With IPL in sight, govt to crack down on online betting ads disguised as content, says consumer affairs secretary Rohit Kumar Singh

The Consumer Affairs Ministry is collaborating with influencers to ensure compliance with guidelines and protect consumers' interests, without impeding the growth of the influencer ecosystem.

In an interview with Storyboard18 at the Network18 Green Ribbon Champions event, Rohit Kumar Singh, Secretary, Ministry for Consumer Affairs, Food & Public Distribution, talked about how the Indian government is approaching the issue of enforcing influencer guidelines without hindering the growth of the industry.

Singh emphasized that the government's primary focus is on ensuring compliance with the guidelines and safeguarding consumer interests, rather than obstructing the influencer ecosystem's development. He also shared insights into the challenges facing the influencer space and the government's efforts to address them.

Excerpts.

How does the government ensure compliance with the influencer guidelines in India? Is there a dedicated team responsible for monitoring and enforcing these guidelines?

The consumer protection paradigm is primarily based on unfair trading practices, including the use of misleading advertisements, which falls under the same umbrella. With the rise of social media influencers, some have been promoting products without disclosing payment received for endorsements. The influencer guidelines aim to address this issue by prioritizing disclosure. If an influencer has received payment or material benefits from a company to promote a product, consumers have the right to know that it was a paid promotion. The guidelines require influencers to disclose this information clearly and visibly, whether it's through infographics, videos, or pictures.

Increase in betting ads disguised as news content & e-commerce promotions. With IPL approaching, the Government will ensure that such promotions are not carried out.

To enforce these guidelines, we don't rely solely on the government network; consumers can also file complaints. Additionally, we work closely with the Advertising Standards Council of India (ASCI) to receive feedback. The Central Consumer Protection Authority (CCPA), authorized under the Consumer Protection Act, is responsible for taking penal action against misleading advertisements, and now we will begin taking action against social media influencers as well. Although the social media influencer industry is vast, we do not want to impede its growth because there are a lot of young people and their livelihoods that are involved. In fact, I recently addressed about 250 of them via video conference in Mumbai to communicate that they can continue with their business as long as they disclose any payments received.

So, is the Indian government collaborating with influencers to create a safer and more trustworthy social media ecosystem?

Yes. On the day we launched the influencer guidelines, we invited 10 influencers to join us over video and address the media and press. They expressed their support for the guidelines, and we appreciated their cooperation. The influencer industry had previously been divided into two groups, but with the implementation of these guidelines, all influencers will be on the same page and have a level playing field when it comes to disclosures.

Which brand categories have the highest number of violations under the influencer guidelines?

Based on the available data, it appears that the personal care and textiles/clothing sectors have the highest number of violations under the influencer guidelines. Particularly, the personal care sector has shown a significant number of violations.

Ads disguised as content or promotion under government scanner.

What are the current biggest challenges facing the endorsement space, including celebrity and influencer endorsements, and how is the government addressing them?

One of the biggest challenges facing the space is the issue of surrogate advertisements. For instance, advertisements disguised as content or promotions. The government is working to address this issue. Another challenge is related to online gaming and betting. While online gaming is legal in some areas, betting is not legal in India. There has been an increase in betting advertisements disguised as news content or ecommerce promotions. With the IPL approaching, the government is engaging with stakeholders to ensure that such promotions are not carried out.

SEBI recently introduced rules regarding endorsements in the crypto space, but it remains a gray area. Could you share your thoughts on this matter?

Our position on crypto endorsements is in alignment with the Ministry of Finance and the Reserve Bank of India, as the legal status of cryptocurrencies is yet to be established. The honorable Finance Minister has also called on G20 nations to work collaboratively to address this issue, as it is not just India facing this problem. Once the legality is established, it will be clearer what is permissible and what is not. Currently, advertising for crypto is not allowed, as some advertisements make misleading claims about returns on investment. Such misleading advertisements are not acceptable.

Social media influencer industry is vast, we do not want to impede its growth because there are livelihoods involved.

Lastly, what is your outlook for 2023? Apart from the guidelines for influencer marketing, are there any other initiatives in the works to safeguard the interests of consumers?

We are fully committed to the right to repair movement and are actively working on ways to reduce e-waste. This is in line with the prime minister's mission for a sustainable lifestyle for the environment. We support the European Union's decision to mandate USB C chargers, which will reduce the amount of e-waste generated. We also encourage companies to avoid planned obsolescence and provide information about their service centers and parts through our right to repair portal.

Advertising for crypto is not allowed, as some ads make misleading claims about returns on investment. Such misleading ads are not acceptable.

Apart from electronics, we have identified water filters as a major challenge. Customers often face unnecessary expenses when they are asked to replace parts without proper disclosure. We have called upon water filter companies to be transparent about the technology being used, the life of their parts, and the cost involved. We are hopeful that by streamlining this process, we can create a better system for RO filters and other water filtration systems.