Norms to check misleading ads by social media influencers likely soon

Will include strict penal provisions, will have far-reaching impact, say experts

The Centre will soon come out with detailed guidelines for social media influencers that could include penal provisions under the Consumer Protection Act, senior officials have told Business Standard.

These provisions will include a penalty of Rs 10 lakh for first-time offenders, which could extend to Rs 20-50 lakh for repeat offenders.

The guidelines, which will be released in the next 7-10 days, will also make it mandatory for social media influencers to make disclosures about paid promotions for a brand. Or, they will have to disclose if they have any kind of monetary interest or otherwise in the product or service they are promoting.

The government had come out with similar rules in June for celebrity endorsements putting in place stringent provisions to check misleading advertising and marketing communication by star endorsers.

“The (social media) guidelines will be under the provisions of preventing misleading advertisements and fake advertisement rules of the Consumer Protection Act,” a senior official said.

Social media influencers found to be writing fake reviews or endorsing fake products for a consideration or even using their vast fan following to promote any brand without adequate checks and balances will be strictly dealt with, the official said.

“The guidelines have been framed after extensive consultation with all stakeholders that also include companies, brands and representatives from digital platforms where such influencers are found to be very active,” a participant at one of the meetings said.

The move could have far-reaching implications, said Shweta Purandare, advertising compliance expert and former secretary-general of the Advertising Standards Council of India (ASCI). This is because influencer marketing is an emerging segment in India.

“It is also a market, which is difficult to track because of the nature of social media itself. A social media personality with even a small base of followers could create content that could go viral and influence a larger audience. You also have a situation where influencers are emerging in almost every category. There is a need for a strong framework to check misleading advertising in the space,” she says.

Digital marketing agencies peg the influencer marketing segment in India to be around Rs 1,500 crore in size, growing fast on account of the expanding reach of social media.

While ASCI had released guidelines last year for social media influencers, the definition of an ‘influencer’ remained broad.

The self-regulatory body defined an ‘influencer’ as 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. This is because of the influencer’s authority, knowledge, position, or relationship with their audience, ASCI said.

This is in contrast to the treatment of influencers adopted in some other markets, legal experts said. For instance, the UK’s Advertising Standards Authority has held that having 30,000 followers on social media would render the individual as an influencer.

Legal experts said that the central government’s intervention now in the area could help rein in misleading influencer marketing, with penal provisions acting as a strong deterrent against them.