Authored By: Sanjana Rakhi Kujur
Amity University Kolkata
- Abstract
India’s influencer marketing sector, valued at INR 2,344 crore in 2024 and projected to reach INR 3,375 crore (USD 404 million) by 2026 at an 18 per cent CAGR (EY & Big Bang Social, 2024), is driven primarily by fashion and beauty. Yet this rapid growth has outpaced regulatory frameworks designed for an earlier advertising era, creating persistent gaps in transparency, consumer protection and brand accountability. This article examines India’s Consumer Protection Act, 2019 and the ASCI Influencer Advertising Guidelines, 2021, drawing comparative insights from the United States and United Kingdom. Through doctrinal and analytical research grounded in landmark case law analysed via the IRAC method. It argues that stronger disclosure obligations, clearer influencer liability standards and greater platform accountability are essential to ensuring a fair and transparent digital fashion marketplace.
- Introduction
Consider a scenario familiar to most university students today: scrolling through Instagram Reels between lectures, a student encounters a peer-aged creator recommending a fashion label with the casual intimacy of a friend rather than the pitch of a salesperson. Algorithmically nudged and time-pressed, the student clicks and purchases entirely unaware that the creator received payment for that 30 second endorsement. This is not exceptional; it is the defining commercial dynamic of the digital age. Fashion brands, from fast fashion retailers to Parisian luxury maisons have accordingly channelled substantial marketing budgets towards influencer collaborations.
Yet the very qualities that make influencer marketing effective its apparent authenticity, its intimate register and its seamless integration into personal content render it legally and ethically contentious. When a fashion creator shares what appears to be a candid styling post but is, in fact, a paid promotion, the line between personal recommendation and commercial advertisement becomes dangerously blurred. Consumers who rely on these endorsements as independent opinions are, in effect, being deceived. Such practices undermine consumer autonomy, distort fair competition and erode the trust that sustains the digital marketplace.
This article examines the legal architecture governing influencer marketing in the fashion and luxury sectors, with primary focus on the Indian regulatory framework. It engages with landmark case law through the IRAC framework Issue, Rule, Application, Conclusion as recommended for legal research in this domain, and conducts a comparative analysis of regulatory approaches in the United States and United Kingdom. The central research question is: are existing legal frameworks in India adequate to protect consumers and ensure transparency in the digital fashion economy?
- Background and Conceptual Framework
The digital fashion economy refers to the ecosystem in which brands, platforms, influencers and consumers interact within online environments. Influencers individuals who possess significant online followings and shape consumer purchasing behaviour through curated content function as commercial intermediaries between brands and consumers. Collaborations may involve paid posts, affiliate commissions, gifted products or long-term brand partnerships ranging from discrete single post arrangements to comprehensive ambassador agreements.
Central to the regulatory challenge is the concept of parasocial relationships. Followers develop a sense of intimacy and trust with creators they have never personally met. Research in consumer psychology has consistently demonstrated that recommendations from perceived friends are far more persuasive than formal advertising.[1] Influencers capitalise on this dynamic: promotional content arrives embedded within personal narratives and lifestyle content that followers actively choose to consume. When exploited without adequate disclosure, these dynamic harms consumer and undermines fair competition.
Traditional advertising regulations were designed for television and print, where commercial intent is clearly identifiable. Influencer content, by contrast, blends advertising with personal expression, making it difficult for consumers to distinguish genuine opinion from paid promotion. This ambiguity is especially acute in luxury fashion, where the distinction between editorial curation and commercial promotion has always been philosophically contested. When a luxury house gifts couture to a celebrity for a public appearance, is that a commercial endorsement requiring disclosure? The answer varies by jurisdiction and circumstance, creating genuine compliance complexity for global luxury groups operating across multiple regulatory environments.
In India, the Consumer Protection Act, 2019 (CPA 2019) and the ASCI Influencer Advertising Guidelines, 2021 attempt to address these concerns.[2] Internationally, the United States Federal Trade Commission (FTC) and the United Kingdom Advertising Standards Authority (ASA) provide comparative regulatory benchmarks. Scholarly commentary has increasingly recognised that the hybrid nature of influencer content simultaneously personal expression and commercial speech necessitates purpose-built regulatory frameworks distinct from both traditional advertising law and general consumer protection legislation.
- Legal Analysis
4.1 Consumer Protection Act, 2019
India’s primary instrument for addressing misleading advertising in the digital space is the CPA 2019.[3] Under Section 2(28), a ‘misleading advertisement’ is defined to include any representation that falsely describes a product, makes exaggerated claims or withholds material information likely to influence a consumer’s purchasing decision. Significantly, the Act extends liability to endorsers: influencers who promote fashion products may be held personally liable if they fail to exercise due diligence regarding the truthfulness of promotional claims. The Central Consumer Protection Authority (CCPA), established under Section 10, is empowered to investigate misleading advertisements, issue corrective directions and impose financial penalties on both advertisers and endorsers.
