Social Media Influencers and the Law: Observations after Marico Limited v. Abhijeet Bhansali

By: Karan Kamath 


INTRODUCTION

The Bombay High Court was recently called upon to adjudicate a matter involving a social media influencer. The nature of the social media influencers’ relationship with marketers and followers/subscribers had an impact on the Court’s judgment. This blog post takes the opportunity to consider some aspects of influencer marketing and the relevant provisions in Indian law.

MARICO LIMITED v. ABHIJEET BHANSALI

This month, the Bombay High Court noted some interesting observations about social media influencers. While deciding interim reliefs in Marico Limited v Abhijeet Bhansali, learned Justice S. J. Kathawalla thought that a word of caution was necessary in the context of the present case. As social media influencing has become an effective tool for advertising and marketing, influencers have amassed considerable power to change the attitude and mindset of their followers. As with all influential tools, this too can be used for the better, and scarily, even for the worse. Justice Kathawalla noted that this meant that influencers had to carefully and responsibly use their influence. Whether their audience was significant or not, the influencers impacted their lives, and thus, they do have a responsibility to ensure that what they are publishing is not harmful or offensive.

These observations stemmed out of a case where an influencer’s YouTube video was taken down for, inter alia, being disparaging towards Marico’s Parachute Coconut Oil (hereinafter ‘Parachute’) and causing irreparable harm and injury to the company. The influencer had claimed and demonstrated, using questionable techniques, that Parachute was not 100% pure. The techniques used in the video, as the Court found out, were based on dubious material. The Court also noted that the influencer in question was promoting products competing with Parachute, which made the content in the video part of commercial speech.

Law on Disparagement

It is settled law that the law of personal defamation is distinct from the law of malicious falsehood and slander of goods. In Reckit Benckiser (India) Limited v Naga Limited, the Delhi High Court explained that, in the latter, the plaintiff suffers special damages, as the damage is not restricted to his reputation but is also to his property and trade. There are three essentials for proving disparagement as provided in Halsbury’s Laws of England (quoted in Hindustan Unilever Limited v Gujarat Cooperative Milk Marketing Federation Ltd.): (i) that the defendant’s statements are false; (ii) that the statements were made maliciously or recklessly; (iii) that the said statements caused special damages to the plaintiff.

In Marico Limited, the first essential was satisfied prima facie as the influencer had cited dubious internet material to justify his claims. He also muddled the distinction between virgin organic coconut oil (oil as removed from wet coconut kernel) and organic coconut oil (oil derived from copra or dried coconut kernel), which are treated differently under the Food Safety and Standards Regulations, 2011. Thus, the claims made therein were patently false. As far as the maliciousness and recklessness of the statements is concerned, the same were exemplified by the manner in which the influencer presented the claims: he insisted that the same were ‘scientific’ and ‘empirical’ despite a lack of expertise in the matter, the purposeful erasing of the distinction between the two aforesaid kinds of coconut oil, and the overall vindictive tone of the video and related text. Lastly, any special damage to Marico was evinced by the comments below the influencer’s video, which showcased that several viewers had taken the decision to not use Parachute after having watched the video.

Defences

The influencer took several defences for his conduct, including that he was not a competitor, that the statements were exaggerated, that his conduct was bona fide, that his viewers possessed a special ability to discern, and that he had the right to freedom of speech. Apart from the last one, the rest were null in the light of the influencer linking e-commerce websites for the alternatives to Parachute in the description of his video, and his reckless and malicious conduct. With regards to the plea of free speech, the Court held that the video was an exercise in commercial speech, and even by the standards of assessing such speech, it had entered the realm where it cannot be protected. The Supreme Court in Tata Press Limited v Mahanagar Telephone Nigam Limited held that commercial speech that is misleading or untruthful is hit by the restrictions under Article 19(2) of the Constitution.

Order

Thus, the Court injuncted the video from being displayed on YouTube, as it would have caused irreparable harm and injury to the plaintiff-company. While ordering so, it noted the aforementioned observations about social media influencers.

