New Rules For Influencers: Social Media Influencer can Fined upto Rs.50 Lakh for False Advertisement

The Government mandated that social media influencers disclose all “material” interests, including as gifts, hotel accommodations, equity, discounts, and rewards, when supporting any products, services, or schemes, or face strict legal action, including a ban on endorsements, on Friday.

The disclosures should be in plain and straightforward language, should be of sufficient length to be noticed, should be accompanied by endorsements, including live streaming, and should be platform neutral.

The regulations are part of ongoing attempts to combat deceptive marketing and protect customers’ interests in the midst of a growing social influencer business, which is expected to increase 20% yearly to reach Rs.2,800 crore by 2025.

The Department of Consumer Affairs has announced new guidelines titled ‘Endorsement Know Hows – for celebrities, influencers, and virtual media influencers (Avatar or computer generated character) on social media platforms’.

In the event of a violation, the Consumer Protection Act 2019 penalty for deceptive advertisement will apply.

The Central Consumer Protection Authority (CCPA) has the authority to fine manufacturers, advertisers, and endorsers up to Rs. 10 lakh. Penalties of up to 50 lakh might be applied for repeated offences.

The CCPA can bar an endorser of a deceptive commercial from making any endorsement for up to a year, and for future violations, the restriction can be extended for up to three years.

Consumer Affairs Secretary Rohit Kumar Singh announced the rules at a press conference, saying they were given under the CCPA, which provides a framework for protecting consumers from unfair trade practises and deceptive ads.

The new guidelines have specified who all need to disclose, when to disclose and how to disclose. 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 will have to disclose.

He hoped that the guidelines would act as a deterrent for social media influencers.