By Rupin Chopra and Vidhi Oberoi
Advertisements today are no longer limited to traditional media like print, television, or radio. With the increasing reach of digital platforms such as Facebook, Instagram, and Twitter, there has been a rise in the influence of virtual influencers in addition to celebrities and social media influencers. This probably has led to an increased risk of consumers being misled by advertisements and unfair trade practices by these influencers.
Existing Regulations on Advertisements
It cannot be said that the concern has been unanswered so far, there already exist certain regulations that attempt to regulate and govern misleading and deceptive advertisements by celebrities and influencers which include:
- The Consumer Protection Act, of 2019 which was enacted to protect consumers from unfair trade practices and deceptive advertisements and endorsements by celebrities that also include social media influencers. If an influencer has not informed that it is a paid promotion and intentionally lying about the product that it is good when it is not, followers can sue the influencer for misleading advertising for upto INR 10 lakh and repeat offender up to INR 50 lakh.
- Guidelines for Advertisements and Endorsements for Misleading Advertisements, 2022- These guidelines were issued by the Central Consumer Protection Authority (CCPA) on June 9, 2022 to protect consumers from claims and promises from advertisements that are misleading and baseless.
- The Guidelines are in alignment with the guidelines set by the Consumer Protection Act, 2019 that were enacted to protect consumers from unfair trade practices and deceptive advertising. These Guidelines named ‘Guidelines for prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 published on June 9, 2022. These Guidelines of June 9, 2022 outline the criteria for valid advertisements and the responsibilities of manufacturers, sellers, advertisers and also touch upon the celebrities and endorsers. Furthermore, failure to disclose any material connection or non-compliance of the Consumer Protection Act 2019 and Rules made thereunder would attract penalty upto Fifty (50) Lakhs.
- The Code for Self-regulation of Advertising – The Advertising Council of India (ASCI) has established the Code for Self-regulation, with a view to achieve the acceptance of fair advertising practices in the best interest of the consumers. The Code includes a series of rules and regulations that help maintain the authenticity of the advertisement content.
The Department of Consumer Affairs under the Ministry of consumer Affairs, Food and Public Distribution released a guideline named, ‘Endorsement Know-hows!’ (hereinafter referred to as the “Guidelines”) for celebrities, influencers and virtual influencers on social media platforms on January 20, 2023 with the aim to ensure that the celebrities and influencers do not mislead their audiences when endorsing products or services and the endorsements are in compliance with the Consumer Protection Act and associated rules.
The Guidelines require that the celebrities, influencers and virtual influencers (fictional computer generated characters having features and personalities of humans) who have access to audience and the power to affect their purchasing decisions and opinions shall display disclosures about the ‘material connection’ between the advertiser and celebrity/influencer that is likely to affect the weight or credibility of the endorsements made by them.
What is Material Connection?
Material connect could possibly include, but is not limited to, benefits and incentives, such as:
- Monetary or other compensation;
- Free products with or without any conditions attached including those received unsolicited, discounts, gifts;
- Contest and sweepstakes entries;
- Trips or hotel stays;
- Media barters;
- Coverage and awards;
- Any family, personal or employment relationship
Further, the Guidelines specify that the disclosures shall be prominently and clearly displayed in the endorsement, making declarations hard to miss and should not be mixed with a group of hashtags or links.
Additionally, the Guidelines further require the disclosures to be made with respect to the manner and form of advertisement, such as:
- The endorsement in a picture – disclosures should be superimposed over the image enough for audience to notice;
- The endorsement in a video – disclosures to be placed in the video and not just in the description and moreover, should be made in both audio and video format;
- The endorsement in a live stream – disclosures should be displayed continuously and prominently during the entire stream.
The Guidelines are in alignment with the guidelines set by the Consumer Protection Act, 2019 that were enacted to protect consumers from unfair trade practices and deceptive advertising. These Guidelines named ‘Guidelines for prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022.
The Guidelines entail that the endorsements made must be in simple, clear language and terms such as ‘advertisement’, ‘sponsored’, or ‘ paid promotion’ can be used. The Guidelines further, advise the Celebrities/Influencers to do proper due diligence and satisfy themselves that the advertiser is in a position to substantiate the claims made in the advertisement and also ensure that the product or service is actually used or experienced by the endorser.
Recently, a body of nutrition experts from the National Advocacy in Public Interest (NAPI) have written to Amitabh Bachchan against his endorsement of biscuit brand as ‘deceptive’ and ‘misleading’. The representation cited that the said advertisement for the biscuit brand misleads consumers by equating and unhealthy, pre-packaged food product with real foods like ‘atta roti and a glass of milk.’ It was also noted that the product contains high sugar and fat ingredients and increased consumption of these biscuits may contribute to obesity in children.This incident aptly brings out the role of due diligence while endorsing products to consumers particularly when such products are equated with home-cooked food and target audience being children.
Social Media sites/apps have emerged as a strong marketing and advertising platform owing to the popularity and wide variety of content available thereby giving new dimensions to digital marketing. This though has contributed to the creation of economic benefits for content creators but also poses risk of increasing misleading advertisements since customers often tend to get influenced by the products and services endorsed by celebrities and influencers. This, thus, necessitates mandatory compliance with the Guidelines for certain disclosures to be made while endorsing any product or service so as to ensure transparency in best interest of consumers and any non-compliance would attract penalties set in accordance with the Consumer Protection Act, 2019.
Rachita Thakur, Junior Associate at S.S. Rana & Co. has assisted in the research of this article.