Influencer marketing and brand endorsements have emerged as dominant strategies in digital advertising. However, these practices also pose significant legal and ethical concerns, especially regarding false endorsements, misleading advertisements, and consumer liability.

This paper explores the legal framework governing influencer marketing in India, particularly under the Consumer Protection Act, 2019, and the guidelines issued by the Advertising Standards Council of India (ASCI). It analyzes the scope and enforcement of legal obligations, the responsibilities of influencers and brands, and the implications of non-compliance. The study also compares global best practices to suggest improvements in the current regulatory landscape.

Introduction
In the digital age, influencers have become powerful intermediaries between brands and consumers. With the ability to sway consumer behavior, influencers serve as modern-day endorsers whose opinions can significantly impact purchasing decisions. However, the line between genuine endorsement and deceptive marketing is often blurred, raising questions about accountability and truthfulness in advertising. Legal frameworks have evolved to address these concerns, seeking to protect consumers from misleading and false advertising.

The Evolution of Influencer Marketing

Influencer marketing leverages individuals with significant online followings to promote products or services. While traditional endorsements were largely regulated through formal contracts and governed by established advertising codes, influencer marketing often operates in a more informal and decentralized space, making regulation challenging. The rapid growth of this form of marketing necessitated legal reforms to ensure that consumers are not misled.

Legal Framework in India

1. Consumer Protection Act, 2019

   The Consumer Protection Act, 2019, represents a significant reform in Indian consumer law. Key provisions include:
   • Section 2(47): Defines "misleading advertisement" as one which falsely describes a product or gives a false guarantee.
   • Section 21: Empowers the Central Consumer Protection Authority (CCPA) to impose penalties and ban misleading advertisements.
   • Endorser Liability: Influencers and endorsers can be held accountable for false claims, especially if they failed to perform due diligence.
      

2. ASCI Guidelines for Influencer Advertising in Digital Media (2021)

   The ASCI guidelines aim to ensure transparency in influencer-brand relationships. Key points include:
   • Mandatory disclosure of material connections using hashtags like #ad, #sponsored, #collab.
   • Clear and prominent visibility of disclosures.
   • Due diligence requirement for influencers to verify claims made in endorsements.
      

Key Legal Issues in Influencer Marketing

1. False Endorsements

   Influencers may unintentionally or deliberately make claims that are not substantiated by evidence. Under business law and consumer protection statutes, both the influencer and the brand can be held accountable for such misrepresentations.
    

2. Misleading Advertisements

   A misleading ad is one that creates a false impression or omits key information. Indian law mandates that such practices are punishable with fines, bans, or corrective advertisements.

3. Endorser Liability and Due Diligence

   Endorsers are expected to exercise due diligence. This means they should verify the claims of the product before endorsing it. The failure to do so can result in legal action by regulatory authorities.
    

  Comparative Analysis with International Standards

1. United States: FTC Guidelines

   The Federal Trade Commission (FTC) requires clear disclosure of material connections and has taken action against influencers and brands for deceptive endorsements.

2. United Kingdom: ASA Guidelines

   The UK's Advertising Standards Authority enforces stringent disclosure norms and has penalized non-compliance by both influencers and brands.

India's framework is broadly aligned with these standards, though enforcement remains a challenge.
 

Challenges in Enforcement

• Lack of Awareness: Many influencers, especially micro-influencers, are unaware of legal obligations.
• Jurisdictional Issues: Digital content can cross borders, complicating enforcement.
• Monitoring and Compliance: Regulating the vast volume of influencer content is resource-intensive.
   

Recommendations

• Mandatory Training: Introduce compulsory legal training for influencers and digital marketers.
• Technological Solutions: Use AI to monitor and flag potential violations in influencer content.
• Enhanced Collaboration: Strengthen coordination between ASCI, CCPA, and social media platforms for better enforcement.

Conclusion
Influencer marketing is a powerful tool, but with great power comes great responsibility. The legal framework under the Consumer Protection Act and ASCI guidelines represents a progressive step toward ensuring accountability in digital advertising. However, better enforcement, increased awareness, and international cooperation are essential to protect consumer rights and uphold advertising integrity in the digital era.

References:

1. Consumer Protection Act, 2019
2. Advertising Standards Council of India (ASCI) Guidelines, 2021
3. Federal Trade Commission (FTC) Endorsement Guides
4. Advertising Standards Authority (UK) Code
5. Central Consumer Protection Authority (India) Notices and Orders