Govt: Celebrities, influencers promoting products must disclose ‘material’ interest

A new set of guidelines on ‘Endorsement Know Hows — for celebrities, influencers and virtual media influencers (Avatar or computer generated character) on social media platforms’ has also been released by the department.

The guidelines are applicable to celebrities, social media influencers, as well as virtual influencers, the government said. The definition of material benefits include monetary or other compensation; free products with or without any conditions attached, including those received unsolicited; contest and sweepstakes entries; trips or hotel stays; media barters; coverage and awards; or even personal or employment relationship, as per the guidelines.

It also advised the celebrities and influencers to review and satisfy themselves that the advertiser is in a position to substantiate the claims made in the advertisement. “It is also recommended that the product and service must have been actually used or experienced by the endorser,” the guidelines say.

Singh said the guidelines have been issued under the ambit of the consumer law that protects against unfair trade practices and misleading advertisements. In case of violation, the Central Consumer Protection Authority (CCPA) can impose a penalty of up to Rs 10 lakh, which can go up to Rs 50 lakh for subsequent offences. The authority can also ban the endorser for 1-3 years.

CCPA Chief Commissioner Nidhi Khare added that “misleading advertisements in any form, format or medium is prohibited by law”. So, individuals who have access to an audience and the power to affect their purchasing decisions, will have to disclose the material connection, as per the new norm, Khare said.

The size of the social influencer market in India is likely to rise to Rs 2,800 crore by 2025, Singh said, adding that there are more than one lakh social media influencers in the country who have a sizable following. But they need to behave responsibly and work on the principle of full disclosure, he said.

Consumers should know if something is thrown at them from digital media, the person or the entity which is sponsoring it have taken money or any form of connection they have with the brand, Singh said. The disclosure should be in such a manner that it is “hard to miss” and should be in simple language, as per the guidelines. Disclosures can’t be mixed with a group of hashtags or links.

For instance, during pictorial endorsements, disclosures should be superimposed over the image for viewers to notice. In case of videos, disclosures should be placed in the video and not just in the description and they should be made in both audio and video format. In the case of a live stream, disclosures should be displayed continuously and prominently during the entire stream.