INFLUENCERS AND THE PROBLEM WITH ADVERTISING

Some social media influencers, under the garb of ‘experts’, utilise their influence to sell products. There is nothing prima facie wrong in being paid to promote a product. However, with social media influencers, some obvious problems arise. Influencers take part in ‘native advertising’, i.e., advertising that is presented in the form of news, product reviews, entertainment etc. Native advertising is misrepresenting and misleading for any reasonable observer because he or she is under a genuine belief that the content presented to them is part of news or product review, something that they believe to be true. For example, if in an advertisement that precedes an online video or a television show, Mr. A reviews Product B to be harmful as compared to his choice, Product C, then, viewers are reasonably expected to deduct that Mr. A’s comments clearly stem out of his funding by the manufacturers of Product C. Instead, when Mr. A, now a social media influencer, reviews Product B as harmful, his dedicated set of followers/subscribers are more likely to take his word for it. And subsequently, when he posts another video positively reviewing Product C, the circle is complete. The U.S. Federal Trade Commission’s guidance for influencers, thus, speaks clearly: “From the FTC’s perspective, the watchword is transparency. An advertisement or promotional message shouldn’t suggest or imply to consumers that it’s anything other than an ad.”

Advertisers, exercising commercial speech, are protected under Article 19(1)(a), but are also subject to a standard other than that of ordinary speech as held in Hindustan Unilever Limited v Cavincare Private Limited. The Delhi High Court in Reckitt & Colman v Kiwi T.T.K. Ltd. categorically pronounced that:

A manufacturer is not entitled to say that his competitor’s goods are bad so as to puff and promote his goods. It, therefore, appears that if an action lies for defamation, an injunction may be granted.”

Additionally, advertisers also have to suffer obligations under the Consumer Protection Act, 1986; Cable Television Networks (Regulations) Act, 1995; Drug and Magic Remedies (Objectionable Advertisement) Act, 1954; Drugs and Cosmetics Act, 1940; and Food Safety and Standards Act, 2006. Influencers, devoid of the traditional nature of an advertiser, deem themselves prima facie free from such obligations.

THE FUTURE OF INFLUENCING AND LAW

Influencers surely travail tremendously to gain a significant number of followers. Columbia Law School Professor, Tim Wu, in his seminal work on advertising, calls a good Instagram feed a labour-intensive industry. But once such a number is attained, then marketing professionals are readily available to pounce on the opportunity. At lesser costs, they can reach a greater audience. But once a marketer is funding an influencer, she is no longer the innocuous friend/expert that her followers deem her to be. In a traditional advertisement, you would see an actor or a sportsperson acting as an expert, let us say, on shaving creams. But an Instagram influencer, with all the careful amateurish pretences, will be taken to be an expert reviewer telling you about shaving creams.

The Bombay High Court was justified in treating an influencer’s video as commercial speech. Influencers hold considerable power over their followers, and a well-paying corporation, in turn, holds considerable power over the influencer. Law cannot be blind to that relationship and take an influencer to be your friendly next-door expert like they want their followers to take them. But as influencer marketing grows day-by-day, how the law deals with it needs to be seen. Currently, the law sees it as an attempt to masquerade advertising in an honest review. But to quote Tim Wu once again:

Adaptation is a remarkable thing, and if our history has shown anything, it is that what seems shocking to one generation is soon taken for granted by the next.


(Karan is currently a law undergraduate at Symbiosis Law School, Pune. He may be contacted at karankamath15@gmail.com.)

Cite as: Karan Kamath,‘ Social Media Influencers and the Law: Observations after Marico Limited v. Abhijeet Bhansali’ (The RMLNLU Law Review Blog, 11 February 2020) <https://rmlnlulawreview.com/2020/02/11/social-media-influencers-and-the-law-observations-after-marico-limited-v-abhijeet-bhansali&gt; date of access.

 

 

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