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2025 Influencer Compliance Report: A Gloomy Snapshot Of Guidelines Disregarded

  • seo835
  • Jul 30
  • 6 min read

With the growing influence of social media, the advertising trends have drastically shifted to social media influencing which essentially focuses on promoting a product through an influencer, typically an individual with significant online followers. A recent report by Quoruz, reveals that India’s influencers count has surged with a 322 percent growth rate. This sudden and enormous growth can be imputed to precision targeting, as these influencers accurately reach the targeted audience thereby emphasizing the effectiveness of the advertisement. The reasons attributed to this sudden surge are authenticity and reliability. The consumers largely rely on influencers regarding their everyday choices in comparison to T.V. commercials and other conventional modes of advertising as they perceive a personal connection with the influencers which seems deliberate and genuine.

 

A recent study by the Advertising Standards Council of India, however paints a gloomy picture. The Top Influencer Compliance Scorecard reveals that 69 per cent of the top 100 digital influencers, with a combined reach of over 110 million followers, did not meet the guidelines provided for influencers on social media. “Fashion, Lifestyle, Telecom products” have emerged as the top violators according to the report. This report highlights the sombre state of social media influencing where the lines of authenticity seem blurred and loyal followers find themselves unconsciously deluded.


ASCI GUIDELINES


Advertising Standards Council of India (ASCI) is a voluntary self-regulatory organization which protects the interests of the consumers and also supports advertisers. On May 27, 2021, ASCI released the Guidelines for Influencer Advertising in Digital Media. (“Guidelines”) The preamble stresses on the need for disclosure pertaining to promotional content owing to monetary benefits with regards to social media influencing. It highlights the recent fuzzy lines between original content and advertisements and aims to protect the interests of the consumers.  ‘Influencer’ is defined as “an individual who has an audience whose purchase decisions or opinions about a product/service/brand can be changed due to the person’s authority, knowledge or relationship with the audience”. ‘Material connection’ between the advertiser and influencer is defined as a relationship which affects the representation of any commodity by the influencer. The definitions encompass a broader perspective and leave the scope for a wider illustration.

 

If an advertiser or an influencer claims that there exists no material connection, then the influencer needs to submit a bona fide declaration to the ASCI from any senior member of the  advertiser’s corporation stating the non-existence of any material connection. However, if the advertiser cannot be traced even after genuine efforts, receipt of purchase of the allegedly advertised or featured product can be regarded as appropriate evidence to refute any sort of material connection


DISCLOSURE


The Guidelines ask influencers to reveal their content as advertisement through a disclosure label if there exists a material connection which is not just limited to a monetary benefit or incentive rather includes free products and other benefits. The disclosure must be “upfront and prominent” and should be of such nature that it cannot be overlooked by an average customer. The guidelines go on to provide different labels which can be used for disclosure like partnership, collaboration, ad etc. The language of the disclosure can either be “English or the language of the advertisement itself”. The guidelines place responsibility on advertisers to make the influencers comply with the disclosures. The guidelines list out the precise and intricate positioning, manner and duration of the disclosure for photos, videos, audios and live streams.


The guidelines include a virtual influencer, defined as “fictional computer generated people” who possess human like characteristics and show behaviour similar to influencers. Virtual influencers are asked to comply with additional guidelines which include disclosing their non-human nature in a prominent manner, visible to an average consumer.

 

DUE DILIGENCE: WITH GREAT POWER COMES GREAT RESPONSIBILITY


The guidelines ask influencers to observe due diligence while promoting the products on their social media handles. The aim behind this is to make sure that influencers first review the assertions made by advertiser and satisfy themselves before advertising the product to prevent any harm to the consumers. The significance of due diligence was reiterated by Bombay High Court in the case of Marico Limited v. Abhijeet Bhansali 2020. The court highlighted the dominance that social media influencers hold over their followers in their everyday decisions which necessitates that influencers advertise their products responsibly.


