Guidelines mandate social media influencers to make clear disclosures on endorsements

The Union Government has released guidelines requiring celebrities and virtual influencers to specify prominent and clear disclosures in their endorsements, attracting legal action on violation.

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ON January 20, according to a press note issued by the Press Information Bureau (PIB), the Department of Consumer Affairs under the Union Ministry of Consumer Affairs, Food and Public Distribution released endorsement guidelines for celebrities and social media influencers, who have access to an audience and can influence their purchasing decisions or opinions, mandating clear disclosures of their material interest.

The guidelines were released in accordance with the Consumer Protection Act, 2019, to protect consumers from unfair trade practices and misleading advertisements. According to Section 21 of the Consumer Protection Act, the Central Consumer Protection Authority can direct the discontinuance of such an advertisement by an endorser.

The authority can impose a penalty to the extent of ten lakh rupees on manufacturers, advertisers and endorsers, and up to fifty lakh rupees for subsequent offences, against false and misleading advertisements. Further, the Act provides that the endorser can be prohibited from endorsing any product or service for up to one year, which can extend up to three years for every subsequent contravention.

According to PIB's press note, the guidelines, titled 'Endorsement Know-hows — for celebrities, influences and virtual influencers on social media platforms', require a celebrity, influencer or virtual influencer to disclose any material connection with the advertiser, including benefits and incentives, as well as monetary or other compensation. It mandates that the disclosures must be prominent, clear and 'extremely hard to miss' in the endorsements. The press note clarifies that the endorsements must be in simple and clear language, encouraging the use of terms such as 'advertisement', 'sponsored', or 'paid promotion'.

Under the guidelines, the product and service must have been actually used or experienced by the endorser, the press note mentions. It further necessitates due diligence by influencers.

The press note states that Rohit Kumar Singh, Secretary, Department of Consumer Affairs, released the guidelines to address the needs of the growing digital world, particularly where advertisements are not restricted to traditional media such as print, television or radio. "With the increasing 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. 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 press note added.

On the purpose of releasing the guidelines, the press note explains that it aims to ensure that influencers on social media platforms are restrained from misleading their audiences when endorsing products or services and to further ensure compliance with the Consumer Protection Act and its rules and guidelines.