The Consumer Affairs Ministry, on Friday, released new guidelines for social media influencers who endorse products through their accounts. The guidelines, titled Endorsement Know Hows — for celebrities, influencers, and virtual media influencers (Avatar or computer-generated character) on social media platforms, require influencers to disclose their “material interest” in endorsements they’re making.
Failing to abide by the guidelines could lead to a penalty for false advertising under the Consumer Protection Act of 2019, according to the rules. Offenders will be hit with fines or at least ₹10 lakh, going as high as ₹50 lakh for repeat offenders. Repeated violations of the rules might result in a ban on product endorsements lasting up to six years for the influencer.
The Consumer Protection Act of 2019 establishes legal safeguards to prevent deceptive advertising and other forms of commercial misconduct.
Further, the new rules say that endorsements must be genuine and should not mislead customers by inflating a product's efficiency, scientific validity, practical utility, or capacity of performance, as required by the ministry.
In 2022, the Indian market for social media influencers was valued at ₹1,275 crore. By 2025, that number is expected to grow to ₹2,800 crore, a compound annual growth rate (CAGR) of 19%–20%. Rohit Kumar Singh, secretary of the Department of Consumer Affairs, said in an address to media earlier today, that there are more than one lakh social media influencers (those with significant impact or following) in India.
He also mentioned that personal care is one of the largest spenders on influencer marketing. According to Singh, the fashion industry is where social media influencers have the greatest impact.
“The new guidelines broadly define how social media influencers should indulge in disclosure of their relationship with brands,” he added.
To be sure, this is not the first time that attempts have been made to curb influencer-driven misinformation on social media. In July last year, the Advertising Standards Council of India (ASCI), the self-regulatory body for the advertising industry, laid down rules for labeling of paid promotions by influencers.
Social media and influencer marketing experts told Mint at the time that such guidelines coming from the government will help organise the sector. Industry executives said that ASCI’s guidelines hadn’t made much impact till last year.