Endorsement disclosure – Fine violators, do not jail them

Source: The post is based on the article “Endorsement disclosures – Fine violators, do not jail them” published in Business Standard on 24th January 2023.

Syllabus: GS 2 – Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Relevance: About guidelines for social-media influencers and celebrities.

News: Recently, the government issued guidelines for social-media influencers and celebrities.

About the endorsement guidelines for social-media influencers and celebrities

What is the need for guidelines for social-media influencers and celebrities?

Disclosures are important particularly in the case of social media because it’s relatively easy to distinguish an advertisement from other content on other mediums, such as television.

What are the concerns associated with the guidelines for social-media influencers and celebrities?

Punishment for violation is too harsh: For instance, influencers could be fined up to Rs 10 lakh, and for repeated offences, the fine can go up to Rs 50 lakh. Violations can also lead to influencers getting debarred and jailed for six months, extending up to two years.

The jail term for such an offence as a violation of endorsement disclosure rules seems contrary to the government’s broader effort to decriminalise economic offences. Further, as a 2022 study showed, stringent rules have not stopped misleading advertisements.

Not easy to identify compensation: The connection with advertisers may include monetary or non-monetary compensation, media barter, trips or hotel stay, discounts, gifts, and so on.  But, such disclosures are not easy for the audience to recognise. Further, they may not unduly influence their opinion and decision-making.

The government does not have the capacity to enforce: The government would need the significant capacity to oversee a large number of influencers.

The government needs a balance between the state’s capacity and the laws.