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Draft Consumer Protection Law Set To Turn Tables On Social Media Influencers

Draft Consumer Protection Law Set To Turn Tables On Social Media Influencers

The draft law suggests that the onus of ensuring the veracity of claims made in advertisements could fall upon influencers

The govt’s move is aimed to prevent false or misleading advertisements and ensure that diligence to be carried out for endorsements

Move likely to hit business for social media influencers already smarting under TikTok ban

Social media influencers and digital marketers could face the head as the onus of ensuring the veracity of claims made in advertisements could fall upon them soon.

The draft guidelines called Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Guidelines, 2020 was issued by the Central Consumer Protection Authority for the prevention of false or misleading advertisements and the due diligence to be carried out for endorsements.  

The government’s draft new guidelines targeted to prevent misleading advertisements has an entire section on due diligence to be made by endorsers. It has sought feedback on the guidelines before September 18, reported ET.

“When a celebrity endorses something, the understanding is that consumers take it with some kind of authenticity. Therefore, what are the safeguards that celebrities need to take into account, and what are the expectations from them — has been explained,” said Leena Nandan, Secretary, Department of Consumer Affairs.

However, in the aftermath of the coronavirus outbreak, as marketing budgets grow thinner, earnings of social media influencers have also dropped by about 60-70%, says Amit Nagpal of Bloggers Alliance.

The India Influence Report by Zefmo also found that 95% of influencers foresee a dip in their earnings in 2020 due to Covid-19  impact on the overall industry. This goes against the grain of what Indian influencer’s earned in 2019. Earnings as social influencers reportedly crossed $1Bn last year, making it a viable profession for millions across the country.

Speaking about the proposed legislation, Neel Gogia, cofounder of Iplix Media told ET, “As per the proposed rules influencers may have to do more research into the brands they endorse. Most of the influencers trust the brief given by the brand and promote it without any research. We can also expect influencers to be selective about their associations and work with brands where they are comfortable with the product/service which the brand is offering.” 

Social influencers have already taken a hit in India after the government banned TikTok. According to Zefmo CEO Shudeep Majumdar, influencers will now have to slug it out for a piece of the hyper-competitive market on Facebook, Instagram and YouTube. “It will be back to basics and building their following from scratch,” Majumdar said.