Centre Issues New Rules For Influencers, Up To Rs 50 Lakh Fine If Not Followed.

• The guidelines are aligned with those guidelines issued under Consumer Protection Act (CPA), 2019.
  • Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 was issued under CPA, 2019
  • It provides a framework for protecting consumers against unfair trade practices and misleading advertisements.

Need for the guidelines

• There has been increased use of social media for promotional activities and influencer violations comprising almost 30% of ads taken up by the Advertising Standards Council of India .
• India’s social media influencer market expected to reach 2,800 crore by 2025 (from Rs 1,275 crore in 2022).

Important guidelines

• Any celebrity, influencer or virtual influencer must disclose any material connection (trips or hotel, etc.) with the advertiser.
• Disclosures must be prominently and clearly displayed.
• Endorsements must be made in simple, clear language and terms such as “advertisement; “‘sponsored;’ or “paid promotion” can be used.
• The product and service must have been actually used or experienced by the endorser.

Non-compliance can lead to a jail term of up to 2 years and penalty of Rs 50 lakh.