Following years-long discussions over punitive actions against social media influencers failing to disclose their financial ties with brands, the Central Consumer Protection Authority (CCPA) has finally given its verdict. The government has now agreed to regulate the system, with a penalty of INR 50 lakh for violation. CCPA's Chief Commissioner, Nidhi Khare, in an official statement states, “Guidelines for social media influencers are ready and will be released shortly. Influencers will have to disclose their ties while marketing a product, failing which they will be fined up to ₹10 lakh," Khare said on the sidelines of a press conference. “For a subsequent offence, it will be ₹20 lakh, and it can go up to ₹50 lakh."

There have been plenty of cases where influencers have missed disclosing the benefits, whether in cash or kind, over their social posts. Khare also asserts how many social media influencers subtly insert brand names into their posts, making them appear authentic. This new move is expected to ensure transparency in the overall influencer-brand intentions & actions, bring the exact picture to the forefront for each of their promotional deals and eventually beget authenticity. 

Raminder Singh, Founder & CEO, Celebfie looks at it as a welcome step. For him, while influencer marketing is a great medium for brands, it's currently an unorganised space. "These regulations will help to make it more transparent for the consumers and end users of products which includes every one of us. However, what needs to be ensured is that these regulations do not come in the way of the creative freedom of influencers. 

All the social platforms too should think of tweaking the way these collaborative posts can be made to look more obvious on the platforms.," he suggests.

Animesh Agarwal, Founder & CEO, 8Bit Creatives also views it as a substantial decision and a pragmatic approach toward increasing transparency. "Viewers get easily swayed by the content put out by their favourite creators and hence it becomes crucial for them to know the legitimacy of the endorsement. These guidelines will ensure that influencers give a fair assessment of the product that they are endorsing without just boasting about its positives. Another benefit of this decision is that it protects consumers from fake reviews related to the product."

Even Rohit Agarwal, Founder & Director, Alpha Zegus thinks it was a much-needed measure. At present, many brands are requesting creators to make the content look more organic and authentic. It hurts the long-term growth of the creator, as the audience finds it difficult to believe their opinion. Strict implementation of these guidelines will be beneficial for the creators and the audience," he comments.

In July last year, the Advertising Standards Council of India (ASCI) also started monitoring digital and social media platforms for violations of its influencer advertising guidelines about labelling paid promotions by influencers. However, this could not generate the requisite impact.

Ambika Sharma, Founder & MD, Pulp Strategy, on the other hand, believes that it is the size and growth of this industry have caught the government's attention. "The clauses seeking honesty of statements and due diligence, and conditions laid for expert endorsements will put unnecessary litigation burden on influencers. Especially micro-influencers may become over cautious as they don't have resources for potential litigation.

The rules now only place unnecessary roadblocks and scepticism in the minds of endorsers. A simple and mandatory disclosure specifying the paid content and their personal experience of its usage could solve the problem. The guidelines may scare smaller influencers and in turn deter the growth of the digital advertising industry for a while but may benefit in the long term. In the long run, this will lead to more responsible behaviour in the digital marketing ecosystem," she emphasises. 

Amit Mondal, Founder, Pulpkey gives out a rather practical perspective to the entire narrative. “Instead of making the fines fixed for all influencers, it could be based on the size and type of influencers. This news needs to be brought to the attention of everyone in the industry, especially micro-influencers. Micro-influencers have a significantly lower income, so the fines should be focused more on celebs. And rather than focusing on penalising influencers, we should raise awareness about why they bring value and more credibility to their followers by fairly disclosing their partnership with brands they work with,” he sums.

According to some estimates, the Indian influencer marketing industry is valued at nearly INR 900 crores and could surpass INR 2,000 crores by 2025. With this new development, brands will henceforth be compelled to select the right fit for their respective products or services to get genuine reviews for their consumers. Considering how the earlier established guidelines were being taken leniently, a strict approach regarding this was necessary for the betterment of the consumers. Hopefully, this will also improve the relationship between the influencers and the consumers and build trust in and within the community.