The Government has plans to introduce a new set of regulations that will affect influencers heavily. If the regulations come into place, influencers could be charged from INR 10 lakhs to 50 lakhs for not disclosing their financial ties with the brands that they advertise.
The regulations aim to increase transperancy by making influencers resposible for being honest with their audience. They will no longer be able to post advertisements without making it explicitly clear that they are paid endorsements.
“Guidelines for social media influencers are ready and will be released shortly.” Mint quoted Nidhi Khare, chief commissioner of the Central Consumer Protection Authority (CCPA), at a press conference. “Influencers will have to disclose their ties while marketing a product, failing which they will be fined up to ₹10 lakh. For a subsequent offence, it will be ₹20 lakh, and it can go up to ₹50 lakh.”
While this certaintly means that influencers will have to tread carefully while endorsing products, the move has many benefits. If implemented well, it could become a step in the right direction for consumers.
Nainika, who goes by @badassbrownbeauty on Instagram and posts videos related to skin and hair care, believes it is important to be transparent with one’s followers. She says, “It’s the ethical thing to do. When your followers take your recommendations into account while purchasing something, they’re trusting you. Misleading them about the fact that you received compensation for posting something breaks that trust, and robs people of their right to make an informed purchase.”
However, until they actually release the regulations, the true extent cannot be known. “There hasn’t been enough clarity about the new regulations, in my opinion,” Nainika adds. “However, from what I’ve understood, smaller influencers won’t be affected by the new fines and taxes as much as bigger ones, since there’s a minimum product value beyond which influencers would be charged.”
Aside from disclosing the nature of a paid partnership, it is equally important for influencers to have and share complete information regarding the product. Failing to do this can also lead to followers feeling cheated.
“The most important research is testing out the product yourself for a reasonable amount of time, so that you can form a proper opinion about it before advertising it to your followers.” Nainika shares. “Besides this, it’s also important to research the brand you’re advertising, to ensure that your values align with theirs.”
In 2017, similar issues came to light during the Fyre Festival scam. Approximately 8,000 people bought tickets to the fraudaulent music festival. Kendall Jenner, Bella Hadid, Emily Ratajkowski and Elsa Hosk were criticized for advertising it in their Instagram posts. They did not initially mention that their posts were paid advertisements. Understandably, it upset fans when the festival turned out to be nothing like the models’ Instagram posts. Instead of the luxurious stay promised, festivalgoers were greeted with tents and plain cheese sandwiches.
Bella Hadid later went on to issue an apology for promoting the festival. She confessed that she was not “informed about the production or process of the festival in any shape or form”. This is a concerning admission. After all, a section of her fans lost time and money after putting their faith in her.
Such instances put reasonable fears in the minds of both consumers and authorities. With new social media bloggers breaking into the spotlight everyday, stricter accountability is a must. The fines may seem steep and scary for influencers, but more information will come to light with release of the official regulations.