Social media influencers, you might have to pay up to Rs 50 lakh fine if you don't follow these new rules

The Ministry of Consumer Affairs in a Press Conference today announced the endorsement know-how for celebrities and influencers for social media platforms.

These know-hows come under the guidelines for the prevention of false or misleading advertisements and making endorsements released by the Central Consumer Protection Authority in June 2022.

These guidelines aim to regulate the Indian influencer industry which is predicted to be valued at Rs 2,200 crore by 2025 and grow at a 25 percent CAGR as per a report by influencer marketing platform, Influencer.in and Social Beat. The regulation will be in terms of paid promotions by influencers.

Interestingly, as per the guidelines, the rules will be applicable on social media influencers, celebrities and even virtual influencers. A fine of upto Rs 10 Lakh which can be extended to Rs 50 Lakh and a stop from doing any endorsements further is what influencers will be charged with in case of non compliance of the guidelines.

As per the guidelines which under legal gambit are a part of the Consumer Protection Act, 2019 influencers are required to disclose their endorsements to the audience if they have material connection with the advertiser.

Material connection here can mean:

The influencer is getting paid for the promotion

Free gifts, discounts etc

Contests and Sweepstake entries

Trips and hotel stays

Media Barters

Coverage and awards

Any other personal, family or employment relationship

Being a stakeholder in the company.

The Ministry in the press conference also clarified how to disclose the endorsements.

The disclosure should be clear, hard to miss and should not be placed between many hashtags.

 If the endorsement is being done through a picture then the disclosure should be there in that picture.

If it’s a video endorsement then the disclosure should be there in the video, both in audio and video format.

Lastly if the endorsement is being done through a live stream then a ticker with the disclosure should run in the live stream.

Further as the disclosure, influencers should use the brand name that they are promoting and should write paid promotion or ad or sponsored to highlight easily that the particular post/video is an endorsement.

A good example of this can be a product/brand endorsed by an influencer through a video on social media platforms. Under this scenario the influencer is required to have the brand’s logo in the video, a ‘paid promotion tag’ in description and hashtags like #ad and #sponsored also in the description.

Influencers are also required to have due diligence under which they are requested to only review and endorse products which involve claims made by advertisers. “It has been requested that the product or service has been actually used or experienced by the advertiser,” read the guidelines.