they are promoting and paid promotion, ad, or sponsored to highlight that the post/video is an endorsement.

Find below the example- Paid partnership with philipsindia

The Advertising Standards Council of India (ASCI) has welcomed the government’s move. Its CEO and Secretary General, Manisha Kapoor, said that influencer violations comprise almost 30% of ads taken up by ASCI and that the ministry had been in touch with ASCI to review the various global guidelines on influencers.

If anyone fails to abide by the law, legal action can be taken against them by approaching the authority. The Central Consumer Protection Authority (CCPA) has the power to investigate and impose penalties of up to ₹ 10 lakhs on manufacturers, advertisers and endorsers for their first offence. Subsequent offences can result in a penalty of up to ₹ 50 lakhs. The endorser of the misleading ad can also be prohibited from making any further endorsements for a period of 1 year for their first offence and 3 years for subsequent offences.

(Source: NDTV)

So, all in all, it is essential for consumers to know if something is thrown at them from digital media, whether the person or the entity which is sponsoring it has taken money or any form of connection they have with the brand. The new guidelines seek to protect the interests of the consumers and ensure that they are not taken for a ride by showing them something as unbiased whereas actually, it is a paid thing.

In conclusion, the new guidelines issued by the Department of Consumer Affairs are a welcome step towards making social media influencers more accountable for their promotional content and ensuring that consumers are not misled. With stringent penalties in place for non-compliance, social media influencers will now have to be more responsible and transparent in their endorsements.

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