[The Viewpoint] Viewers, influencers beware: ASCI issues Influencer Guidelines

Some of us may have noticed little tags like “partnership”, “sponsored”, “advertisement”, “collaboration” in posts of our favourite social media influencers. This addition is due to the new Advertising Standards Council of India (ASCI) Guidelines for Influencer Advertising in Digital Media.

Ever since the COVID-19 pandemic hit, the manner of buying of goods, services, experiences and consequently advertising underwent a significant change. Consumers stopped stepping out of their homes. Outdoor advertising moved to our phone screens and our social media feeds. Today, an influencer is no longer restricted to merely a celebrity, a film star, or a sportsman.

With the rise in influencer marketing, a need was felt for governing the manner in which influencers market products, services, experiences, brands, so that the consumers are not misled. The ease of creating content has given exponential growth to influencer marketing. It has become increasingly difficult to differentiate between content and advertisement. It has become necessary to ensure that when a viewer sees their favourite social media influencer reviewing a new gadget, the viewer is also made aware whether or not the review was a paid promotional activity for the gadget company.

ASCI released these Guidelines on June 14, 2021 for bringing about transparency in influencer communication to public, especially when associated with commercial gain. In today’s times, where influencer marketing has become a dominant marketing vertical, it is necessary to build in checks and balances for ensuring consumer protection. Similar guidelines exist in the United Kingdom in the form of the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP Code) and in the United States as the Federal Trade Commission’s Disclosures 101 for Social Media Influencers.

As is evident, an influencer is anyone who has access to an audience and has the power to influence their purchasing decisions, opinions about a product, service, brand or experience, because of the influencer’s authority, knowledge, position, or relationship with their audience. ASCI has not drawn a distinction between natural and virtual influencers. The Guidelines apply equally to an influencer who is a natural person as well as a digital avatar.

Unlike the UK’s Advertising Standards Authority which provides that a person can be regarded as a celebrity when they have 30,000 followers, ASCI Guidelines don’t provide that only influencers with certain number of followers or posts above a certain duration will fall within the ambit of these Guidelines. These Guidelines have a much wider ambit than other similar parallel rules/guidelines followed across the world.

While ASCI is a self-regulatory body whose guidelines are not binding under law, the guidelines are to be adhered to by its members. Given that most advertisers in India are members of ASCI, these Guidelines will become a benchmark. While these Guidelines are not in the nature of a statute, ASCI has been recognized by various courts in India. Due to the extent and composition of its members, ASCI Guidelines tend to become industry practices.

The idea behind bringing about these Guidelines was to increase the awareness of the consumers about the commercial intent behind promotional messages and to avoid them from being misled. In view of this, it becomes critical for all influencers and advertisers to ensure that whenever there is a relationship between the two based on a material connection, such material connection should be disclosed to the consumer. Material connection is not restricted only to monetary considerations but also includes non-monetary consideration like free products, gifts, employment relationship, contest or sweepstake entries, barters, etc.

Disclosure of material connection becomes imperative as it may affect the credibility of the reviews/opinion posted by the influencer regarding any particular advertiser’s product, service, experience. A prominent unmissable disclosure is required to be made for all advertisements that published by the influencers or their representatives through the influencers’ accounts. The disclosure has to be in a manner where it is easily understood by the average consumer that a specific post is an advertisement. In case of a virtual influencer, there should an additional disclosure that the consumer should be aware that they are not interacting with a real human being.

The Guidelines also require the influencer to do due diligence to ensure that the claims that they make through their advertisements/posts are not false or misleading. It is similar to the obligation under the Consumer Protection Act, where endorsers may be penalised for featuring in misleading advertisements, unless they exercise due diligence to verify the veracity of claims made in the advertisement.

In fact, in the case of Marico Limited v. Abhijit Bhansali, popularly known as the “Bearded Chokra” case, the Bombay High Court looked into the issue of false, malicious and reckless statements made in advertisements by the defendant, a popular video blogger. The Bombay High Court held that a person can be held liable for defamation if he/she fails to substantiate the facts asserted. This demonstrates that influencers are no longer immune from action being taken against them if they make irresponsible statements.

From the perspective of an influencer/advertiser, it becomes important to ensure that each build in necessary contractual safeguards in their engagements. These Guidelines are applicable equally for long-term association or a one-time association between an influencer and an advertiser. Since the Guidelines have come into force in June this year, ASCI has sent notices to several celebrities who have have been non-compliant with these Guidelines.

In order to ensure compliance, ASCI has tied up with the French firm Reech, which uses artificial intelligence to spot guideline violations in influencer posts. It has also provided for a WhatsApp number through which consumers can file complaints in case of non-compliance by influencers. While some influencers have edited their static posts to ensure compliance with the Guidelines, there is no clarity on the process of rectification in case of violations that occur during live streams, posting stories or such short-lived content available in the digital space.

The Guidelines are applicable to practically all digital media and to everyone who is an influencer, whether a celebrity or a commoner. So the next time we see the latest review of the new wearable technology from XYZ brand posted by Ms ABC, we should check if the video is posted due to a material connection between XYZ and Ms ABC or if Ms. ABC purchased the wearable and did an independent uninfluenced review.

As the Guidelines say, “With Great Influence, Comes Great Responsibility.”

Chandrima Mitra is a Media and Entertainment Practice Partner and Vaishakhi Mehta is a Senior Associate at DSK Legal.