FINFLUENCERS AND HEALTH INFLUENCERS


Since there is a possibility of substantial losses to customers in finance and health sectors, ICAI amended the 2021 guidelines on 17th August 2023. The guidelines state that anyone in the field of “Banking, Financial Services and Insurance”, commonly known as financial influencers or finfluencers categories should be ‘qualified’ to assist and advise masses and should disclose their qualifications upfront on their posts. The influencers related to stock market or investments must abide by the regulatory sectors including registration with SEBI and should display their registration number upfront. The influencers advising in the fields of “BFSI and Health and Nutrition”, must disclose their appropriate accreditation such as a medical degree and the necessary certifications outrightly.

 

FURTHER ADVANCEMENTS

 

Department of Consumer Affairs, in an attempt to substantiate the above mentions guidelines, published the ‘endorsement know-hows’, applicable on influencers, celebrities and virtual influencers. In 2022, The Central Consumer Protection Authority, via its power granted by Consumer Protection Act, 2019 issued Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 with the aim to protect consumers from deceptive endorsements. The guidelines apply to all mediums and forms of advertising including social media influencing. These guidelines reiterate various duties of advertisers as well as advertising agencies like disclosure and due diligence already laid down in ASCI Guidelines. Non Adherence of the above mentioned guidelines will result in a penalty of Rs. 10 lakhs on the liable persons including advertisers, endorser, influencer under section 21 of the Consumer Protection Act, 2019. Failure to adhere to the Consumer Protection Act, 2019 and any rules will lead to strict action. In the landmark case of Indian Medical Associations & Anr. Vs. Union of India & Ors, 2022, the S.C. emphasized on the identical  liability  and accountability for influencers and celebrities who indulge in deceptive or misleading advertisements. Justice SJ Kathawalla, remarked in the case of Marico case that “a social media influencer having the power to influence masses, to change attitudes and their mindset have a responsibility to verify that their content is not harmful to their followers.” According to the ASCI report, 2023-2024, out of the 8,299 advertisements analysed, 81% were found to be misleading. This report presents an alarming situation of deceiving advertisements necessitating immediate action.


[Image Sources: Shutterstock]
[Image Sources: Shutterstock]

Social Media Influencing is a great form of Advertising for brands as it is not only cost effective in comparison to traditional forms but social media platforms offer the advertisers with comprehensive analytics and target the specific demographics allowing them to assess the return on investments of influencer collaboration. However, as light and shadow shape the whole, there are many challenges which need to be addressed. Gaining fake followers and fake engagement is one of the most prevailing challenge associated with influencer marketing which create doubts in the minds of genuine followers.


The new disclosure report further presents a gleaming plight of the influencer industry necessitating a progressive advancement. Non-disclosure or improper disclosure leads to ambiguity in the posted content confusing followers into believing it to be honest review rather than an endorsement which defeats the very purpose of Consumer Protection Act, 2019. It is imperative to note that ASCI is a self-regulatory body resulting in non-binding nature of its guidelines. The influencer Marketing Report, 2024 suggests that “by 2028, more than 80% of brands will invest up to 30% of their marketing expenditure towards influencer marketing.” It is high time that the Indian government intervenes to provide a well-defined, structured and binding legislation governing influencer marketing to protect consumers.


Author:  Srashti Talreja, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

 

 REFERENCES

 

Influencer Marketing Report 2022, Financial Express. (2023, October 2). Rise and rise of influencers.

Al Akayleh, F. (2021). The influence of social media advertising on consumer behaviour. Middle East Journal of Management, 8(4), 344–366.

COMPLIANCE SCORECARD

Marico Limited v. Abhijeet Bhansali, AIRONLINE 2020 BOM 3109

Indian Medical Associations & Anr. Vs. Union of India & Ors, [2024] 6 S.C.R. 375 Kushwah, Neeraj. “No More Misleading Ads: Centre Mandates Self-Declaration Certificate for Advertising Agencies.” Live Law, 17 Feb. 2025, https://www.livelaw.in.

 

 
 
 

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