By Rupin Chopra and Apalka Bareja
Marketing in India
Introduction
In recent times, the social media and digital platforms have made celebrities, influencers and endorsers more powerful in influencing what consumers buy. Recognizing this profound impact, regulatory bodies worldwide have increasingly scrutinized the practices of misleading advertisements to ensure transparency and authenticity in advertising. However, the issue of misleading advertisement is not a new phenomenon. For years, both traditional and digital media have seen numerous instances where advertisements have manipulated facts, or presented false information to entice consumer. Notably, the issue has once again resurfaced in the case of Indian Medical Association vs Union of India[1] . The Hon’ble Supreme Court, in the present case, has issued a stringent direction to influencers and endorsers, signaling a pivotal shift in accountability for false and misleading advertisements, by clearly stating that the influencers and endorsers will be now held accountable for issuing false and misleading advertisements[2] . Moreover, the Hon’ble Supreme Court has made it mandatory for advertiser/advertising agency to submit a self-declaration in line with the Rule 7 of the Cable Television Networks Rules, 1994 [3] . The Hon’ble Supreme Court’s direction[4] reinforces the notion that trust and credibility are an important asset in today’s competitive market place. Overall it represents a pivotal moment in the ongoing evolution of advertisement regulation and consumer protection. This article delves into the key highlights of the recent order given by the Hon’ble Supreme Court and laws in India regulating the influencer advertisement, a comparison of laws of USA, UK and India regulating the influencer advertisement.
Key Highlight of the recent order:
- The Hon’ble Supreme Court has made it clear that the influencer should act with a sense of responsibility while endorsing any product and must adhere to Guidelines 8, 12, and 13 of the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022. For more details please refer to: https://ssrana.in/articles/popular-chocolate-malt-beverage-and-competitors-loose-health-drink-status/#:~:text=As%20the%20term%20%E2%80%9CHealth%20Drink,on%20their%20respective%20platforms%2Fsites.
- The Hon’ble Supreme Court has highlighted the lack of any robust mechanism to ensure that the advertiser abide by the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022. Keeping in view such deficiency it has been made mandatory that before any advertisement is printed/aired/displayed, a self-declaration is required to be submitted by the advertiser/advertising agency in line with Rule 7 of the Cable Television Network Rules, 1994.
- Moreover, every declaration required to be made shall be submitted by the advertiser/advertising agency on the Broadcast Sewa Portal run by the Ministry of Information and Broadcasting.
- Moreover, every declaration required to be made shall be submitted by the advertiser/advertising agency on the Broadcast Sewa Portal run by the Ministry of Information and Broadcasting.
Laws in India regulating the Influencer Advertisement
The core principle governing influencer advertising in India revolves around disclosures. India has implemented guideline to regulate the influencer advertising, reflecting the country’s commitment to ensuring transparency and honesty in marketing practices, such as:
- Guidelines for Influencer Advertising in Digital Media, 2021
To prevent the abuse and exploitation of consumer trust, the Advertising Standards Council of India (ASCI), has established Guidelines for Influencers Advertising in Digital Media[5] (hereinafter referred to as “Influencer Guidelines”). These guidelines serves as a proactive measure to ensure transparency and honesty in influencer advertising. For further information please refer to: https://ssrana.in/articles/new-endorsement-guidelines-social-media-influencers/, https://ssrana.in/articles/social-media-influencers-advertisement/ - Definition of “Influencer”: An influencer is someone who has 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 authority, knowledge, position, or relationship with their audience. [6]
- Disclosure Format: :Social media platforms offer various formats for influencers to promote products or services, like stories, posts, reels, podcast or livestreams etc. Each format needs a specific disclosure label, according to the Influencer Guidelines. These are as follows:
- Photos/Videos: The disclosure in case of photos or video should be superimposed over the picture/video, so that it is convenient for the consumers to see it instantly.
- For videos exceeding 15 seconds and less than 2 minutes- on screen text for at least a third of the duration of the video.
- Videos for 15 seconds or less- minimum of 3 seconds
- Videos which are 2 minutes longer or more- disclosure label to stay for the entire duration of the video
- Livestreams: The disclosure needs to be mentioned at the start and the end and also in the caption if the stream remains on the influencer’s profile.
