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Social Media Influencer – Legal Implications

October 13, 2020

By Vikrant Rana and Isheta Srivastava

In the recent past, social media marketing has witnessed an enormous increase. This has given birth to a bandwagon of social media influencers, who spend hours in creating content and doing various other activities such as endorsing, reviewing or advertising a brand. Influencer marketing can be understood as a type of marketing that focuses on using key leaders to drive the brand’s message to the larger market, rather than marketing directly to a large group of consumers, the brand instead inspire/hire/pay influencers to get out the word for it.[1]

As per a report titled, ‘The State of Influencer Marketing 2019: Benchmark Report’ by Influencer Marketing Report revealed that the outlook for influencer marketing is extremely positive[2]. It further showed that 92% of consumers believed that influencer marketing was an effective form of marketing.[3] Therefore, with the increase in the industry, various issues in this regard have also elevated.

This article goes through various legislations that the government has enforced in the best interest of the consumers. Additionally, it also reiterates some of the points that an influencer must keep in mind while making a decision to endorse or advertise goods/services of a particular brand.

Like any other form of advertising the purpose of getting endorsements from the influencers is to help the consumer in making an informed choice. However, there have been some instances in the past where these social media influencers were called out for some negative effects of the endorsed product. Therefore, the regulating bodies are now taking steps to regulate the bandwagon of social media influencers in order to balance and protect the interests of the members of the purchasing public.

Endorsement and Advertisements by Influencers- The Law

  1. The Consumer Protection Act, 2019 – The Consumer Protection Act, 2019 (hereinafter referred to as ‘the Act’) notified on August 9, 2019. Alongwith certain other changes, the Act also focusses on misleading advertisements and endorsements by celebrities that also includes 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 up to INR 10 lakh and repeat offenders can be fined up to INR 50 lakh.[4] This is the very first legislation that emphasizes on targeted advertising, market campaigns through influencers[5], as the Ministry has repeatedly felt that advertisements by celebrities and influential personnel can take a negative turn and harm the consumers. There have been instances where advertisements may have become misleading while making it attractive for the consumers.
  2. The Draft Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) – In addition to above regulation, the Ministry of Consumer Affairs have released in September 2020, the Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) (hereinafter referred to as ‘the Draft Guidelines’) to keep a watch on all kinds of endorsements and endorsers irrespective of the medium. With the influencer industry growing, a lot of micro influencers have been advertising for personal reasons of self-growth and money, ignoring the interests of the purchasing public. Hence, to keep a tab on this the Ministry have made it mandatory to conduct a due diligence on the product or at least research on the facts of the product before endorsing or advertising it, for the sole purpose of authenticity and the best interest of the public. Though these guidelines are yet to come in force but will soon be implemented. Thus, it is important for the social media influencers to know about the guidelines.
  1. The Code for Self-Regulation of Advertising – The Advertising Standards Council of India (ASCI) has established the Code for Self-Regulation[6] (hereinafter referred to as ‘the Code’) 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 helps maintain the authenticity of the advertisement content. Also, as per certain reports the ASCI is in the process of framing disclosure rules for social media influencers who promote products on the internet. In its bid to protect consumer interest, the advertising regulator is framing guidelines basis international best practices to enable end-users make informed decisions regarding their purchases online.[7]

Certain Key Points to be kept in mind by Social Media Influencers to avoid any legal liability

Every player in the marketing industry, including the consumers, manufacturers, brands have become a part of the Influencer Industry. A brand is endorsed by an influencer, the influencer advertises to influence a consumer so as to make a purchase decision, etc. Therefore, having to be a part of such a dynamic industry, the social media influencers, being the key players of it, ought to keep in mind multiple aspects while deciding upon a brand that they desire to endorse or advertise.

The very first thing to be kept in mind and is of utmost importance is that DUE DILIGENCE is social media influencer’s best friend. Due Diligence in simple words can be understood as the care that a reasonable person exercises to avoid harm to other persons or their property.[8] For a social media influencer, it would entail doing every possible thing to be sure of the claimed authenticity, quality & safety of a product before endorsing it.

Apart from this, below is a non-exhaustive list of the points that may guide the extent and limits of an influencer for their key job:

  1. The social media influencer ought to do a background check and research on the brand and the product being endorsed or advertised.
  2. Every celebrity or influencer ought to ensure that their advertisement does not violate any provisions of the applicable legal regulations.
  3. The representation of the opinion or preferences of the influencer should portray its genuineness.
  4. The influencer, while endorsing or advertising ought to put a disclaimer regarding the personal preference, so the consumer is well aware, and can do a further personal research on the product.
  5. The influencers must avoid the practice of generalizing a product for all types of consumers.
  6. If the post made by the influencer is a result of a paid partnership with the brand, please disclose it.[9]
  7. Make the difference between the personal opinion about products and the endorsement views very visible and known to the viewers. Using hashtags may also help, such as #ad, #sponsored, #paidpromotion.[10]
  8. It is advisable to have a written contract in place for any endorsements done. This contract should clearly define the rights and liabilities in place.
  9. Before endorsing a product that affects public health and wellness, it is advisable to pay particular attention to what product claims are being made and are the claims backed by proper and authentic evidences.

[1] https://www.tapinfluence.com/blog-what-is-influencer-marketing/

[2] https://influencermarketinghub.com/influencer-marketing-2019-benchmark-report/

[3] https://www.business2community.com/marketing/the-rise-of-influencer-marketing-and-what-to-expect-in-2020-02318375

[4] https://www.marketingmind.in/social-media-influencers-can-now-be-sued-upto-rs-50-lakh-heres-why/

[5]https://www.mondaq.com/india/dodd-frank-consumer-protection-act/877176/consumer-protection-laws-influencers-be-aware

[6] https://www.ascionline.org/images/pdf/code_book.pdf

[7] https://www.businesstoday.in/current/corporate/social-media-influencer-to-be-soon-on-advertising-regulators-radar-asci-advertising-standards-council-of-india/story/383739.html

[8] https://www.merriam-webster.com/dictionary/due%20diligence

[9] https://www.artistiklicense.org/post/what-every-influencer-in-india-ought-to-know-right-now

[10] Ibid

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