This article is written by Kimaya Anavkar, a T.Y.LL.B. student at Kishinchand chellaram Law College.
Keywords: Influencer Marketing, Consumer Protection Act 2019, CCPA Guidelines, ASCI Guidelines, Mandatory Disclosure, Due Diligence, Misleading Advertisements
Abstract
Influencer marketing in India, which involves social media personalities promoting products, is now heavily regulated. This article provides a detailed exploration of the key legal aspects of influencer marketing, focusing centrally on the Consumer Protection Act, 2019, and the subsequent CCPA Guidelines (2022). Under this framework, influencers are legally defined as “endorsers” and can be held personally liable for false or misleading advertisements. This liability includes significant penalties, which can be up to ₹10 lakh for a first offense.
We will conduct an in-depth analysis of the critical rules for mandatory disclosure, including the specific formats required, and unpack the legal requirement of due diligence. The article also covers the complementary ASCI Influencer Guidelines (2023), providing a clear, comprehensive overview for influencers, brands, and consumers on the new standards of digital transparency and accountability.
INTRODUCTION: WHAT IS INFLUENCER MARKETING?
In today’s digital landscape, influencer marketing has evolved from a niche strategy into a dominant commercial force. It involves social media personalities—individuals with significant followings; promoting brands or products to their dedicated audiences. This form of promotion is uniquely effective because it leverages the trust and perceived authenticity between a creator and their followers.
However, this very effectiveness is what has drawn legal scrutiny. When an endorsement “affects consumer choices”, it is no longer just personal content; it becomes advertising. As such, it is now firmly “subject to advertising and consumer protection laws” in India.
What was once a largely unregulated digital space has seen a seismic shift. This article provides a detailed legal analysis of this new regulatory framework, designed for consumers, brands, and influencers. We will primarily explore the Consumer Protection Act, 2019, which serves as the parent legislation and redefines influencers as “endorsers”, making them legally liable for their promotions.
We will then conduct an in-depth examination of the CCPA Guidelines for Endorsements (2022) , which are the “main legal guideposts” outlining specific, mandatory rules. This includes the non-negotiable requirements for “Mandatory Disclosure” and, crucially, the new legal burden of “Due Diligence”. Finally, we will analyze the ASCI (Advertising Standards Council of India) Guidelines (2023), which complement the CCPA rules and establish practical standards for digital ads.
This article will break down what these laws mean, the penalties for “false or misleading claims” , and how these regulations collectively aim to “Protect consumers from deceptive ads” by making influencer marketing “ethical and transparent”.
THE CORE LEGAL FRAMEWORK: CONSUMER PROTECTION ACT, 2019
The primary legislation that anchors all influencer-related regulations is the Consumer Protection Act, 2019 (CPA). This Act was a major overhaul of India’s consumer laws, and it specifically brought digital and e-commerce transactions, including endorsements, under its wide umbrella.
(a) Influencers as “Endorsers”
The most significant legal shift under the CPA is how it defines an influencer. The law does not see them as just “creators”; it formally designates them as “endorsers”. An endorser is anyone who makes a representation or statement in an advertisement that consumers see (or are likely to see) as reflecting their personal opinion or belief, regardless of whether they are an expert.
This classification is the lynchpin of their liability. Legally classifying an influencer as an endorser places them on the same footing as a celebrity or a model in a traditional advertisement. The consequence is stark: if they make “false or misleading claims” about a product or service, they “can be held liable along with the brand”.
(b) CCPA and Penalties for Violations
The CPA, 2019, established a new regulatory body with significant power: the Central Consumer Protection Authority (CCPA). The CCPA’s mandate is to protect, promote, and enforce the rights of consumers. It has the authority to investigate and penalize unfair trade practices, which include false or misleading advertisements.
The severe financial penalties for non-compliance act as a strong deterrent:
- First Offense: The CCPA can impose a penalty of up to ₹10 lakh.
- Subsequent Offenses: For every following offense, the penalty can be as high as ₹50 lakh.
These penalties can be levied on the influencer, the brand, or both, reinforcing the idea of shared responsibility.
CCPA GUIDELINES (2022): THE RULEBOOK FOR INFLUENCERS
To provide specific clarity for digital advertising, the Ministry of Consumer Affairs issued the “Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022” (CCPA Guidelines). These primary ‘legal guideposts’ for influencers rest on two core principles: mandatory disclosure and due diligence.
Rule 1: Mandatory Disclosure
This is the bedrock of the guidelines. The CCPA mandates that any influencer must “clearly disclose” if they have any “material connection” with the brand.