- Audio: The disclosure should be announced at the beginning and at the end of the audio media. In case, any break is taken, it should be made before and after every break.
- Photos/Videos: The disclosure in case of photos or video should be superimposed over the picture/video, so that it is convenient for the consumers to see it instantly.
- Due-Diligence:Influencers must responsibly verify the claims made by the advertisers in the promoted advertisements to ensure their accuracy. The Consumer Protection Act, 2019 holds the influencers accountable for participating in misleading advertisements unless they can prove that they diligently checked the claims’ validity[7] . Consumers have the right to file complaints against influencers for endorsing misleading advertisements, leading to potential penalty by the Central Consumer Protection Authority.
- Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022
Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 [8] issued by the Central Consumer Protection Authority (CCPA) serves as vital frameworks to safeguard consumer interests and ensure the integrity of advertising practices.
Key Highlights:
Rule 13 of the guidelines states that due diligence is required for endorsement of advertisement. According to this rule, any endorsement made in the advertisement must reflect the genuine and current opinion of the individual, group or organization making the endorsement and it must be based on the adequate information or adequate experience with the product or service and must not be deceptive.
Laws in United States of America, United Kingdom and India regulating the Influencer Advertisement
The regulations of influencer advertisements has become a focal point in the legal landscapes of India, UK and USA, reflecting a global effort to ensure transparency and protecting the consumers in digital age.[9]
| Country | Regulations | Regulatory Authority | Material Disclosure | Manner of Disclosure | Hashtags to be used | Penalties |
|---|---|---|---|---|---|---|
| India | Guidelines for Influencer Advertising in Digital Media, 2021 | 1.The Advertising Standards Council of India (ASCI)
2.Central Consumer Protection Authority (CCPA) |
Influencer must disclose any financial, personal or family relationship with the brands when endorsing the products or services | Disclosure should be prominent, easily noticeable and must be in a language that is easily understandable by the consumers. | “#AD”, “#ADVERTISEMENT” “#COLLABORATION” |
The contravention of guidelines may attract imposition of a fine which can be extended to Rs. 10,00,000/- along with an imprisonment for 2 year. For every subsequent offence, the fine may be increased to Rs. 50,00,000/- along with an imprisonment for 5 years. |
| United States of America | Federal Trade Commission (FTC) | Disclosures 101 for Social Media Influencers | Influencers are required to disclose material connection with the brand. | The disclosure should be prominent, easily noticeable and easily understandable by the consumers. | “#AD”, “#ADVERT” “#SPONSORED |
1. Not-complying with the guidelines may attract a civil law suit such as orders to cease and desist, along with fines extended up to USD 43,792 per violation.
2. Injunctions by federal district courts. 3. Violation of Commissions rules could result in civil penalties of up to USD 40,654 per violation etc. 4. Further violations of court orders could result in civil or criminal contempt proceedings. |
Conclusion
In conclusion, influencers are now being held accountable for misleading advertisements following a crucial Hon’ble Supreme Court direction. This direction mandates greater transparency and honesty, reinforcing the longstanding need to address misleading advertisement practices that have persisted across various media for years. The Hon’ble Supreme Court has also made it mandatory for advertising agencies/ advertiser to file a self-declaration, ensuring that all promotional content adheres to the stringent ethical standards. This move marks a significant step towards enhancing consumer protection and fostering integrity in the advertising industry. While the Supreme Court order does not directly target influencers, it does signal a stricter approach towards misleading advertisements in India, thereby causing a ripple effect.
Ritvik Kashyap , Intern at S.S Rana & Co. has assisted in the research of this article.
[1] W.P. (C) No. 645/2022
[3] Available at: https://trai.gov.in/sites/default/files/CableTelevisionNetworksRules1994.pdf
[4] Available at: : https://webapi.sci.gov.in/supremecourt/2022/24832/24832_2022_11_1_52927_FinalOrder_07-May-2024.pdf
[5] Available at: https://www.ascionline.in/wp-content/uploads/2023/08/GUIDELINES-FOR-INFLUENCER-ADVERTISING-IN-DIGITAL-MEDIA.pdf
[7]See Section 21 of the Consumer Protection Act, 2019
[8] Available at: https://consumeraffairs.nic.in/sites/default/files/CCPA_Notification.pdf