India Introduces New Guidelines for Celebrities and Influencers
Source: Department of Consumer Affairs
India's Department of Consumer Affairs has introduced Endorsement Know-hows, a new set of guidelines for celebrities, influencers, and virtual influencers. They aim to ensure that individuals do not mislead their audiences when endorsing products or services and that they comply with the Consumer Protection Act, 2019 and any associated rules and guidelines.
Here are the key highlights:
Disclosures are required whenever there is a material connection between an advertiser and celebrity or influencer, including monetary or other compensation, free products with or without any conditions attached, contest and sweepstakes entries, trips or hotel stays, media barters, coverage, and awards or any family, personal or employment relationship.
Disclosures should be "extremely hard to miss" and should be placed in the content itself (e.g., superimposed over the image or video).
Endorsements must be made in simple, clear language and terms (e.g., advertisement, sponsored, paid promotion) and should be separate from platform disclosure tools.
Under the CPA, endorsers and advertisers can be penalized up to $12,300 (1 million Indian rupees) or up to $61,000 (5 million Indian rupees) for repeat offenses. They may also be prohibited from endorsing products or services for as long as three years. The department has also revealed that it is in talks with many social media platforms to leverage technology to identify offenders. However, consumers can file their own complaints if they wish.
India’s Influencer Marketing Industry
The guidelines come at a time when more businesses are turning to celebrities and influencers for their advertising needs in South Asian markets, like India. The influencer marketing industry in India is expected to reach as much as $345 million by 2025. According to a survey, over 34 percent of people in India say that they buy a product or service after seeing content from an influencer.
Why Creators and Brands Should Care
India isn’t the only one that has rolled out new or refreshed guidelines for influencers and cracked down on them. The U.S. Securities and Exchange Commission (SEC) has also taken action against celebrities and influencers. For example, they charged Kim Kardashian for unlawfully promoting a cryptocurrency and several finance influencers in an alleged $100M “pump and dump” scheme.
As the influencer industry continues to gain momentum globally, stricter regulations and stricter enforcement of guidelines are expected to be implemented to protect consumers. It is imperative for creators and brands to keep themselves updated with the latest regulations and adapt accordingly to maintain compliance and prevent penalties that can be quite costly.
