Govt Directs Influencers To Put Clear Disclaimers In Endorsements

The Department of Consumer Affairs on Monday released a set of guidelines for celebrities, influencers, and virtual influencers to put clear disclaimers in their endorsements on social media platforms.

The guidelines, called “Endorsements Know-hows!” , ask that endorsements must be made in simple, clear language, and terms such as “advertisement,” “sponsored,” “collaboration” or “paid promotion” should be used.

It also added that celebrities and influencers should not endorse any product or service that they have not personally used or experienced or in which due diligence has not been practiced by them. The guidelines are to prohibit the above category professionals from misleading audiences when endorsing products or services.

However, it is still not clear what term to use for what kind of partnership. So far, the guidelines have suggested to use any of the following disclosures “advertisement,” “ad,” “sponsored,” “collaboration,” or “partnership” for paid or barter brand endorsement.

Also, the disclosure terms must be indicated in a hashtag or in the headline text, per the guidelines.

What Influencers Must Know

Further, the guidelines specify that individuals or 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 must state if it’s a paid endorsement.

The disclosure needs to be clear, prominent, and extremely hard to miss while putting in the endorsement message, the guidelines noted. Further, such disclosures should not be mixed with a group of hashtags or links.

For endorsements in a picture, disclosures should be superimposed over the image, enough for viewers to notice, the guidelines stated. Additionally, for endorsements in a video or a live stream, disclosures should be made in both audio and video format and displayed continuously and prominently during the entire stream.

This is not the first time that the government has taken steps to regulate influencer marketing. Earlier in January, the Consumer Affairs Ministry for the first time had released endorsement guidelines under which it was said that social media influencers would have to pay hefty fines for violations.

Social media influencers would be liable to pay a fine of up to INR 10 Lakh for violation of the guidelines and the penalty can go up to INR 50 Lakh for repeated violations. However, the latest set of guidelines don’t mention anything on the monetary penalty.

The size of the social media influencer market in India stood at INR 1,275 Cr in 2022 and is expected to grow at a CAGR of 19-20% to reach INR 2,800 Cr by 2027, Department of Consumer Affairs Secretary Rohit Kumar Singh said in a press conference earlier.

It is pertinent to note that influencers came into the limelight for many wrong reasons last year. For example, social commerce unicorn Meesho sent legal notices to certain social media influencers for posting negative reviews about the startup on social platforms. Besides, online travel aggregator (OTA) EaseMyTrip also said that it was targeted by such coordinated campaigns and planned to take legal action against the perpetrators.

Add to it, the Securities and Exchange Board of India (SEBI) is reportedly looking at framing rules to govern influencers who dish out financial advice on social media platforms.