1. Influencers Can Be Treated as Endorsers
Under the consumer-protection framework, an influencer who promotes or endorses a product or service can potentially be treated as an "endorser."
An endorsement should represent the endorser's genuine and reasonably current opinion and should be based on adequate information or experience regarding the advertised product or service. The endorsement must not be misleading.
Therefore, an influencer cannot necessarily avoid responsibility simply by arguing that they were paid by the brand if they personally communicated a misleading claim to consumers.
2. Due Diligence Is Important
The 2022 CCPA guidelines specifically require endorsers to exercise appropriate due diligence before making an endorsement.
For example, if an influencer promotes a product by claiming that it produces a particular result, the influencer should have a reasonable basis for making that representation rather than simply repeating an unsupported claim supplied by the advertiser.
This is particularly important when the claim concerns matters such as health, safety, performance, effectiveness, financial returns, educational results, or other objectively verifiable benefits.
3. Paid and Commercial Relationships Should Be Disclosed
If there is a material connection between the influencer and the advertiser that could affect the credibility of the endorsement, that relationship should be clearly disclosed when consumers would not reasonably expect it.
This can include relationships such as payment, free products, discounts, sponsorships, commissions, or other commercial arrangements.
The purpose is to allow consumers to understand that the influencer has a commercial relationship with the brand.
4. Consumer Protection Act, 2019
Section 21 of the Consumer Protection Act, 2019 gives the Central Consumer Protection Authority powers to take action against false or misleading advertisements.
Where the CCPA determines that an advertisement is false or misleading and prejudicial to consumer interests, it can direct the concerned advertiser, manufacturer, trader, endorser, or other relevant party to discontinue or modify the advertisement.
The Act therefore does not limit enforcement only to the company that manufactures or sells the product. Endorsers can also fall within the scope of enforcement.
5. Financial Penalties
For a manufacturer or endorser, the CCPA can impose a penalty of up to ₹10 lakh for a misleading advertisement.
For every subsequent contravention, the penalty can extend to ₹50 lakh.
The actual penalty is not automatically the maximum amount. The law requires relevant circumstances to be considered when determining the penalty, including the population and area affected, frequency and duration of the conduct, vulnerability of affected consumers, and revenue generated from the relevant sales.
6. Influencer Endorsement Restrictions
The CCPA can also prohibit an endorser from endorsing products or services for a period of up to one year for a false or misleading advertisement.
For a subsequent contravention, the prohibition can extend to three years.
This means that an influencer could potentially face consequences beyond a financial penalty if the statutory requirements for action are satisfied.
7. Due-Diligence Defense
An important protection exists for endorsers.
Under Section 21(5) of the Consumer Protection Act, an endorser is not liable to the penalty under the relevant provisions if the endorser has exercised due diligence to verify the truthfulness of the claims made in the advertisement concerning the product or service.
Therefore, liability is not necessarily automatic merely because an influencer participated in an advertisement. The circumstances of the endorsement and the influencer's due diligence can be important.
8. Disclaimers Do Not Automatically Make a False Claim Legal
An influencer cannot necessarily cure a misleading advertisement simply by adding a small disclaimer.
The CCPA's advertising guidelines provide that disclaimers should not be used to conceal material information or to correct a misleading claim made in an advertisement.
A disclosure such as "paid partnership" may reveal the commercial relationship, but it does not automatically make an unsupported product claim truthful.
9. Additional Laws May Apply
Depending on the product and the nature of the representation, other Indian laws and sector-specific regulations may also become relevant.
For example, additional restrictions may apply to advertisements involving healthcare, medicines, financial products, food, education, gambling or betting, tobacco and other regulated products or services.
The CCPA has also stated that advertisements for activities or products prohibited under other laws can attract enforcement, including where celebrities and influencers participate in the promotion.
10. Possible Consequences
Depending on the circumstances and applicable law, an influencer involved in a misleading advertisement may therefore face:
- Directions to discontinue or modify the advertisement.
- Financial penalties.
- Temporary prohibition from making endorsements.
- Platform or advertiser action against the promotional content.
- Consumer complaints and related proceedings.
- Potential civil or other legal consequences under applicable laws.
- Additional regulatory action where the promoted product or service is subject to specific advertising restrictions.
Conclusion
Influencers in India are not automatically protected from legal responsibility simply because they are promoting someone else's product. Where an influencer makes or communicates a false, deceptive, or unsupported claim, the Consumer Protection Act, 2019 and the CCPA's 2022 endorsement guidelines may apply.
Influencers should therefore verify material claims before promoting them, disclose relevant commercial relationships clearly, avoid making unsupported guarantees or exaggerated representations, and retain evidence showing the basis on which important claims were verified.
At the same time, liability is not automatic in every case. The influencer's role, knowledge, conduct, due diligence, the nature of the claim, and the applicable legal provisions are important in determining whether enforcement action is justified.
