A set of rules makes it mandatory for social media influencers to clearly state their brand affiliations. This is especially important for financial products or investment.
On Jan. 20, the government made it mandatory for celebrities and social media influencers to disclose their "material connections" or "interests" when creating content. These terms include owning a share in an advertised company, receiving gifts, free trips, hotel accommodation from brands, and discounts and awards while endorsing any product, service or brand.
Failing to follow the guidelines will make social media influencers liable for a fine of up to $12,300 (1 million Indian rupees). In the case of repeated offenders, the penalty can go up to $61,600 (5 million Indian rupees).
In case the endorsement is through a picture, it should be superimposed over the picture so that the viewers can notice it. If the endorsement is through a video, it should be placed in the video and not just in the description. In case of a live stream, it should be displayed as a ticker throughout.
The secretary of the Department of Consumer Affairs said the department was in talks with tech companies to deploy some crawling algorithms to identify offenders. Meanwhile, consumers can file complaints if they find an influencer violating the guidelines.
“You can never cover it 100%. This is a cat-and-mouse thing… So, the idea is to protect the interests of the consumers and let him not be taken for a ride by showing him something as unbiased whereas actually, it is a paid thing,”
According to the secretary, the size of the social media influencer market in India in 2022 was $157 million. It could reach as much as $345 million by 2025.
Indian advertising industry’s self-regulatory body Advertising Standards Council of India (ASCI) has welcomed the government’s move.