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Attention influencers. You may soon be fined lakhs for false ads, or not disclosing paid content

A set of guidelines, likely to be released by Consumer Affairs Ministry this month, will cover paid content, social media promotions & levy Rs 10 lakh-50 lakh in fines for negligence.

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New Delhi: Mandatory disclosure of paid promotions and no false promotions without the support of authentic data — these are among a set of likely guidelines for digital publicity that the Ministry of Consumer Affairs is expected to release this month, in a bid to remove misleading advertisements from social media platforms, ThePrint has learnt.

The guidelines will cover paid content put out by social media influencers, celebrity promotions and the work done by influencer marketing companies that manage influencers and build influencer campaigns with organisations that want to sell their products.

Those found to be flouting the norms will get a chance to plead their cases before the ministry and explain why they did not conform to the guidelines, said Nidhi Khare, additional secretary, Ministry of Consumer Affairs, but may have to pay between Rs 10 lakh and Rs 50 lakh as penalties if found guilty.

In June this year, the advertising industry watchdog, the Advertising Standards Council of India (ASCI) had raised the issue of several prominent education technology (ed-tech) firms and crypto companies making deceptive claims in their advertisements.

Last year, the ASCI had released its own ‘Guidelines for Influencer Advertising in Digital Media’ and suggested that social media posts related to paid content or advertisements should be labelled as such, or else it amounts to willful deception.

However, the ASCI is a self-regulating body and does not have the power to penalise. It has been helping the government identify and build a constructive ecosystem wherein “misleading claims” are comparatively lesser, if not removed entirely, said sources in the ministry and the organisation.

Now the ASCI hopes the new ministry guidelines would enable the government in protecting consumers from being taken in by paid promotions that are put out without proper disclosures.

The guidelines now await the approval of the Ministry of Information and Broadcasting (I&B) before being released, sources told ThePrint. Though released by the Ministry of Consumer Affairs, the I&B Ministry needs to be on board, since it is the one which oversees communication platforms.

“We are specifically interested in disclosures. We want organisations and influencers to disclose when they have received funds to promote or endorse services and products,” Rohit Kumar Singh, secretary, Ministry of Consumer Affairs, told ThePrint.

Meanwhile, social media influencers and influencer managing companies claimed they were willing to be mindful, but said penalties in case of negligence should depend on the financial worth and category of the company.


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‘Need to draw a line’

The drawing up of the guidelines followed several deliberations between ministry officials, self-regulatory bodies and advertising professionals, ministry sources told ThePrint. The ministry maintains that while it wants to encourage creativity, everyone needs to “draw a line” to ensure consumers are not misled.

“There will be people in the industry who will keep innovating ways to circumvent laws. We understand the needs of the advertising industry, but there is a line to draw especially for those who mislead the public. The intention here is not to be an impediment to the business or stifle any voice, but there is always a line which should not be crossed,” said Kumar.

He added: “With increasing digitalisation, there is a need for disclosures. Social media intermediaries also have a role to play here since those platforms have many misleading ads. Paid content on television still conforms (to the need for disclosure), but not many social media influencers do and hence these guidelines need to be enforced.”

The guidelines will also extend to digital news media.

“Digital news organisations who don’t follow the rule and disclose ‘advertorials’ will also come under the purview of these guidelines and will have to be penalised. Some of them still don’t disclose if they are endorsing a product or service after receiving money, and hence will be warned against such malpractices,” Kumar claimed.

While those in the business admit that regulations are needed, the penalties for flouting the guidelines are what some are worried about.

“There is a great need for regulations in this industry since it is growing at a rapid pace, and we want consumers to be more aware of influencers like Bollywood celebrity endorsements on Indian TV, newspaper and billboards,” said Amit Mondal, founder, Pulpkey, influencer marketing company.

He added: “According to me, fines could be based on the size and type of influencers rather than a fixed amount for all influencers. Everyone in the industry should know about this news, especially micro-influencers. Due to their lower income, micro-influencers should be fined less than celebrities.”

‘29% complaints pertained to this sector’

Meanwhile, Manisha Kapoor, CEO and Secretary General of ASCI, told ThePrint that the organisation was “well placed to support the government” in this agenda, if needed.

“ASCI has been finetuning our AI-based surveillance system for social media influencers. Almost 29 per cent of our complaints last year pertained to this sector. Given our expertise in this area, we are well placed to support the government in this agenda should they need it. ASCI has both the ability to identify such possible ads and agility in dealing with them,” she said.

The main idea the ASCI emphasised in its previous reports — in June and last year — was “voluntary compliance”.

“Voluntary compliance should remain the first line of resolution as it is speedy, effective and does not cost the taxpayer any money. However for serious and repeat offences, stricter and punitive measures add an extra layer of protection for consumers. So long as the guidelines are in line with global standards, and have considered the views of different stakeholders, we don’t believe there will be a disproportionate burden on the ecosystem,” said Kapoor.

(Edited by Poulomi Banerjee)


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