Fashion Law Journal
Influencers in this era are people who have developed a reputation for their insight and experience on a particular subject and showcases it through social media. They create broad followings of passionate, committed people who pay close attention to their views by making frequent posts about that subject on their favourite social media platforms.
Celebrities were the first influencers, and they continue to play a role, though their influence is diminishing.
Brands adore social media influencers because they can start trends and persuade their fans to purchase the goods they support. Celebrity endorsement spawned influencer marketing. It has always been in the knowledge of the businesses that when a celebrity supports or endorses their product, sales increase. Many businesses, especially high-end brands, continue to use celebrities as influencers.
Common people were able to gain fame via social media platforms such as YouTube, Instagram, and Twitter, resulting in the emergence of social media influencers.
Many people, especially teenagers, are influenced by social media influencers. Influencers are also working with celebrities to promote their films.
People trust social media influencers more than conventional celebrities because they have the picture of a girl/boy next door, making them more relatable. Since influencers communicate with their followers on a regular basis, followers, especially young people, feel closer to them.
Brands also tend to work with social media influencers over traditional celebrities because of the impact they have on young people and because supported content can easily be incorporated into the influencers’ regular content. It is clearly seen that influencer marketing is on the rise, and it’s influencing young people’s buying decisions. Furthermore, young people are more likely to study a product before purchasing it. They’ll even look at the ratings left by the influencers they follow.
The influence of advertising is undeniable. It holds the audience’s attention and encourages them to imitate a lifestyle that they believe is led by their heroes. In the early twenty-first century, no means of communication had a greater effect on the lives of ordinary people than television, and the same impact can now be seen across social media. Using goods or services recommended by celebrities or influencers allows ordinary people to feel closer to their heroes.
Influencer marketing, the newest type of marketing, entails businesses or organisations contacting Social Media Influencers to promote their brands. Companies nowadays use this technique by sending free goods to social media influencers in exchange for feedback or photos, inviting them to attend events where all is taken care of by the company, or sharing a specific message with their audience.
However, the problem with this type of marketing is that influencers may spread false or misleading information on these social media sites. This has been seen often with celebrities promoting goods with false statements in television ads and print media. To combat misleading ads, the government enacted new provisions in the Indian Consumer Protection Act, 2019, imposing penalties and liability on manufacturers and endorsers who promote or publish wrongful and misleading advertisements, as well as prohibiting the endorser from endorsing any products/services for a year.
The act includes a number of provisions aimed at strengthening current consumer protection laws. Since endorsers may be considered Social Media Influencers, the Consumer Protection Act of 2019 would apply to them if they are paying by advertisers to promote their goods or services.
One of the most relevant aspects of the Consumer Protection Act of 2019 is the responsibility of brand endorsers in the event that a customer is injured as a result of faulty products or services. False and misleading advertising will result in a penalty of up to INR 10 lakh for a manufacturer or endorser. A fine of up to INR 50 lakh can be imposed for a subsequent offence. A misleading advertisement’s endorser may also be barred from endorsing any good or service for a period of up to one year. The term of prohibition can be extended to three years for each subsequent offence. However, if the endorser has used reasonable care to check the veracity of the statements made in the commercial, he would not be subject to the law’s penalties.
The aim of the sanction is to hold celebrities or influencers more responsible for their comments or representations made when promoting goods or services. This is because the affiliation of celebrities or influencers with a specific product or service has been shown to have a strong connection with consumer purchasing patterns, as consumers perceive the endorsers’ representations to be their true belief or opinion, based on personal usage.
Endorsers are also required by law to perform previous due diligence in order to check the veracity of statements made about the products and services they promote. Endorsers can no longer claim ignorance to avoid certain legal responsibilities.
Currently, the Advertising Standards Council of India has established criteria only for a brand and a celebrity endorsing a brand, as well as obligations for the brand and celebrities when advertising a product or service in terms of validity, reputation, and responsibilities.
