India: Under new rules, influencers face fine, six-month ban for unlabelled paid promotion

The government in India has issued new endorsement rules which statethat sponsored content must be clearly labelled by social media influencers as such or they will have to pay a fine of up to Rs 10 lakh (USD12,349)for the first time and a repeat offender will have to pay fine of up to Rs 50 lakh (USD61,746)or face a ban of up to six months.

India's Ministry of Consumer Affairs, Food & Public Distribution issued the regulations which aim to ensure that the audiences are not deceived by influencers when they are promoting services or products and must comply with the Consumer Protection Act and the guidelines and rules related to them.

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As per the guidelines, the influencers must disclose the sponsorship clearly and prominently in any endorsement, which makes it difficult for the audience to miss it.

The guidelines apply to any influencer, virtual or celebrity who is reaching the audience and holds the power to influence the audience's decisions related to purchasing a product or opinions about a service, product, experience or brand.

Any material connection of the influencers with the advertiser, which includes incentives, benefits, trips or hotel stays, monetary or other compensation, coverage, free products without or with a condition, media barters, awards, gifts, discounts, employment, personal or family relationships must be disclosed.

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The influencers must make endorsements in clear and simple language, using terms like “paid promotion”, “advertisement” and “sponsored”. No service or product not experienced or used personally shouldbe endorsed by the influencers.

The ministry released the guidelines in accordance with the Consumer Protection Act of 2019, under which guidelines were established for consumers' protection from misleading advertisements and unfair trade practices.

(With inputs from agencies)

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