This represents a meaningful departure from the predigital advertising paradigm in which liability flowed primarily to brand advertisers rather than individual promoters. Its application to fashion influencers who may make specific claims about product quality, material sourcing or sustainability credentials carries significant implications for the luxury sector, where unverified promotional claims can directly damage brand equity and mislead consumers on matters of material importance.
4.2 ASCI Influencer Advertising Guidelines, 2021
Complementing the statutory framework, the ASCI introduced the Guidelines for Influencer Advertising in Digital Media in 2021.[4] These require influencers to label promotional content using standardised disclosures ‘#Ad’, ‘#Sponsored’, ‘#Paid Partnership’ placed prominently at the commencement of post captions or visibly overlaid on video content. Critically, the guidelines extend beyond monetary transactions, applying to any material connection including gifted products, complimentary experiences, hospitality, affiliate commissions and personal or professional relationships that might bias an influencer’s presentation. The guidelines also address virtual influencers CGI brand ambassadors requiring disclosure of their artificial nature, a provision of growing significance as luxury brands deploy digital personas.
The principal limitation of the ASCI framework is its self-regulatory character. Without statutory enforcement power, compliance depends on the voluntary engagement of brands and influencers which is inconsistent across the fashion industry. The complaint driven model cannot keep pace with the volume of promotional content generated daily. This enforcement deficit is the most significant structural weakness of the current Indian regime and requires urgent legislative attention.
4.3 Comparative Framework: United States and United Kingdom
In the United States, the FTC Endorsement Guides require disclosure of any material connection between influencers and brands financial, employment related or personal.[5] As established in FTC v. Lord & Taylor, brands must actively supervise influencer compliance and cannot insulate themselves from liability by delegating promotional decisions to influencers without oversight. In the United Kingdom, the ASA and Competition and Markets Authority (CMA) require that labels such as ‘AD’ precede substantive content,[6] with the CMA obtaining formal undertakings from noncompliant fashion influencers. Across both jurisdictions, regulatory authorities are moving from voluntary frameworks towards enforceable obligations with meaningful penalties. India’s CPA 2019 is legislatively sound, but bridging the enforcement gap between statutory text and actual practice remains the most urgent challenge.
- Case Law Discussion
5.1 Marico Ltd. v. Abhijeet Bhansali, Suit (L) No. 197 of 2019 (Bombay H.C.)
In this case, a YouTube influencer published a video claiming that Parachute coconut oil was not pure coconut oil. Marico Limited filed suit alleging that the statements were misleading and damaging to its commercial reputation. The Bombay High Court observed that while individuals have the right to express opinions, influencers must exercise caution when making specific factual claims about products. The Court distinguished between protected opinion and actionable misrepresentation of fact, finding that the video’s claims had the capacity to mislead consumers and damage Marico’s brand. The legal principle established is that digital content creators who make verifiable factual claims about consumer products are subject to the same standards of accuracy as formal advertisers. This judgment is directly relevant to fashion and luxury marketing: influencers who make claims about product authenticity, craftsmanship or material sourcing without adequate verification risk legal liability.[7]
5.2 FTC v. Lord & Taylor LLC, FTC File No. 1523181 (2016)
Lord & Taylor, a US fashion retailer, paid approximately fifty influencers to post Instagram photographs featuring its Paisley Asymmetrical Dress without disclosing the commercial arrangement. The FTC found the campaign deceptive because consumers encountered the posts as organic fashion content rather than paid promotions. The FTC held that brands bear direct legal liability for influencer campaigns that fail to meet disclosure requirements a fashion house cannot delegate promotional responsibility to influencers without supervising their compliance. This case established the foundational principle of brand accountability in influencer marketing and remains the most significant precedent for fashion brand legal strategy in this space.[8]
5.3 Hermès International v. Mason Rothschild, No. 22cv384 (S.D.N.Y. 2023)
Hermès sued digital artist Mason Rothschild for creating and selling NFTs labelled ‘MetaBirkins’ that visually evoked the iconic Birkin handbag. The jury ruled in favour of Hermès, finding that the NFTs were likely to cause consumer confusion and that Rothschild’s use of the Hermès mark was predominantly commercial rather than purely artistic. The First Amendment defence was rejected. The legal principle established is that luxury brand trademark rights extend into digital and virtual environments influencers and digital creators operating in the metaverse fashion space cannot circumvent trademark obligations through claims of artistic expression. This verdict has profound implications for fashion influencers who create, promote or monetise NFT based fashion content.[9]
- Critical Analysis and Findings
The foregoing legal analysis reveals three structural gaps in the regulation of influencer marketing within the fashion economy. First, the enforcement deficit in India is acute. The ASCI’s complaint driven, self- regulatory model is structurally inadequate for the volume and velocity of digital fashion content. Statutory reform empowering the CCPA to conduct proactive monitoring analogous to the FTC’s mandate is a necessary development. Without this, the CPA 2019’s endorser liability provisions will remain largely theoretical.
