Ever since the world has been hit by the pandemic, companies have launched innovative ways to increase human interaction, learning and lifestyle through the internet. Covid-19 has led to the exponential expansion of dependence on the online world. Dependence on social media is rising by the day and social media influencers are beginning to emerge in the worldwide advertising space as key players. From marketing luxury cars to fast fashion goods, social media influencers have immense power to sway purchase decisions through platforms, including Instagram, Facebook, Snapchat, YouTube and Pinterest.
A recent study by Adlift, an Indian marketing agency, suggests that India’s influencer market is estimated at $75-$150 million while the international influencer market is estimated at $1.75 billion and is expected to see further growth. With this new form of advertising changing the landscape for product marketing around the world, concerns regarding regulating social media influencers are not misplaced. The lack of advertising regulations on these platforms has given ample room for misleading advertising and uninformed consumer choices. As a result, the Advertising Standards Council of India (“ASCI”) has recently introduced Draft Guidelines for “Influencer Advertising on Digital Media” (“ASCI Draft Guidelines”). Along with streamlining the rules for advertisements through digital platforms, the ASCI Draft Guidelines aim to instil a sense of responsibility amongst influencers and establish a clear distinction between paid promotions, expert videos and other content posted on social media.
More and more cases of misleading advertisements on digital platforms are coming to light. In a recent case, ASCI found misleading advertisements posted on social media websites by WhiteHat Jr, an online coding learning platform for kids. These advertisements were taken off from the websites as they were found to be in violation of the ASCI code and misleading consumers, especially targeting children and teenagers.
People with a popular following often earn money when promoting products online. While some of these videos made by celebrities are already labelled as “paid promotions”, not all of them are. Sometimes brand endorsers actually showcase the videos as if they were making them out of their own opinion or expert knowledge, even when these are paid promotions for products and not genuine reviews. Hence, in order to avoid confusion, the objective of the ACSI Draft Guidelines is for consumers to be able to easily distinguish between genuinely created expert videos versus paid promotions and advertisements. It has also been noted that consumers should be able to distinguish ‘when material is being promoted with an intention to influence opinion or behaviour for an immediate or eventual commercial gain.’
PROVISIONS OF THE ASCI DRAFT GUIDELINES
ASCI has recognised that with digital media becoming increasingly pervasive, it has become important to understand the peculiarities of these advertisements and the way consumers view them.
As per the ASCI Draft Guidelines, an average consumer should be able to recognise that something is an advertisement without having to click or otherwise interact with it. Therefore, ASCI has stated that influencers/publishing accounts/advertisers need to make disclosures upfront by using disclosure labels when a piece of communication is an advertisement. These disclosure labels can include hashtags listed in the ASCI Draft Guidelines, including “#ad”, “#collab”, “#promo”, “#sponsored” or “#partnership”. The disclosure label must be in English or translated into the language of the advertisement in a way that it is well understood by the average consumer.
The disclosure label should also be superimposed on the picture/video in a manner easily visible to the viewer. Further, the ASCI Draft Guidelines also contain detailed provisions on the timing of videos and how the disclosure labels should be added, according to the time. In case of live streams, they should be prompted periodically for 5 seconds at the end of every minute. In addition, if there is audio media, the disclosure label should be in the form of an announcement.
PROTECTION OF INTELLECTUAL PROPERTY RIGHTS
While we wait for the final guidelines by ASCI to be introduced, there is no denying that there is a need for protection and regulation of such advertisements and for the protection of intellectual property rights as well. The current ASCI Draft Guidelines only contain provisions regarding disclosures targeting misleading advertisements, but, there is also a need for the protection of intellectual property rights through such advertisements. The unauthorised use of brand names, copyrights and trademarks has increased as a result of the ease and popularity of social media and there is thus a need to protect the interests of these right holders as well.
In the case of Marico Limited v. Abhijeet Bhansali, the Bombay High Court deliberated upon the duties and obligations of social media influencers and held that “such individuals only knew too well that they wielded significant influence over their audience, and that their statements have a magnified and profound impact. Followers place a certain degree of trust in social media influencers, and accept their statements as facts without much scrutiny.” The Court also stressed upon the fact that a social media influencer cannot make statements with the same freedom available to an ordinary person. With regards to intellectual property rights, the Court recognised that, “the unauthorized use of the Plaintiff’s registered trademarks by the Defendant in a manner, which is detrimental to its distinctive character or reputation, cannot be in accordance with the honest practices in industrial or commercial matters.” Therefore, from this decision by the Bombay High Court, it can be observed that the Indian courts have begun to recognise that there is a need to regulate social media advertising and for influencers to practice responsible and ethical means of advertising, without taking any undue advantage of the power that they seem to yield over the new-age generation.
It is worth mentioning that the Consumer Protection Act, 2019 (the “Act”) deals with misleading advertising and endorsements by celebrities, including social media influencers. Therefore, it is possible to sue an influencer for misleading advertising through the provisions of this Act. The Act has also led to the creation of the Central Consumer Protection Authority, a government body that shall deal with enforcement and investigation of misleading advertisements.
In September 2020, The Ministry of Consumer Affairs released the Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Draft Guidelines (the “Consumer Affairs Draft Guidelines”) to keep a watch on endorsements through all kinds of mediums, including digital platforms. Through these Consumer Affairs Draft Guidelines, promoters are required to conduct a certain level of due diligence before they endorse or advertise products. Although these have not come into force yet, it is important for social media influencers to keep a look out for them as well.
While the ASCI Draft Guidelines are yet to be finalized and ASCI awaits suggestions from stakeholders before implementing the final rules, it seems only a matter of time that such influencers shall have to follow a regulatory regime and ethical advertising means. That being said, it should also be noted that ASCI is not a government body and although members follow its self-regulatory code, its decisions are not binding. Therefore, although ASCI has recognized the need for regulating social media influencers on digital platforms, statutory authority governing the same shall fortify the provisions.
It should also be noted that release of the ASCI Draft Guidelines has stirred debate in the social media marketing and advertising industry and there also seem to be some reservations about the same. Certain brands wish for their promotional material to look organic and influencers who monetise their positions via such skilful marketing tactics may lose out on their viewership as a result of disclosure labels because viewer engagement may reduce. It may even be argued that these disclosure labels may work against the interests of key market players. That being said, the rights of the consumers have to be weighed against these interests as well.
To conclude, although there is rapid evolution in the technological sector, uncertainty remains as to whether the current intellectual property and advertising laws and enforcement measures are sufficient for digital platforms. In addition to the disclosure requirements, it is suggested that the ASCI Draft Guidelines as well as the statutory provisions should also include provisions for the protection of intellectual property rights. The provisions should strive to strike a fair balance between the rights of the consumers and public at large versus the rights of these social media influencers and the interests of the brands involved.