7 Jun 2023 6:01 AM GMT
In the age of social media, influencers have become a powerful force in shaping consumer behaviors. Undeniably, influencers are able to connect with their audiences and impact customer choices. This sphere of influence is shaped by the trust placed on influencers by consumers. As a result, when influencers promote a product or service, it can have a significant impact on the purchasing...
In the age of social media, influencers have become a powerful force in shaping consumer behaviors. Undeniably, influencers are able to connect with their audiences and impact customer choices. This sphere of influence is shaped by the trust placed on influencers by consumers. As a result, when influencers promote a product or service, it can have a significant impact on the purchasing decisions of their followers. A product can quickly gain popularity and become a trend among their followers. This leads to increased sales for the manufacturer, as well as a boost in brand awareness and recognition.
In the infinite space of marketing and advertising, a need for regulation of influencer endorsement was felt in India due to several instances of misleading promotions and unfair trade practices on social media platforms. For instance, in 2022, a popular Indian influencer was fined for promoting a brand without disclosing that it was a paid promotion. The influencer had posted a picture of herself with a product without mentioning that it was an advertisement. This incident highlighted the need for stricter standards and transparency requirements on social media influencers if they promote products or brands.
To address these concerns, the Ministry of Consumer Affairs, Food, and Public Distribution (“Ministry”), through its Department of Consumer Affairs, has issued a set of guidelines called the ‘Endorsements Know-hows!’ (“Endorsement Guidelines”) for social media celebrities, influencers, and virtual influencers (collectively to be called as “Influencers”) on January 20, 2023. This move comes on the heels of the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022, issued under the Consumer Protection Act, 2019 (“Consumer Act”) on June 9, 2022.
The Endorsement Guidelines obligate Influencers not to deceive their audiences while endorsing any products or services and to comply with the provisions of the Consumer Act and any other regulations or guidelines that may be issued in this regard. These guidelines make it mandatory for social media influencers to disclose promotional content in accordance with the Consumer Act.
Before we go further, it is necessary to understand who these Influencers are. As per the Endorsement Guidelines, the following shall come under the definition of Influencers:
As per the Endorsement Guidelines, endorsements must be expressed in clear and unambiguous language using specific terms such as ‘advertisement’, ‘sponsored’, ‘collaboration’, or ‘paid promotion’ and should be separate from hashtags or links. Before endorsing any product or service, Influencers must have either personally used or experienced it, or conducted their due diligence. In pictures, disclosures should be superimposed over the image for viewers to notice, while in videos or live streams, disclosures must be made in both audio and video format and displayed continuously and prominently throughout the entire stream.
Department of Consumer Affairs has acknowledged that there exists some confusion concerning which word to use for what kind of partnership. To eliminate such confusion, the Endorsement Guidelines recommend the use of the terms – ‘advertisement’, ‘ad’, ‘sponsored’, ‘collaboration’, and ‘partnership’, along with hashtag or headline text for paid or barter brand endorsements.
The Endorsement Guidelines direct Influencers or groups who are in a position to influence their audiences’ purchasing decisions or opinions on a product, service, brand, or experience, to disclose their endorsements. Furthermore, the disclosure must be prominently displayed in the endorsement message in a clear and noticeable manner, separate from other hashtags or links.
It is advisable for Influencers to carefully review and confirm that the advertiser can support the assertions made in their advertisements.
The Endorsement Guidelines on Influencer marketing issued by the Ministry is a positive step taken by the Government, which has attempted to restrict deceptive advertising practices and safeguard the welfare of consumers. However, this will also create a burden on Influencers, especially on micro-influencers as now they are required to spend more time on creating content that conforms with the Consumer Act and these Endorsement Guidelines. As the saying goes, ‘with great power comes great responsibility’. Thus, by being transparent and honest about the nature of their endorsements, the Influencers can ensure that the products and services they promote are safe to avail, and garner the trust of the audience.
Authors: Avantika Shukla, Senior Associate and Anil Khanna, Associate at Sarthak Advocates & Solicitors