New Guidelines Regulate Influencers in India

It is a venture to bring more transparency in influencer advertising through the method of compulsory disclosure labelling.

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The 21^st century saw the arrival of another medium of communication called Social Media which transformed the way people connected with each other and the way information was shared and distributed. The existing media business model was sent for a toss as unlike its predecessor, Social Media was more interactive, enabled one-to-one conversation and demanded immediacy in response. 

With marketers no longer curtailed to traditional forms of media, the social media marketing industry was born. Smartphones further liberated social media from laptops as social media apps could run-on pocket-sized computers. Businesses took advantage of this new consumer mobility by serving their customers new, simpler methods of interacting — and new ways of buying goods and services. 

Need for Regulation

India’s influencer market has a market cap of $75-$150 million per year which is only expected to shoot upwards with smartphones becoming more affordable and data rates getting cheaper. The target audience of any advertisement is the consumer. If a consumer feels that a particular advertisement is in bad taste or is false in its claims, they need a body or council to whom they can air their grievances and who will take any appropriate action, if necessary.

The ICC Advertising and Marketing Communications Code, introduced by the International Chamber of Commerce (ICC) in 1937 has served as the cornerstone for many national Codes. India’s Self-Regulatory Organisation is the Advertising Standards Council of India (ASCI) with its aim of “maintaining and enhancing the public’s confidence in advertising”.

The ASCI has been working on the rules for social media influencers promoting brands since last year. The draft guidelines were open for public feedback till March 8 but were later extended to March 21^st. 

Key Proposals

A summary of the draft Guidelines in relation to advertising standards for social media influencers has been elucidated below:

1. (a) The term ‘advertisement’ has been described as a paid communication, which is targeted to the public to sway their opinion and/or behaviour. The definition elaborates that it shall also include any communications which while may or may not be deemed as an ad but is owned or authorised by the advertiser or brand owner. Consequently, a disclosure label is mandatory to be added from a provided list of labels of #ad #collab #promo #sponsored #partnership. 

The key principle for having a specific list of disclosure options is to remove the chance of any confusion in the minds of the public as to whether the communication is personal work or an ad.

2. (b) An ‘Influencer’ has been categorised as someone having access to an audience and having the power to sway the audience’s purchasing decisions or opinions about a product, service, brand, or experiences. Further, going by the definition, an influencer can also intervene in an editorial context or in collaboration with a brand to publish content.
3. (c) The Guidelines have created a bridge between the advertisement and the influencer. Any advertisement done by the influencer, should contain a material connection/payment. IT ‘Material Connection’ has been deemed to include free products, trips or hotel stays, media barters, or awards – provided by an advertiser to the influencer. 
4. (d) The Advertisements are mandated to contain disclosure labels and should be affixed on all the promotional posts of the influencer.
5. (e) The disclosure label needs to be upfront i.e., it should appear ‘within the first two lines’ of the content so that the users do not have to click on ‘see more’ or ‘scroll under the fold’ to get to know whether the content is a commercial post. Further, the disclosure label must be in English or translated into the language of the advertisement in a way that it is well understood by the average consumer who is viewing the advertisement. It also provides further insight in Blanket disclosures in a profile/bio/about section being inadequate in nature as people visiting the site might read individual reviews or watch individual videos without seeing the disclosure on another page.
6. The disclosures are required to be present in a picture post or a video, made by the influencer but subtle differences. In case of a picture pose, the label is required to be superimposed over the picture in a way that the average consumer can see it clearly. For a video post it is as follows:

Lastly, where the advertisement is in the form of an audio, disclosure label should be clearly announced at the beginning and at the end.

7. (g) The Guidelines restrict the influencers from adding filters for enhancing or exaggerating the effect of the claim that the brand is making of the advertised products.
8. (h) The influencers are also required to conduct due diligence about any technical or performance claims made by them for a product, such as 2X better, the effect lasts for one-month, fastest speed, best in class etc.

ASCI’s Jurisdiction

There have been numerous cases concerning the jurisdiction of the ASCI. In Common Cause (A Regd. Society) Vs. Union of India and Ors. (January, 2017) the Supreme Court gave recognition to the self-regulatory mechanism put in place for the advertising content by ASCI. In Primordial Systems Pvt Ltd vs Indian News Paper Society & Ors, (July 2017) the Delhi High court declared that decisions of ASCI would be binding on both its members as well as non-members. In Procter and Gamble Home Products Private Limited vs. Hindustan Unilever Ltd. (January 2017), Delhi High Court had commented upon the scope of its dispute resolution powers. It stated that while ASCI had a committee for advertising related Consumer Complaints, the scope was curtailed to only ‘self-regulate’. Thus, “The ASCI, even if it finds merit in a complaint, can only make a recommendation for the rectification thereof…” (Para – 16). And so, the intention of the high court was clear that ASCI had no machinery in place to press for the removal of the ad.

Moreover, the Consumer Protection Act, 2019 under Section – 21, (Power of Central Authority to issue directions and penalties against false or misleading advertisements) empowers the government to issue directions to the advertiser for any false or misleading advertisements and as per Section 89, (Punishment for false or misleading advertisement) to impose penal action in the form of either imprisonment for a term up to 2 years (Section 88, Punishment for false or misleading advertisement) or a fine up to 10 Lakh Rupees (10,00,000 Indian Rupee) 

The Way Forward

With the advancement of technology, efficient guidelines are necessary to manage advertisement content on digital platforms and to protect consumers from misleading and deceiving advertisements. The guidelines would enable the public into becoming more conscious of deciphering paid advertisements and independent organic posts of the influencer. Today, the line of distinction between organic and commercialised content is becoming increasingly faint, and it is critical that the consumers have clarity regarding the basis of their purchase decisions. This in turn would help them to have a fair choice and to take informed decisions.

It is a venture to bring more transparency in influencer advertising through the method of compulsory disclosure labelling. This is a step in the right direction and would help in moulding the “social influencer world” into having more accountability and changing the way they currently operate.