- What is a “Material Connection”? It’s not just about brands paying influencers. The guidelines are broad and include payment, free products (gifts), collaborations, or any other “incentive”. If an influencer receives a free laptop, a free hotel stay, or even free a-la-carte services in exchange for a post, that is a material connection and must be disclosed.
- How to Disclose: The disclosure must be in clear, simple language. The guidelines specifically approve terms like “Advertisement,” “Sponsored,” or “Paid Partnership with…”. Vague terms like “collab,” “spon,” or “thanks [Brand]” are not considered compliant.
Rule 2: Format of Disclosure
The guidelines are not just about what to say, but how to say it. The disclosure must be “visible and upfront” and “not hidden in captions”. The goal is to ensure a consumer sees the disclosure before they engage with the promotional content.
The rules are specific to the media format:
- For Image/Text Posts (e.g., Instagram): The disclosure must be placed upfront, ideally in the first few lines or on the image itself. It cannot be buried in a hashtag list or after the “read more” fold.
- For Videos (e.g., YouTube, Reels): The disclosure must be shown “during the promotion segment”. A simple tag at the beginning or end of a long video is not enough if the promotion happens in the middle. The disclosure should be superimposed on the video while the product is being discussed.
- For Audio (e.g., Podcasts): The disclosure must be stated “verbally” at the beginning and end of the promotional segment.
- For Live Streams: A disclosure must be displayed “continuously” throughout the stream (e.g., as a pinned comment or a permanent overlay).
Rule 3: Due Diligence
This is arguably the most significant legal burden the guidelines place on influencers. The guidelines mandate that influencers must perform “due diligence” and “verify facts before promoting a product”.
This means an influencer can no longer act as a simple “hired mouth” by reading a script provided by the brand. They have a legal responsibility to conduct a basic level of verification.
- Example from the Guidelines: The text gives the example of claiming a product is “100%”. If a brand asks an influencer to say their protein powder is “100% whey,” the influencer should ask for the product’s lab reports or certification.
- Legal Implication: If the influencer makes a claim (“this product cures hair fall in 3 days”) without any verification, and the claim turns out to be false, they cannot claim ignorance. They are liable for misleading consumers because they failed to perform their due diligence.
ASCI GUIDELINES (2023): STRENGTHENING THE RULES
Working in parallel with the government’s CCPA rules is the Advertising Standards Council of India (ASCI), a self-regulatory body. While the CCPA provides the force of law and penalties, ASCI’s guidelines focus on the “how-to” of ethical advertising in the digital space. The ASCI Influencer Guidelines (2023) “complement CCPA rules” by providing a practical, specific framework that influencers and brands must follow.
While ASCI itself doesn’t issue fines, it plays a critical enforcement role. It actively monitors digital content and, when it finds non-compliant ads, it reports them to the CCPA. This referral “effectively gives its guidelines regulatory teeth,” as the CCPA can then take punitive action.
Here are the key highlights from the ASCI rules, explained in detail:
- Language of Disclosure: The guidelines state that “Disclosures must be in English or the regional language used” in the advertisement.
- Detailed Implication: This is a crucial practical point aimed at preventing deception through language barriers. If an influencer creates a video entirely in a regional language, like Tamil or Marathi, but places the “Sponsored” tag in English, the target audience may not understand that it is an ad. The rule ensures that the disclosure is as accessible and understandable as the promotional content itself.
- No Blanket Disclaimers: ASCI explicitly states that “Blanket disclaimers… are not sufficient” . The source provides the common example of putting a “link in bio” to a page that lists brand partnerships.
- Detailed Implication: This rule means that an influencer cannot just put “#ad” or “#sponsored” in their profile bio and have it cover all their content. The disclosure must be per-post. Each individual sponsored post, video, or story must contain its own clear and visible disclosure. The consumer must be informed that the specific content they are viewing at that moment is an advertisement.
- Virtual Influencers: In a very modern provision, the guidelines cover AI-generated influencers. These “virtual influencers (AI avatars) must also disclose they’re not real persons” .
- Detailed Implication: This rule tackles a futuristic form of deception. An endorsement’s power comes from the belief that a person is sharing their genuine opinion or experience. An AI avatar cannot “experience” a product. Its testimonial is entirely scripted. This disclosure ensures that consumers are not misled into thinking a real person is vouching for a product when it is, in fact, a non-human marketing tool.
- Joint Accountability: The ASCI code reinforces the CCPA’s legal stance: “Both brand and influencer are jointly accountable for misleading ads” .
- Detailed Implication: This means neither party can shift the blame. The brand cannot claim it was the influencer’s fault for “going off-script,” and the influencer cannot claim they were “just reading a script” provided by the brand. Both are responsible for the final advertisement that the public sees. This forces a higher level of communication and fact-checking between brands and influencers before a campaign ever goes live.
