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Importance of due diligence for online content creators in India

August 19, 2021
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Image source: https://blog.ipleaders.in/media-right-privacy-incursion-social-media/

This article has been written by Jai Shetty, pursuing a Certificate Course in Media and Entertainment Law: Contracts, Licensing and Regulations from LawSikho.

Introduction

Online content creators, as a term was first used only when mobile applications or commonly known as apps, like Snapchat and Instagram et.al, started to get traction in India. Such applications have to constantly reinvent themselves either to be better or on par with their competitors. New features, add-ons are introduced to lure a generation that is almost always dependent on their phones. Just as these applications have to reinvent themselves, content creators viz., influencers also have to reinvent themselves. 

One might wonder who exactly is an online content creator? What does a content creator do? What are the qualifications required for one to be classified as a content creator? The simple answer is that any Tom, Dick and Harry can be an online content creator. Some people would post funny videos whereas some would post very inspirational ones. It depends from person to person. There are no known qualifications to exist, for anyone can be an online content creator.  

Although there may not be any qualifications whatsoever to exist, these creators have to constantly reinvent themselves just like the applications that they are on. They have to think of new content to sustain themselves to be relevant in the public eye. At times this also leads to posting controversial content on such apps just so that they get enough ‘visibility’. It has become increasingly difficult for these influencers to post anything unabashedly or without a care in the world without having due regard to the legal repercussions that it will follow. For instance, when it comes to advertising products in the market via the medium of social media, the Advertising Standards Council of India (“ASCI”) has issued guidelines for digital advertising of such products.  This article will deal with the due diligence that is to be carried out by online content providers before uploading any products on their social media platforms. 

Legal regulations 

ASCI guidelines

Online marketing or digital marketing has been an untapped source since the inception of these social media platforms, but now things have changed. Big brands, producers of big-budgeted films, etc. also use the medium of social media to promote their products or films. When the practice first started the laws weren’t that strict, no party could be held liable. The scenario has now changed by the introduction of ‘Guidelines For Influencer Advertising In Digital Media‘ (“Guidelines”) which has been introduced by ASCI. 

Initially, the draft regulations which were first implemented in February 2021 set out guidelines that have to be followed by influencers and subsequently asked for their comments and suggestions as well.  After taking into consideration all the suggestions made, the ASCI then formally introduced the guidelines which were effective from 14 June 2021.

As per these guidelines, an influencer is, “An Influencer is someone who has access to an audience and the power to affect their audience’s purchasing decisions or opinions about a product, service, brand or experience, because of the influencer’s authority, knowledge, position, or relationship with their audience, An influencer can intervene in an editorial context or in collaboration with a brand to publish content.” An influencer can also be a celebrity who has millions of followers. An influencer does not necessarily have to be a Natural Person. The ASCI guidelines do not leave any room for manipulation of these Guidelines. It states the definition of a Virtual Influencer which means any fictional computer-generated avatars who have realistic characteristics and behave in a manner akin to influencers. 

Henceforth, all social media posts published by such influencers or their representatives on digital media have to carry a disclosure label as per the specifications set out in the Guidelines, identifying such posts as advertisements. 

Although no disclosure would be necessary if the influencer in question is simply posting about any product or service that he/she may have purchased without having any material connection with the advertiser whatsoever. However, if any material connection at all exists, a disclosure is a must, even if the content of the post is based on an unbiased evaluation originating solely and independently from the influencer. 

What does material connection mean? 

Any connection between an entity providing a product or service and an endorser, reviewer, influencer, or person making a representation or publishing the communication that may affect the weight or credibility of the representation, and that could include benefits and incentives, such as monetary or other compensation, free products with or without any conditions attached, discounts, gifts, contests and sweepstakes entries, and any employment relationship. Material connection or payment could be free products including those received unsolicited, direct monetary exchange trips or hotel stays, media barters, coverage, awards, with the expectation—explicit or implied—that promotion or inclusion of the advertiser’s products in a post occurs immediately or eventually.

Obligations 

Several obligations are laid on both influencers and advertisers. The Guidelines require all influencers and advertisers having accounts on any digital platform to carry a pre-approved disclosure label (such as #ad, #collab, #promo, #sponsored, or #partnership). This enables the user to identify that the post/ story is promotional and that it can be deemed as an advertisement. A virtual influencer must disclose to the consumers that they are not interacting with a real human being. This disclosure must be upfront and prominent. The said disclosure should not be placed in the “ABOUT ME” profile page, bios, at the end of posts or videos, or anywhere that requires a person to click on MORE. This will serve absolutely no purpose. The disclosure must also not be buried in the midst of a multitude of hashtags. 

Similarly, the Guidelines also mandate superimposing of disclosure labels upon the photo/video, if an advertisement is made by way of posting it on a Snapchat/Instagram story, which is not accompanied by any text. The guidelines further state that if the videos last 15 seconds or less, the disclosure label must stay for a minimum of 3 seconds. And for videos that last longer than 15 seconds, but less than 2 minutes, the disclosure label should stay for 1/3rd the length of the video. Lastly, for videos that are 2 minutes or longer, the disclosure label has to stay for the entire duration of the section in which the promoted brand or its features, benefits, etc are mentioned. In the case of live streams, the disclosure label should be announced by the influencer at the beginning and the end of the broadcast. If the post continues to be visible after the live stream is over, appropriate disclosure must also be added to the text/caption. In the event of it being an audio media, the disclosure must be clearly announced at the beginning and the end of the audio, and before and after every break that is taken in between to make the general public aware that it is in fact an advertisement. The disclosure must be in the English language or the language that an average consumer can comprehend.

