Guidelines for celebrity endorsements

The Central Government has released the endorsement guidelines for celebrities and social media influencers. The guidelines mandate compulsory disclosure of monetary or material benefits of a product or a brand they are promoting through their social media platforms. Failing to do so will attract a penalty up to Rs 50 lakh.

Need of new guidelines –

• The size of the social-media influencer market in India last year was Rs 1,275 crore and by 2025, it was likely to be Rs 2,800 crore.
• Individuals or groups with access to an audience and have the power to affect its purchasing decisions or opinions about a product, service, brand or experience.
• There are more than 100,000 social-media influencers of substance, and this calls for a check. Therefore, the responsibility of the endorsers or other advertisers is to honestly disclose the information that consumers must know before making any purchasing decisions.

New guidelines –

• The Department of Consumer Affairs under Ministry of Consumer Affairs, Food and Public Distribution released a guide ‘Endorsements Know-hows!’ for celebrities, influencers and virtual influencers on social media platforms.
• The guide aims to ensure that individuals do not mislead their audiences when endorsing products or services and that they are in compliance with the Consumer Protection Act and any associated rules or guidelines.
• The major guidelines include –
  • Disclosures must be Prominent —
    • The guidelines specify that disclosures must be prominently and clearly displayed in the endorsement, making them extremely hard to miss.
    • This includes not only benefits and incentives, but also monetary or other compensation, trips or hotel stays, media barters, coverage and awards, free products, etc.
    • Endorsements must be made in simple, clear language and terms such as “advertisement,” “sponsored,” or “paid promotion” can be used.
    • They should not endorse any product or service and service in which due diligence has been done by them or that they have not personally used or experienced.
  • Penalty —
    • On non-compliance with the guidelines, endorsers may face penalties including a fine up to Rs 10 lakh, which can go up to Rs 50 lakh on recurring violations.
    • Influencers and celebrities can be debarred from endorsements on repeated infringements and may go to jail for six months, which can be extended to two years.

About the Advertising Standards Council of India –

• The Advertising Standards Council of India is a voluntary self-regulatory organisation of the advertising industry in India.
• Established in 1985, ASCI is registered as a non-profit company under the Company Act.
• Objective – To maintain and enhance the public’s confidence in advertising.
• Their mandate is that all material must be truthful, legal and honest, decent and not objectify women, safe for consumers – especially children and last but not the least, fair to their competitors.

How does ASCI take action against advertisements?

• Post receiving the complaints, ASCI processes them as per its normal complaint redressal procedure involving its Consumer Complaints Council (CCC) for adjudication.
• If the complaint is upheld then the ad will need to be modified or pulled out as is applicable for all complaints.
• Currently 100% of TV advertisements and over 80% print advertisements against whom a complaint is upheld by ASCI are modified or withdrawn.