The ASCI, on the other hand, is working on a set of disclosure guidelines for social media influencers who advertise goods on the internet.
Though influencers are responsible for affecting only a small number of people, Karan Kumar, Chief Brand and Marketing Officer at Fabindia noted that even the people within that small group are customers at the end of the day. So, whether or not they are a member of a wider media community, everyone has the right to know what is being endorsed in terms of product in a straightforward manner. We can see this working internationally as a norm, and India must also start following this.
Influencers on social media are typically compensated based on their number of followers and user interaction. According to a Delhi high court ruling, ASCI does not have any punitive powers, but the decision of the council are binding on both members and non-members.
An agreement that permits a company to use a celebrity’s or an influencer’s name and social status to promote a product or a service by his or her consent is called an Endorsement Agreement. Such an endorser must be a renowned personality within the field of the aforementioned product or service. The endorser gets an endorsement fee for allowing the company to use his or her name and promoting the product or service on their behalf. Such endorsement agreement elucidates the terms and conditions of the endorsement, which may include advertising guidelines for the endorser, usage of the product or service, how to use such product or avail such service, etc. The agreement may also include additional responsibilities of the endorser, such as what clothes to wear while endorsing, how to act in the advertisement, how to promote the product or service in a specified way, etc.
Usually, there are only two parties indulged in an endorsement agreement, the company that produces the product or facilitates the service and the celebrity or influencer who endorses said product or service. To avoid any dispute arising between the parties at any point in time in future, the validity period of the agreement between the company and the endorser is cited in the agreement itself. Throughout the period till the agreement is valid, the company approves the providence of the product or service to the endorser as per the demand made by him or her, which shall be provided free of cost and will also form a part of the endorsement compensation.
Advertisements are made for the purpose of influencing consumers and creating an urge to use these products or services. But the company would not want to create a negative impulse. Thus, the endorsement agreement includes a moral clause that serves as the guideline on how to regulate detrimental activities of the endorser, which may reflect immoral effects on the brand image or the product or service. The purpose of such moral provisions is to strictly forbid some of the adverse behaviours in the personal life of the endorsers, which can be seen as sexual acts, drug abuse, scandals, etc., which might influence the consumers in a negative way.
Endorsement agreement contracts majorly are of two types, Sports Endorsement Agreement or Celebrity Endorsement Agreement. When the company manufactures sports products or facilitates sports activities or services, the agreement made is Sports Endorsement Agreement. The company associates with one of the celebrated sportspersons to endorse their product or service. Every now and then, the company may also select a particular sports team, who has a higher probability of success in the tournament they are associated with and provide them with sponsorships, for which the company signs the sports sponsorship agreement. For example, the MPL advertisement on the Indian Cricket Team jersey reflects that MPL holds one of the main sponsorships for the Indian Cricket Team and has signed the sports sponsorship agreement with BCCI. Since MPL is an e-sports platform, getting the services endorsed by a sports team will help the company target the right set of audience.
When the company manufactures a product or provides a service that is not related to sports, the agreement made is Celebrity Endorsement Agreement. One of the efficacious ways to endorse a good or service is getting a celebrity or an influencer to endorse their product or service. This method is highly effective as these celebrities and influencers are highly decorated and thus have a massive fan base to back their promotion. For example, supermodel Gigi Hadid is the brand ambassador of Maybelline. Since Maybelline is a cosmetics and makeup brand, getting the products endorsed by a supermodel will provide the right market segmentation.
Since these endorsement agreements are a form of contracts, there can be a breach in them. In a contract breach situation, both the parties involved have the right to terminate the contract, making it null and void. When a company forfeits the guidelines given in the agreement, the endorser can terminate the contract or file a suit against the company. Likewise, if the endorser forfeits the guidelines crafted by the company under the agreement, then the company can terminate the contract. The endorser should comprehend the guidelines stated by the company beforehand and then sign the agreement. Similarly, a company should analyse all the requirements crafted by the endorser beforehand and then sign the contract. Thus, both parties must make sure that they get assisted by an attorney to determine whether to sign the contract or not.
