The Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution has published (on January 20, 2023) guidelines to be adhered by influencers and celebrities in respect of endorsements on social media platforms.

The guidelines are primarily applicable on individuals/groups who have access to an audience and the power to affect their audiences’ purchasing decisions or opinions about a product, service, brand or experience, because of the influencer’s/celebrity’s authority, knowledge, position, or relationship with their audience. While theoretically this applicability would be acceptable, it would have been preferable for the government to specify the threshold of ‘access to an audience’ in some manner. While the guidelines attempt at providing a clarification by specifying that creators would be ones who advertise products and services ‘with a strong influence’ on the purchasing decisions or opinions of their audience, it doesn’t specify the criterion/manner for/of determination of presence of a ‘strong influence’ by a creator. In absence of specification of this threshold/criterion, there would be ambiguity on whether or not an individual with minimal followers (for instance 100) would be required to comply with these guidelines or not.

Meanwhile, it goes without saying that the government has adopted a progressive stance by ensuring that these guidelines are also applicable to ‘virtual influencers’ which have been identified as - fictional computer generated ‘people’ or avatars who have realistic characteristics, features and personalities of humans, and behave in a similar manner as influencers. The inclusion of this category ensures that a loophole of avoiding compliances with these guidelines (by adopting virtual avatars by human influencers) is effectively plugged.

Similar to the requirements under the guidelines published recently by the ASCI (Advertisement Standard Council of India), the government has also gone ahead with usage of the concept of a ‘material connection’ (between an advertiser and a celebrity/influencer) to determine the scenarios in which the requirements under these guidelines would require compliance by a celebrity/influencer. The guidelines state that a ‘material connection’ would be something that may affect the weight or credibility of the representation (or a product or a service) made by the celebrity/influencer. The guidelines also provide the following non-exhaustive list of benefits and incentives which would establish the existence of a material connection:

As regards the manner of disclosure, the guidelines generally specify that disclosures should be placed in the endorsement message in such a manner that they are clear, prominent and extremely hard to miss and that they shouldn’t be mixed with a group of hashtags or links (which could reduce the clarity of disclosure by the endorser). The guidelines also contain the following requirements for disclosures in pictures, videos and live streams:

The guidelines are also progressive in the sense that they recognise the difference in the format (and limitation) of publication of content on various platforms. For instance, the guidelines state that terms such as 'XYZAmbassador' (where XYZ is a brand) are also acceptable as adequate disclosures on platforms like Twitter which has limitations on number of characters in the content being published.

Further, while the ASCI guidelines permitted a relatively large number of terms which could be used for disclosures, the guidelines by the Government have only permitted the usage of - ‘advertisement’, ‘ad’, ‘sponsored’, ‘paid promotion’ or ‘paid’ as the appropriate terms. The guidelines also specify that disclosures and endorsements should be in the same language (which again plugs a loophole which could be used by influencers).

The guidelines also take a step forward to put the onus on the influencers by requiring them to insert separate disclosures (apart from the tools provided by the social media networking platforms). The onus doesn’t stop here – the guidelines further require celebrities/influencers to review and satisfy themselves that the advertiser is in a position to substantiate the claims made in the advertisement. Further, interestingly (yet practically difficult to verify or enforce), the guidelines also recommend (but not mandate) that the product and service must have been actually used or experienced by the endorser.

As regards the violation of the guidelines, it is specified that failure to disclose any material connection or non-compliance of the Consumer Protection Act, 2019 (and Rules made thereunder) would make such violators liable for strict action. In simpler words, guidelines don’t contain any penal provisions (but simply refers to the ones under the overarching statute).

The guidelines can be accessed at - https://consumeraffairs.nic.in/sites/default/files/filefield_paths/Endorsement_Know-Hows.pdf.

Authored by Gaurav Bhalla of Ahlawat & Associates.