It has been a longstanding practice for brands to engage in advertising using print media, broadcasting on televisions and nowadays, with the advent of technology, the internet has become a potent tactic for promoting a brand. Worldwide, brands have actively started collaborating with ‘social media influencers’ for marketing their products. Influencer advertising is amongst the latest trends of gaining publicity which is rapidly being adopted by all manufacturers, ranging from large-scale multinational producers to local businesses. Owing to the ongoing pandemic, usage of social media has increased manifold as people were homebound and in a constant search for entertainment. A large number of people took to Instagram and Facebook to launch their local businesses, while others started creating quality content. Generally speaking, an influencer is basically a person who influences others in their purchasing choices. The public starts looking up to social media influencers and basing their decisions on these influencers’ remarks, feedback, and experiences. A social media influencer builds up his/her reputation through active engagement with their accounts.

As digital marketing is becoming highly ubiquitous, it has become vital to regulate the same. More and more consumers are gaining access to advertisements on digital platforms. Opinions of the influencers regarding the products persuade or dissuade the consumers from purchasing that particular product. Therefore, in the interest of protecting the rights of the consumers, it is required that misleading advertisements or promotions are not made. A consumer has the right to be correctly informed about the quantity, quality and standard of products. In light of these considerations, the Advertising Standards Council of India (ASCI) has proposed to frame guidelines on influencer marketing to understand the peculiarities of these advertisements and the way consumers view them.

LAW GOVERNING ADVERTISEMENT AND ENDORSEMENTS BY INFLUENCERS

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The Consumer Protection Act, 2019 (COPRA, 2019) is the foremost and prominent statute applicable to advertisements on various media platforms. This Act is one of a kind being the first legislation bringing within its ambit the representations made using electronic media or records. Advertisements by influencers and celebrities impact large masses; any deceptive endorsement can harm many consumers at a time. Under the COPRA 2019, a misleading advertisement has been explicitly defined as an advertisement falsely describing the product or service or misinforms the consumers regarding the nature, substance, quantity or quality of such product or service. Rendering misleading representations as to the ‘quality, quantity, grade, composition, style or model’ of goods and services is an unfair trade practice that is punishable under the Act. If an influencer intentionally deceives persons by lying about the product’s usefulness and viability, a consumer motivated by such advertisement can make a complaint against such unfair trade practices. Under Section 89 of the COPRA, 2019, the penalty for making misleading advertisements that are prejudicial to the consumers’ interest is imprisonment for a term extending up to two years and a fine, extending to ten lakh rupees. In case of a subsequent offence, such a person shall be punished with imprisonment for a term that may extend to five years and a fine, extending to fifty lakh rupees.

In addition to the Act of 2019, the Ministry of Consumer Affairs notified draft guidelines titled the Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Guidelines, 2020. Under these guidelines, an endorser of a product or service must mandatorily observe due diligence concerning the representations made by her/him. The endorser must ascertain that their endorsement does not convey any express or implied representations that would be false, misleading or deceptive. Furthermore, the standard of due diligence has also been provided in the guidelines as taking advice from an advertising self-regulatory organisation or a legal opinion from an independent legal practitioner regarding the honesty of statements in their endorsement and its compliance guidelines. The provisions of the Consumer Protection Act, 2019 shall apply for any violation of the provisions of these guidelines.

The Advertising Standards Council of India (ASCI) has framed a Self-regulatory Code prescribing the rules for advertisements in India. The Ministry of Information and Broadcasting has recognised these rules under the Cable television network Rules. The Code lays down a series of rules and regulations to ensure the authenticity of the advertisement content.

The role of social media influencers is expanding at an unprecedented rate. Considering the large audience who are exposed to promotions by celebrities and influencers, it is essential that advertisements made by them comply with the provisions of the law. They should not be misleading and deceptive to impinge upon the rights of the consumer.

In Marico Limited v. Abhijeet Bhansali, the Bombay High Court granted an interim injunction order against the Defendant, a Youtuber by the name ‘bearded chokra’ stating that he committed a ‘targeted attack’ towards the product of the respondent, namely Parachute Coconut Oil. It was alleged that the respondent made scathing reviews of the product, remarking it to smell like a rotten coconut and causing damage to his hair, which severely influenced the reputation of the product. Bhansali contended that it was an honest opinion and that mere viewing of his video does not mean that the viewers were swayed to not buy the product. The Court held that the respondent made the video to increase his viewership and thus falls under the ‘nascent category’ of social media influencers. The Court observed that social media influencers wield great power to influence minds. “With power also comes responsibility. I do not believe that a social media influencer can deliver statements with the same impunity available to an ordinary person. Such a person bears a higher burden to ensure there is a degree of truthfulness in his statements. A social media influencer is not only aware of the impact of his statement but also makes a purposeful attempt to spread his opinion to society / the public. In view of the same, the Defendant had a higher responsibility to ensure that his statements do not mislead the public and that he is disseminating correct information. The Defendant’s recklessness has a much greater impact on the Plaintiffs / its product’s reputation as compared to a reckless statement by an ordinary individual.”

