Influencers take note, Centre issues new social media regulations with fines up to Rs 50 lakh

The Centre has recently issued a set of new guidelines for social media influencers that aims to protect the interests of consumers and curtail any misleading advertisements.

The guidelines, called ‘Endorsement Know-Hows - for Celebrities, Influencers and Virtual Media Influencers (Avatars or Computer Generated Characters) on Social Media Platforms’, have made it mandatory for social media influencers to disclose all ‘material’ interests such as gifts, hotel accommodation, equity, discounts, and awards while endorsing any products, services or scheme.

The Central Consumer Protection Authority (CCPA) has the power to impose a penalty of up to Rs 10 lakh on manufacturers, advertisers, and endorsers for non-compliance. For repeat offenders, the penalty can shoot up to Rs 50 lakh.

The CCPA can also prohibit endorsers of a misleading ad from making any endorsement for up to one year, and for subsequent contraventions, the prohibition can extend up to three years.

The size of the current social influencer market in India, according to Consumer Affairs Secretary Rohit Kumar Singh, is Rs 1,275 crore, which is expected to grow to Rs 2,800 crore by 2025.

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Who needs to disclose 

Individuals/groups who have access to an audience and the power to affect their audiences' purchasing decisions or opinions about a product, service, brand, or experience will have to make a disclosure.

When to disclose

According to the guidelines, the disclosure should happen “when there is a material connection between an advertiser and celebrity/influencer that may affect the weight or credibility of the representation made by the celebrity/influencer.”

How to disclose

The disclosure should be in simple and straightforward language, not hard to miss, and not be mixed with a bunch of links and hashtags.

While posting a photo, disclosures should be superimposed over the image, clear enough for viewers to notice.

In a video, disclosures should be placed in the video and not just in the description down below the post and in both audio and video format.

In the case of live streams, disclosures should be displayed continuously and prominently during the entire stream and not just in descriptions or captions.

(With agency inputs)

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