RELEVANT CASE REFERENCE & CONSUMER RIGHTS
These regulations are not just theoretical; they are being actively enforced, as demonstrated by recent CCPA actions.
- Case Reference: CCPA v. Endorsers of Patanjali Ayurved (2023):
- Detailed Implication: This 2023 action serves as a powerful precedent for the entire industry. In this significant case, the “CCPA warned celebrities endorsing misleading health claims” . The authority explicitly put high-profile endorsers on notice, reminding them of their legal duty to “verify facts before promotion” . This case is critical because it shows the CCPA is directly targeting the “Due Diligence” requirement from the 2022 Guidelines. It demonstrates that the CCPA is “showing strict enforcement” and is perfectly willing to hold even the most “high-profile endorsers accountable for their due diligence failures.” This warning shot signals to all influencers that ignorance is not a valid legal defense.
- Consumer Rights & Legal Recourse:
- Detailed Implication: Ultimately, these laws and guidelines are designed to empower consumers. The legal framework provides a clear path for remedy. “If a consumer suffers harm or loss” —whether financial loss from a useless product or physical harm from a misleading health claim—they are not without options. They have the legal right to “file a complaint before the Consumer Commission or CCPA” . This mechanism is the entire point of the regulations; it ensures that the laws “Protect consumers from deceptive ads” and “Make influencer marketing ethical and transparent” by providing real consequences for violations.
CONCLUSION: WHY IT MATTERS
The rise of influencer marketing in India has been met with a robust and necessary legal response, signaling the end of the unregulated era of digital endorsements. The legal landscape has been fundamentally altered by the Consumer Protection Act, 2019, which redefined the role of a social media creator as a legal “endorser”. This classification is the cornerstone of all new liabilities, moving influencers from passive content creators to active participants in the advertising ecosystem.
The CCPA Guidelines (2022) and the complementary ASCI Guidelines (2023) have provided a clear, actionable rulebook. The two non-negotiable pillars of this framework are transparency through “Mandatory Disclosure” and accountability through “Due Diligence”. Influencers can no longer claim ignorance by simply reading a brand’s script; they are now legally required to “verify facts before promoting a product”.
This new framework of shared accountability—where “Both brand and influencer are jointly accountable for misleading ads” —is backed by significant penalties, including fines of up to ₹10 lakh for a first offense. This sends an unmistakable message to the industry: deceptive practices will not be tolerated.
Ultimately, these regulations serve a single, critical purpose: to “Protect consumers from deceptive ads”. By empowering consumers with the right to file a complaint “before the Consumer Commission or CCPA” if they suffer harm or loss, the law has re-balanced the scales. This legal evolution is not designed to stifle the creator economy but to “Encourage honest digital advertising” , ensuring that the future of influencer marketing is built on a foundation of trust, ethics, and transparency.
FREQUENTLY ASKED QUESTIONS (FAQS)
Q1: What if an influencer just posts “link in bio”? Is that a legal disclosure?
A: No. That is not considered a sufficient disclosure. Both the CCPA and ASCI guidelines are clear that a disclosure must be upfront and hard to miss. A “link in bio” requires the user to take an extra step and navigate away from the post, so it is not a valid or “upfront” disclosure.
Q2: Is an influencer liable even if they were just gifted a product and not paid money?
A: Yes. The CCPA guidelines apply if the influencer has received any incentive, which includes “payment, gifts, or collaborations”. A free product or service is considered a “material connection” to the brand, and the failure to disclose this relationship is a violation.
Q3: What can I do if I buy a product based on a false claim by an influencer?
A: If you suffer a loss or harm due to a misleading endorsement, you can file a complaint. You can approach the district or state Consumer Commission or file a complaint directly with the Central Consumer Protection Authority (CCPA).
Q4: Do these rules apply to small influencers, or only big celebrities?
A: The rules apply to anyone acting as an “endorser”. The law does not specify a minimum follower count. If a person has a “material connection” to a brand and is promoting a product to their audience, they are considered an endorser and must follow the guidelines, regardless of their size.
Q5: What about AI or virtual influencers? Are they exempt?
A: No, they are not. The ASCI guidelines specifically address this, stating that “virtual influencers (AI avatars) must also disclose they’re not real persons”. This is to ensure that consumers are not being deceived into thinking a non-human entity is giving a personal, human-based testimonial.
REFERENCES
- The Consumer Protection Act, 2019
- Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 (CCPA Guidelines)
- ASCI Influencer Guidelines, 2023
- CCPA v. Endorsers of Patanjali Ayurved (2023)