However, a Division Bench of Bombay High Court lifted the injunction granted by the Single Judge and allowed Bhansali to post the video subject to removal and alteration of certain parts of the video demarcated by the Court.

ASCI DRAFT GUIDELINES FOR INFLUENCER ADVERTISING ON DIGITAL MEDIA

The ASCI is a voluntary self-regulatory organization seeking to ensure that advertisements conform to its Code. It seeks to ensure that all advertising material is truthful, legal, honest, decent, does not objectify women, safe for consumers and fair to their competitors. It seeks to maintain and enhance consumer’s interest and confidence in advertising. ASCI review all sort of complaints related to advertising under the category media including TV, SMS, Print, Internet, brochures, etc. In the light of growing promotions and endorsements by influencers on digital media, the ASCI formulated draft guidelines for influencer advertising on digital media (hereinafter referred to as guidelines) for consultation by stakeholders in February 2021.

The guidelines have been drafted considering the need to enable consumers to differentiate between promotions made to influence their opinion or commercial gain. The consumers may view several promotions and be influenced by them, not realising whether they are genuine opinions of the influencers or paid collaborations. This is inherently misleading and amounts to unfair trade practice. The guidelines apply to advertisements across all digital media platforms, including internet, mobile broadcast, digital TV etc.

KEY FEATURES OF THE GUIDELINES INCLUDE

Definition of advertisements as ‘a paid-for communication, addressed to the public or a section of it, the purpose of which is to influence the opinions and/or behaviour of those to whom it is addressed.’

An influencer is defined to be a person ‘who has access to an audience and the power to affect their purchasing decisions or opinions about any product, service, brand or experience, because of the influencer’s authority, knowledge, position, or relationship with their audience.’

The guidelines require the influencer, publishing account or the advertiser to make a disclosure clarifying that particular promotion is an advertisement such that an average consumer must be able to recognise it as an advertisement without clicking or otherwise interacting with it. The disclosure must be clear, unambiguous and obvious.

Disclosures have to be made from amongst the labels prescribed by the ASCI. These include #ad, #collab, #promo, #sponsored or #partnership. Only permitted disclosure labels will be considered sufficient disclosure since consumers may not be familiar with various creative ways in which advertisers and influencers may signify that the said communication is an advertisement.

Advertisements must be obviously differentiable by an average consumer from editorial and independent user-generated content to prevent the audience from confusing between them.

The disclosure label needs to be placed so that it is evident, clear and prominent. The user must not have to click or scroll to find the label; it must be mentioned within the first two lines. The disclosure label should also be compatible with all devices or platforms. The disclosure label has to be in English or translated into the language understood by the average consumer viewing the advertisement.

If an advertisement is posted on Instagram stories or Snapchat, the label should be imposed. Different durations have been provided for which the disclosure should be visible to the consumer in the case of video advertisements without any accompanying text.

The influencers should do their due diligence about any technical or performance claims made by them. Evidence of due diligence would include correspondence with the advertiser or brand owner confirming that the specific claim made in the advertisement is capable of scientific substantiation.

In case of a violation of these guidelines, the ASCI will have the authority to take action. It can issue notice to the brand owner and influencer upon a complaint made by a consumer or suo motu cognisance of a potentially objectionable advertisement.

Feedback and suggestions on these draft guidelines have been taken from the stakeholders, and the ASCI will shortly release the final guidelines.

CONCLUSION

In the backdrop of the growing influence and reach of these influencer marketing on digital media platforms, there is a crucial need for regulating these advertisements in the interest of consumers. It is a consumer’s right to be informed of the actual quantity and quality of the product or service. As a natural corollary, the consumer must also be able to differentiate between genuine opinions of the influencers and the promotions done for monetary gain.

This will enable the consumer to make a more informed and well-rounded decision. The guidelines are being viewed as a step in the right direction. These guidelines will bring in more transparency and responsibility on the part of the influencers endorsing brands. This will also strengthen the trust of consumers in the influencers as well as the brands. The influencers will now have to be more mindful before making representations and ensure authenticity.