Govt explains rules for paid or barter endorsements by social media influencers

In January 2023, the Department of Consumer Affairs issued guidelines for influencers, including virtual avatars, to disclose their material connections while endorsing products.

These guidelines aim to ensure that consumers are informed about any financial or other incentives that an influencer has received in exchange for promoting a product or service.

The guidelines require influencers to disclose any material connections they have with a brand or product in a clear and conspicuous manner.

This includes disclosures in captions, hashtags, and other forms of content. Failure to comply with these guidelines could result in legal action or penalties.

However, the Department later admitted that the guidelines were not clear.

As per the explanation, for paid or barter brand endorsements, social media influencers can use any of the following terms to disclose their arrangement: advertisement, ad, sponsored, collaboration, or partnership. These terms must be included as a hashtag or headline text.

"The size of the social-media influencer market in India last year was Rs 1,275 crore and by 2025, it is likely to be Rs 2,800 crore. There are more than 100,000 social-media influencers of substance, and this calls for a check," said the department.

The department emphasised that people or organizations who can influence purchasing decisions or opinions about a product, service, brand, or experience through their audience must disclose any material connections that could impact the credibility or weight of their representation.

It was also specified that the endorsement message must include the disclosure in a way that is easily noticeable, clear, and prominent. The guidelines require that the disclosure and endorsement be in the same language. On platforms with limited space like Twitter, using hashtags such as "ad," "sponsored," and "paid" are acceptable.

For picture endorsements, the disclosure must be large enough to be noticed by viewers, while in video content, it should be included in both the audio and visual formats, not just in the description. However, for live streams, the disclosure should be continuously and prominently displayed in both audio and visual formats.