–Advocate Karan Parihar, Rajasthan and Gujarat High Court

Who is an influencer?

  • He is someone who has the power to affect the purchasing decisions of others because of his or her authority, knowledge, position, or relationship with his or her audience.
  • Influencers often have a large following of people who pay close attention to their views. They have the power to persuade people to buy things, and influencers are now seen by many companies as a direct way to customers’ hearts.

Who is a social media influencer?

The term ‘social media influencer’ may usually be used to refer to an individual, including a celebrity, whose services are retained by an advertiser, for the purposes of promoting their products including goods and services, through social media platforms lie Facebook, Instagram, Youtube etc. These individuals may in certain cases have millions of followers and are in a position to influence the purchasing decisions or opinions of their audience.

Liability of Social Media Influencers under Indian Law:-

Social Media Influencer is liable for false and misleading advertisements under The Consumer Protection Act, 2019 (Act) read with Central Consumer Protection Authority’s ‘Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022’ (CCPA Guidelines).

The CCPA Guidelines prescribe the following requirements on social media influencers while endorsing a product or service:

(a)  conducting due diligence on the product/ services for endorsement of advertisements by:

(i) ensuring that the endorsement reflects the genuine and reasonably current opinion of the endorser;

(ii) ensuring that the endorsement is based on adequate information or experience with the goods, product or service; and

(iii) the endorsement is not otherwise deceptive in any form or manner; and

(b)  disclosing any material connection between the endorser and the advertiser.

Punishment for False or Misleading advertisements-

The CCPA may impose a penalty of up to INR 1 million on endorsers for false or misleading advertisements in case of first offences, whereas a penalty of up to INR 5 million may be imposed for subsequent offences.

Further the CCPA may prohibit endorsers from making endorsement of any product or service for a period of 1 year for first offences, which may be extended to 3 years, in case of subsequent violations of the Act and / or the CCPA Guidelines.

Advertising Standards Council of India Council (ASCI

Additionally, Advertising Standards Council of India Council (ASCI) ASCI has also issued the Guidelines for Influencer Advertising in India (ASCI Guidelines). ASCI is a voluntary self-regulatory organization and the codes and guidelines released by the ASCI are non-binding in nature.

The ASCI Guidelines also prescribe requirements to be followed by social media influencers while making endorsements where they have a material connection with the advertiser.

Moreover, Social media influencers should comply with the following requirements proscribed under ASCI:

(i) adding upfront and prominent disclosure labels to all promotional posts/ advertising content identifying such posts or content as advertisements; and

(ii) conducting due diligence of the product/ services prior to making any endorsement to ensure that the advertiser can substantiate its claims.

Complaint Mechanism under ASCI

Although a consumer complaints committee has been constituted by ASCI, the same only acts as a body for ‘self-regulation’. Further, even if ASCI finds merit in a complaint, it can only recommend the social media influencer to remove or alter the advertisement but has no mechanism to compel removal of the advertisement, grant any interim relief, or award damages.

Conclusion

It is recommended that a social media influencer should comply with the conditions prescribed under the ASCI Guidelines, in order to avoid any reputational harm arising out of any complaints received and processed by ASCI, as well as to comprehensively satisfy the due diligence requirements prescribed under the Act and the CCPA Guidelines.

Therefore, it is extremely critical for social media influencers to comply with the requirements under the CCPA Guidelines before endorsing any product/ service.

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