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The Centre on Friday issued guidelines for social-media influencers, including celebrities and virtual avatars, for disclosing the promotional content of the products or services they endorse and their material connections with those.
“Material connection” with a brand covers monetary benefits, hotel stay, awards, employment relationships, sweepstakes entries, and media barters.
This is in accordance with the Consumer Protection Act, 2019, which provides the framework for protecting consumers against unfair trade practices and misleading advertisements.
The Ministry of Consumer Affairs, during a press conference, unveiled the guidelines, which align with those given by the Advertising Standards Council of India (ASCI).
On non-compliance with the guidelines, endorsers may face penalties including a fine up to Rs 10 lakh, which can go up to Rs 50 lakh on recurring violations.
Influencers and celebrities can be debarred from endorsements on repeated infringements and may go to jail for six months, which can be extended to two years, ministry officials said.
Individuals or groups with access to an audience and have the power to affect its purchasing decisions or opinions about a product, service, brand or experience should disclose their material connections that may affect the weight or credibility of the representation made by them, said Rohit Kumar Singh, secretary, Department of Consumer Affairs.
The secretary told reporters the size of the social-media influencer market in India last year was Rs 1,275 crore and by 2025, it was likely to be Rs 2,800 crore.
There are more than 100,000 social-media influencers of substance, and this calls for a check, he added.
The guidelines said the disclosures and endorsements should be in the same language. Also, in the case of limited space platforms like Twitter, hashtags with short terms like “ad”, “sponsored”, and “paid” are acceptable.
In picture endorsements, disclosures should be superimposed on the image big enough for viewers to notice them, whereas for video content, they should be placed in the video and not just in the description. It should be in both the audio and video formats.
However, in livestreams, disclosures should be displayed continuously and prominently.
Highlighting the guidelines, Nidhi Khare, additional secretary, department of consumer affairs, said disclosures should be hard to miss and should not be mixed with a group of hashtags or links.
“The whole issue is of consumers’ right to know. Therefore, the responsibility of the endorsers or other advertisers is to honestly disclose the information that consumers must know before making any purchasing decisions,” she said.
Influencers not disclosing their material connections with their products or services will be in accordance with the rules only if they had used or experienced them in the past.
“We hope it becomes a deterrent, but if further non-compliance takes place, then under the law, there are provisions. People can approach the authorities and seek legal action against (violators),” the secretary said.
The department is in talks with tech companies to deploy some mechanism or algorithms to identify recurring transgressions.
The Nutrition Advocacy in Public Interest (NAPi) welcomed the government’s move and said the provisions of disclosing material connection were an objective step to define the term “misleading”, and maintain transparency.
NAPi consists of independent doctors.
Misleading consumers on any grounds is an offence but when it is about food/drink, especially for children, it can be dangerous, said Arun Gupta, convener, NAPi.
High fat, sugar, salt (HFSS) and other additives are critical ingredients that are usually concealed by companies in advertisements, he said.
“As long as there is no health-warning law regarding such products, the authorities must take suo motu action against ads of HFSS food/drink, based on guidance from the World Health Organization,” he added.
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