The Central Consumer Protection authority (CCPA), under the Ministry of Consumer Affairs, has released endorsement guidelines for social media influencers. The new guidelines call for a Rs 10 lakh fine for offenders and for repeated offenders the fine can go up tp Rs 50 lakh. The ministry can even stop the celebrity from endorsing in case of repeated non-compliance of the guidelines.
The influencer can even be barred from endorsing products for up to 6 years in case of repeated non-compliance of the guidelines. They should be able to substantiate the claims made by them. The Consumer Protection Act, 2019 provides the the framework for the protection of consumers against unfair trade practices and misleading advertisements.
“ASCI welcomes the endorser guidelines issued by the Ministry of Consumer Affairs. We are happy to note that they are aligned with ASCI’s influencer guidelines, 2021” said Manisha Kapoor, CEO & Secretary General, ASCI. “Influencer violations comprise almost 30% of ads taken up by ASCI, hence this legal backing for disclosure requirements is a welcome step. The Ministry had been in touch with ASCI to review the various global guidelines on influencers,” she added.
The product and service must have been actually used or experienced by the endorser, the ministry said, adding that consumers can seek legal actions against those defaulting.
Virtual influencers, implying computer generated avatars, who behave in a similar manner as an influencer also fall under the ambit of these guidelines.
Expressing his views on the development, Lokesh Jain, Co-Founder & COO, 8Bit Creatives said, “These guidelines are indeed a significant step towards building an ecosystem of trust and transparency between the influencers and their loyal fanbase. The unwavering faith that fans put into a creators’ content and their opinions need to be met with unbiased, honest views to distinguish between the products that they are ‘endorsing’. Content creators are responsible for influencing a massive set of people that religiously follow their every step. This set of guidelines will not only help fans figure out the authenticity of the creator they admire but also whether or not they actually utilize the product or services which they endorse.”
On impact of the guidelines on the influencer ecosystem in India, Jain added, “Firstly, the viewership for these paid ads of an influencer may decrease which in turn can affect the reach and engagement of the creator with their audience. However, this can be avoided if the brand allows freedom to the influencers by integrating their endorsement in the creators’ content through various engaging and fun ways that stop the viewer from skipping the ad. Moreover, brands will also be cautious about the influencer that they are choosing for their particular products and will prefer to opt for a more suitable fit unlike earlier to make the endorsement seem legitimate. Strict implementation of these guidelines may be tough on the creators but it is undoubtedly going to guarantee a transparent relationship full of trust between the audience and creators which is beneficial for the community in the long run.”
As per the guidelines, disclosures should be placed in the endorsement message in such a manner that they are clear, prominent and extremely hard to miss.
The advertisements must contain truthful and honest representation, and should not mislead consumers by exaggerating the accuracy, scientific, validity, or practical usefulness or capability of performance of the product, the ministry said.
Rohit Agarwal, Founder & Director, Alpha Zegus said, “This development has been in the works since over a year now, but it’s finally starting to materialize now. It’s good hygiene to follow since there is a definite need to draw a clear demarcation between ‘endorsed’ and ‘recommended’. At present, most influencer ads are coming across as ‘personal recommendations’ without any indication of there being a monetary advantage to the influencer behind it. This becomes unfair to the audience, and they start losing faith in their creator – since they lose track of who the influencer ‘really’ is, and what they really use.”
On impact Rohit added, “We might see a drop in numbers (reach, engagement, etc.) for branded content, now that there will be a clear disclosure since the audience might just ‘skip the ad’ now that they know it. This might, in turn, cause a drop in creator fees for endorsements, as their fees are highly dependent on these data points. This can be avoided if the influencer finds more innovative ways to showcase the brand and make the branded content ‘enjoyable’ enough like their regular content.”
The new move obviously puts a restriction on the “organic” perception of influencer content, and frankly, it’s not going to be liked by a lot of marketers because declaring the arrangement with the brand damages the purpose of choosing influencers over performance marketing.
However, this move was needed. From some recent examples we saw that people aren’t owning up to the endorsements made by them and despite ASCI guidelines in place, a lot of aberrations were happening.
We at our end are now in the process of tightening our influencer marketing SOPs even further to ensure 100% compliance for brands and influencers.”
Shahir Muneer, Founder and Director, Divo said, “With ASCI guidelines in place, we have seen brands and influencers alike already keep disclosures prominent and active. I think there is close to 70% compliance at least in the top spectrum of top influencers and celebrities. But with the government further issuing these guidelines, and in relation to the Consumer Protection Act, there will have to be more diligence on the same.
I also foresee influencers and brands face risk of consumers filing litigation if failed to do so with more awareness coming to consumers and also if influencers or brands fail to instill this. Brands and Agencies will have to ensure they comply, as lot of influencers in the market are not legally savvy to know all these compliances, and will need their support to ensure they also do not fall into such risks.
Process-oriented brands and agencies with compliances will definitely implement this, even likely include this as part of their audit, agreements and furthermore.”
