Endorsement Guidelines for Social Media Influencers

Context

• Recently, the Union government released endorsement guidelines for Celebs and Social Media Influencers.
  • Endorsements are a form of advertising that uses famous personalities or celebrities who command a high degree of recognition, trust, respect or awareness amongst the people.

About

• The guidelines aim to ensure that individuals do not mislead their audiences when endorsing products or services and that they are in compliance with the Consumer Protection Act and any associated rules or guidelines.
• With the increasing reach of digital platforms and social media, such as Facebook, Twitter and Instagram, there has been a rise in the influence of virtual influencers, in addition to celebrities and social media influencers. This has led to an increased risk of consumers being misled by advertisements and unfair trade practices by these individuals on social media platforms.
• A report by iCubesWire Survey, a digital media marketing company, suggests that a major percentage of Indians choose brands based on the suggestions by influencers. 
• Also, recently, the Union government has notified the formation of three grievance appellate committees that will address user complaints against social media and other internet-based platforms. 

New Guidelines for Enforcement on Social Media

• Disclosures:
  • Endorsements must be made in simple, clear language and terms such as “advertisement,” “sponsored,” or “paid promotion” can be used. They should not endorse any product or service and service in which due diligence has been done by them or that they have not personally used or experienced
  • Any celebrity, influencer or virtual influencer who has access to an audience and can influence their purchasing decisions or opinions about a product, service, brand, or experience must disclose any material connection with the advertiser.
  • Before endorsing, the product and service must have been actually used or experienced by the endorser. In case of default, the consumers can seek legal action.
• Penalty:
  • As per fresh guidelines, violators have to pay  a fine of Rs 10 lakh and fine can go up to Rs 50 lakh for repeated offenders.
  • The Central Consumer Protection Authority (CCPA) can bar the influencer from endorsing products in case of repeated non-compliance with the guidelines.
  • If there are any violations, the penalty prescribed for misleading advertisements under the Consumer Protection Act 2019 will be applicable.
    • The Consumer Protection Act, 2019 provides the framework for the protection of consumers against unfair trade practices and misleading advertisements.

Image Courtesy: TOI

Social media usage in India

• A staggering 82.9% of all Internet users in India use their mobile devices to access social media. India had approximately 470 million unique visitors to social media platforms.
• The number of internet users has increased over the years in rural as well as urban areas. India is the second-largest online market, behind China. 

Significance of Social Media

• Enhanced Outreach:  Social media has emerged as a powerful platform for forming an opinion as well as generating mass support. 
• Real-Time Engagement: Social Media releases the shackles of time and place for engagement. They can connect policymakers to stakeholders in real-time. 
• In the recent Libyan crisis, the Ministry of External Affairs used social media platforms such as Twitter to assist in locating and evacuating Indian Citizens from Libya.
• Individual Interaction: Social Media platform offers the ability to connect with each and every individual. Such interaction also enables the marginalized to participate in discussions and present their point of view.
• Promote Creativity and self-expression: Social media provides a platform for users to share their ideas, thoughts, and creativity with the world.

Challenges of Social Media

• Privacy & Security: The primary challenge posed by social media is privacy. Many people restrain themselves from taking part in a dialogue with a fear of losing their privacy.
• Access for those with disabilities: There is a need for the formulation and implementation of such guidelines to remove the barriers for differently abled people.
• Vague Terms of agreements: Most of the social media sites allow the audience to create an account, after accepting terms of agreement, which are often vague. 
• Lack of regulations: Social media platforms operate with little regulation, which can lead to harmful content, fake news, and hate speech.

Acts against misleading advertisements in India

• Consumer Protection Act, of 2019: The new guidelines are in alignment with the Consumer Protection Act, of 2019, which was enacted to protect consumers from unfair trade practices and deceptive advertising.
  • Recently the Central Consumer Protection Authority (Authority) notified the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 (Guidelines) under Section 18 of the Consumer Protection Act, 2019 (Consumer Protect Act).

Source: TH