New addendum 

As of 15th July 2021, a new addendum was added to the guidelines. It states that if an influencer or an advertiser wants to dispute that a piece of communication in question is not an advertisement as there is no material connection, then the following evidence will be required to be submitted to ASCII – 

  1. A declaration from the advertiser stating that there is no material connection between them and the influencer as of the date of the post. This declaration needs to be signed by a senior member of the advertiser’s organization such as the marketing head, legal/compliance head, digital marketing head, or similar.
  2. If the advertiser of the brand featured is difficult to trace despite reasonable efforts, or if the piece of communication features brands of multiple advertisers, then proof of purchase of featured products and brands, provided by the influencer, would be considered adequate evidence to refute material connection.

Consequences of non-compliance with the ASCI Guidelines 

The ASCI Guidelines do not specifically mention the complaint redressal mechanism. A person does have a right to file a complaint in case of non-adherence to Guidelines. The complaints may be made via phone or through ASCI’s website.

In addition to the ASCI, the Central Consumer Protection Authority (“CCPA”) has been set up under Section 10 of the newly amended Consumer Protection Act, 2019. The CCPA is responsible for handling complaints related to violations of consumer rights as a result of misleading advertisements. The CCPA can also direct the offending party/individual to discontinue a misleading advertisement or modify it and impose penalties such as a fine to the tune of INR 10, 00, 000 and an imprisonment term for two (2) years. In cases of subsequent violations, the fine, as well as the term of imprisonment, may be further increased to INR 50, 00, 000, and five (5) years respectively.

The influencers have also been advised to undertake proper due diligence before engaging in promotional advertisements and satisfy themselves that the advertiser shall be able to substantiate the claims made in the advertisement. The due diligence part can also be found in the amended Consumer Protection Act, 2019.

Foreign regulations

The United States of America has the Federal Trade Commission (“FTC”), which is the consumer protection body. It is responsible for handling various issues pertaining to influencer marketing in the country. The FTC has issued a set of guidelines ‘Disclosures 101 for Social Media Influencers‘  which discusses the rules that have to be adhered to when engaging in influencer marketing and how the influencers as well as brands engaging influencers can stay on the right side of the law.

Across the pond, in the UK, the Advertising Standards Authority has the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (“CAP Code”) which was then later extended to cover online and influencer marketing. The CAP code is more complex as opposed to its American counterpart. It differentiates between varied forms of paid and/or sponsored advertisements. However, these guidelines are more akin to the FTC Guidelines. What remains common is the requirement for representation of any commercial association in an obvious manner.

Conclusion

The definition of influencer in the guidelines is quite vague and ambiguous. Anybody can be an influencer, more so even a celebrity can be an influencer as there are no definite requirements. Although regulations concerning advertising undertaken by celebrities per se are already covered under the parent ASCII Code. In fact, some celebrities have been flouting the rules left, right, and center. Recently, Indian Cricket Team captain, Virat Kohli was under fire for failing to use the paid partnership tag on his post.  

It is extremely important to bear in mind that ASCI is a self-regulatory and voluntary governing organization without having any statutory backing. As a result, the Guidelines may not be statutorily enforceable. However, the ASCI Code has received judicial recognition from courts in India; the guidelines will surely take their time to receive such recognition. 

Having no statutory recognition as such, it will be rather interesting to see how this works out. There is a bit of grey area when it comes to what action is to be taken after a complaint has been registered. Can any action be imposed by way of fines and/or imprisonment on the influencer or the advertiser or the celebrity?  Can it adjudicate upon any disputes and award any damages? Merely suggesting or proposing steps to be taken in the future without any legal backing does not serve any purpose. 

References 

  1. https://www.mondaq.com/india/social-media/1075322/asci-releases-influencer-advertising-guidelines-for-digital-media–effective-14-june-21-onward.
  2. https://www.mondaq.com/india/social-media/1076110/advertising-standards-council-of-india-asci-releases-final-guidelines-for-influencer-advertising-on-digital-media?type=mondaqai&score=79.
  3. https://www.mondaq.com/india/advertising-marketing-branding/1082536/influencer-marketing-there-is-more-than-meets-the-eye?type=mondaqai&score=73.
  4. https://www.livemint.com/industry/advertising/asci-to-send-notice-to-virat-kohli-over-lovely-professional-university-post-11627462302082.html.
  5. https://www.moneycontrol.com/news/trends/entertainment/virat-kohli-may-be-flouting-ascis-guidelines-but-hrithik-roshan-is-not-7254461.html.
  6. https://www.moneycontrol.com/news/trends/entertainment/ad-regulator-asci-registers-100-complaints-in-a-month-against-influencers-flouting-guidelines-7274791.html.

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