Second, liability allocation remains unresolved. Fashion influencers occupy a hybrid legal position simultaneously independent content creators, commercial endorsers and, in some cases, brand collaborators. The Marico and Teami decisions suggest increasing judicial willingness to hold individual influencers directly accountable, yet the legal standards governing when such liability attaches remain insufficiently defined in India. Clear legislative guidance on the scope of influencer liability distinguishing between paid endorsement, gifted product promotion and voluntary organic content would significantly improve regulatory certainty for the fashion industry.
Third, platform accountability remains a critical blind spot. Instagram, YouTube and TikTok actively amplify promotional content through algorithmic systems yet bear minimal liability for misleading content they distribute. The EU’s Digital Services Act represents an emerging international model in which platforms bear active monitoring obligations. India has yet to incorporate comparable mechanisms. Extending accountability to platforms rather than relying exclusively on influencer and brand compliance would represent the most significant improvement to the current regulatory regime.
Comparatively, the convergence of US, UK and emerging EU regulatory approaches suggests that the trajectory of global fashion law is towards enforceable disclosure obligations, proactive regulatory monitoring and shared brand-platform influencer accountability. India’s framework, while directionally sound, lags behind this trajectory. Bridging this gap should be a legislative priority.
- Conclusion
This article set out to examine whether existing legal frameworks in India are adequate to protect consumers and ensure transparency in the digital fashion economy. The analysis demonstrates that the answer is, presently, no. The Consumer Protection Act, 2019 provides a sound statutory foundation, but its effectiveness is severely constrained by the self- regulatory character of the ASCI Guidelines, the limited proactive enforcement capacity of the CCPA and the absence of meaningful platform accountability provisions.
The case law examined from Marico v. Bhansali to FTC v. Lord & Taylor and Hermès v. Rothschild collectively demonstrates that courts and regulators across jurisdictions are increasingly prepared to hold influencers, brands and digital creators accountable for misleading promotional practices. India must align its enforcement posture with this global direction. The three reforms most urgently required are: statutory empowerment of the CCPA for proactive digital advertising monitoring; clearer legislative standards governing influencer liability in commercial fashion promotion; and the introduction of platform accountability mechanisms for undisclosed promotional content. In fashion, trust is the ultimate luxury and effective regulation is the instrument through which it must be protected.
- Reference(S) and Bibliography
Legislation
Consumer Protection Act, No. 35 of 2019 (India).
Trade Marks Act, No. 47 of 1999 (India).
Federal Trade Commission Act, 15 U.S.C. § 45 (2018).
Regulation (EU) 2022/2065 on a Single Market for Digital Services (Digital Services Act), 2022 O.J. (L 277) 1.
Cases
Christian Louboutin SAS v. Abubaker & Ors., CS(COMM) 714/2018 (Delhi H.C. 2018).
FTC v. Teami LLC, No. 8:20cv518T33TGW (M.D. Fla. 2020).
Hermès International v. Mason Rothschild, No. 22cv384 (S.D.N.Y. Feb. 8, 2023).
In re Lord & Taylor LLC, FTC File No. 1523181 (F.T.C. Mar. 15, 2016).
Louboutin v. Van Haren Schoenen, Case C163/16, EU:C:2018:423 (C.J.E.U. June 12, 2018).
Marico Ltd. v. Abhijeet Bhansali, Suit (L) No. 197 of 2019 (Bombay H.C. 2019).
Secondary Sources
Advertising Standards Authority (UK), CAP Code: Section 2 Recognition of Marketing Communications (2022).
Advertising Standards Council of India, Guidelines for Influencer Advertising in Digital Media (2021).
Competition and Markets Authority (UK), Social Media Endorsements: Making Sure Influencers and Businesses Comply with the Law (2020).
Federal Trade Commission, Guides Concerning the Use of Endorsements and Testimonials in Advertising, 16 C.F.R. § 255 (2023).
Donald Horton & Richard Wohl, Mass Communication and ParaSocial Interaction, 19 Psychiatry 215 (1956).
Susan Scafidi, Intellectual Property and Fashion Design, 1 Intell. Prop. & Info. Wealth 115 (2007).
[1] Donald Horton & Richard Wohl, Mass Communication and ParaSocial Interaction, 19 Psychiatry 215 (1956).
[2] Consumer Protection Act, No. 35 of 2019 (India); Advertising Standards Council of India, Guidelines for Influencer Advertising in Digital Media (2021).
[3] Consumer Protection Act, No. 35 of 2019, § 2(28) (India).
[4] Advertising Standards Council of India, Guidelines for Influencer Advertising in Digital Media (2021).
[5] Federal Trade Commission, Guides Concerning the Use of Endorsements and Testimonials in Advertising, 16 C.F.R. § 255 (2023).
[6] Advertising Standards Authority (UK), CAP Code: Section 2 — Recognition of Marketing Communications (2022).
[7] Marico Ltd. v. Abhijeet Bhansali, Suit (L) No. 197 of 2019 (Bombay H.C. 2019).
[8] In re Lord & Taylor LLC, FTC File No. 1523181 (F.T.C. Mar. 15, 2016).
[9] Hermès International v. Mason Rothschild, No. 22cv384 (S.D.N.Y. Feb. 8, 2023).
