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New Rules Mandate Social Media Influencers To Pay Hefty Penalties Up To Rs. 50 Lakh For Non-Compliance

    Influencers on social media in India are now required by new regulations to declare any and all “material interests” they have in supporting a product or service, such as monetary compensation, stock, discounts, or freebies. The government is working to regulate influencer marketing in an effort to make the sector more open and to shield consumers from deceptive marketing. All those who can influence the purchasing decisions of others within their audience are subject to the rules that were implemented on January 20, 2023. Violations of the standards, which will be enforced by the Central Consumer Protection Authority (CCPA), may result in fines of up to Rs 50 lakh and a six-year ban on endorsing items.

    “Endorsement Know-Hows for Celebrities, Influencers, and Virtual Media Influencers (Avatars or Computer-Generated Characters) on Social Media Platforms” are the rules released by the Department of Consumer Affairs under the Consumer Protection Act of 2019. When false or deceptive ads cause harm, the Act can be used.

    When there is a “material connection” between an advertiser and a celebrity or influencer, the CCPA’s chief, Nidhi Khare, said notification will be needed. Material ties can take many forms, including, but not limited to, financial gain as well as tangible rewards and incentives. These relationships may be familial, professional, or social in nature and may have resulted in the recipient receiving a free product, a discounted product, a gift, a trip, a hotel stay, a media barter, coverage, or an award.

    Khare argued that disclosure in endorsement messages should be given in a way that is obvious, conspicuous, and exceedingly hard to miss. The law requires that any time an endorsement appears in a photograph, a disclaimer be clearly visible to the spectator. You can’t just put it in the description of a video; you have to put it in the video itself. In the case of a livestream, disclosure should be presented as a ticker that stays on the screen the whole time.

    The purpose of the Consumer Protection Act is to safeguard consumer rights and prohibit deceptive business practises, as stated by Rohit Kumar Singh, Secretary of Consumer Affairs. Anyone promoting a brand on digital media should disclose any financial or other ties they may have to the product or service being marketed.

    The market for influencers in India is predicted to grow to 2,800 crores by 2025. As the industry has expanded, so has the number of influencers,” who falsely claim to have no financial stake in the goods or services they promote. The standards were put in place to standardise the sector and arm buyers with data to help them make educated purchases.

    According to Khare, deceptive advertising in any format is forbidden, and the new rules outline who must disclose, when they must disclose, and in what form they must do so. In the event of noncompliance, customers may file a complaint with the appropriate authorities in order to pursue legal action against the offending party.

    The recommendations will likely have a major effect on the fast-expanding influencer marketing sector. For influencers to continue recommending things, they will need to be open and honest about their relationships with brands.

    India’s new regulations for social media influencers are an attempt to increase disclosure and shield customers from deceptive marketing. The regulations are anticipated to have a major effect and provide consumers with the data they require to make educated purchasing decisions as the influencer sector expands in India. For influencers to continue recommending things, they will need to be open and honest about their relationships with brands.

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