We could see many a time in the past where endorsers failed to do their homework on the brands they are endorsing, resulting in legal action, such as the widely publicised Pierce Brosnan-Pan Parag controversy, in which Brosnan denied ever agreeing to endorse a pan masala product with cancerous side effects, and Pan Bahar was held responsible for abusing Brosnan’s celebrity for personal gain. In situations like this, the endorser must perform Due Diligence on their own or with the assistance of a legal advisor to ensure they are not putting themselves in jeopardy by endorsing the statements made by the brands.
In the case of “Bearded Chokra”, a YouTuber made a video reviewing Marico’s famous ‘Parachute Coconut Oil,’ which is easily the company’s most well-known brand. He compares ‘Parachute Coconut Oil’ to organic coconut oil and concludes that the latter is superior to the former (Corrected after publication) and suggests cold-pressed coconut oil. He does so based on empirical evidence. He basically claims that unlike cold-pressed coconut oil, which is never seen to be heated above 50 to 60 degrees Celsius, the coconut oil that is expeller pressed is heated to about 100 degrees Celsius, resulting in nutrient loss. That appears to be the case. He claims that due to the loss of nutrients, such oil should not be used on the hair or skin and that it should only be used for cooking if it is the edible version. He selected some very random parameters in addition to the scientific criteria. For example, he compares the frozen form of organic coconut oil to ‘Parachute Coconut Oil,’ claiming that only the latter contains impurities. In his defence, he fails to discuss the impurities’ implications or how they relate to his broader claim on how cold-pressed oil is superior to expeller-pressed coconut oil. After the video surfaced, Marico hired a very experienced lawyer to file a suit against Abhijeet Bhansali, who goes with the name of Bearded Chokra.
A comment made by a Social Media Influencer regarding a specific product may be interpreted by the brand as defamatory or disparaging. When it comes to acts of slander or disparagement, the first step is to distinguish between claims of fact and opinions. Opinions cannot serve as the legal foundation for a defamation or disparagement case. Any individual may have an opinion on a product or service. However, if you say that a product will cause harm to the consumer, the fact is being stated. In such situations, the burden of proof will fall on the brand to show that the Social Media Influencer they were suing behaved with “true malice,” which means the individual acted recklessly, with full knowledge that their argument was false and with complete disregard for the facts.
Whether employed on paid or unpaid partnerships, social media influencers have some rights and responsibilities. In the case of compensated partnerships, they must make sure that any supported post is clearly labelled so that the customer is not confused. It is also their duty to only recommend items that they can help with, which is also where problems arise. In reality, even the most powerful Social Media Influencers, such as celebrities with decades of experience, would blindly obey the instructions of existing brands without question. A Social Media Influencer should never promote something they don’t believe in or lie about a product to boost sales.
There’s no denying that celebrities or influencers, for that matter, have an influence on our lives in an era where everybody spends the majority of their day on social media. Some people need more, and others need less.
Similarly, marketing values have evolved over time. From using a product’s qualities as a selling point to including celebrities, today it’s all about how well a business can inform customers about their personal beliefs, benefits, and product quality. It’s more about being more intimate and less transactional. Brands must have resources to assist customers in determining if a product or service is a good match for them. What works and looks amazing on the celebrity we follow cannot fit or look great on us. The majority of customers are aware of this.
At the end of the day, it is the company, not the celebrity, that must convince customers to purchase their items. They, not the celebrity, are the ones who must advise, persuade, and assist shoppers in making decisions.
Author: Riya Raman
LLB(H) student at Bennett University and has done her bachelors in English Honours. Her area of interests in law are towards Intellectual Property law, Criminal law and Media law and also in writing and research, literature, novels.
