Consumer affairs ministry issues guidelines for social media influencers

Celebrities, influencers and virtual influencers will be subject to disclose their endorsements, the ministry stated

Celebrities and social media influencers will be required to disclose their material connections with a brand, service or company, including free products, contests and sweepstakes entries, trips or hotel stays, media barters, coverage and awards, in a fresh policy on ‘endorsements-know-hows’ announced by the ministry of consumer affairs on Friday.

When it comes to a picture, disclosures should be superimposed over the image enough for viewers to notice. (Representative image)

“The whole issue is centred around the consumer’s right to know. It is the responsibility of the endorser, celebrities and influencers or other advertisers to truthfully disclose whatever information the consumer must know before making any decision for purchase,” the ministry said.

Underlining the persons who should disclose the nature of their endorsements, Rohit Kumar Singh, secretary of the department of consumer affairs, said, “Individuals/groups who have access to an audience and the power to affect their purchasing decisions about a product, brand or service because of the influencer’s authority, knowledge, position or relationship with their audience.”

Celebrities, influencers and virtual influencers will be subject to disclose their endorsements, the ministry stated.

Influencers are defined as creators who advertise products with a strong influence on the decisions or opinions of their audience. Virtual influencers, which are defined as fictional computer-generated people with realistic features of humans, are also required to disclose their endorsements, the statement read.

The department noted, “When there is a material connection between an advertiser and celebrity/influencer that may affect the weight or credibility of the representation made by the celebrity/influencer.” These material connections include monetary or other forms of compensation, free products, contests and sweepstakes entries, trips or hotel stays, media barters, coverage and awards, or any personal, family or employment relationship.

Further clarifying the nature of material connections, the department cited an example saying, “Connections are not limited to money or products. If a celebrity holds a two per cent of stake in an agarbatti company and they are endorsing, now even if I’m receiving any money, but because I’m a stakeholder in the company, and I’m capable of influencing the buying decisions of the people, there’s a material connection, said Singh.

Underlining how influencers should disclose their endorsements, the department stressed that the advertisement should be hard to miss, where disclosures should be placed in the endorsement message in such a manner that they are clear, prominent and extremely hard to miss. Disclosures should not be mixed with a group of hashtags or links for video content.

When it comes to a picture, disclosures should be superimposed over the image enough for viewers to notice, whereas, for video content, disclosures should be placed in the video and not just in the description. Disclosures should be made in both audio and video format.

Regarding a live stream, disclosures should be displayed continuously and prominently during the entire stream. Concerning the language of the disclosure, the department underlined the importance of simple and clear terms for disclosures.

On limited space platforms like Twitter, terms such as ‘XYZAmbassador’ (where XYZ is a brand) are also acceptable to the consumer affairs department. Allowed terms include advertisement’, ‘ad’, ‘sponsored’, ‘paid promotion’, or ‘paid.’ Disclosures and endorsements are required to be in the same language.

“Celebrities/influencers are always advised to review and satisfy themselves that the advertiser is in a position to substantiate the claims made in the advertisement. It is also recommended that the product and service must have been actually used or experienced by the endorser,” said the department.

Also laying down a note of caution for influencers or celebrities, the department noted should they fail to disclose any material connection or noncompliance with the Consumer Protection Act 2019 and the Rules made thereunder would make such violators liable for strict action under the law.

The Consumer Protection Act 2019 provides the framework for protecting consumers against unfair trade practices and misleading advertisements.