Advertising Law for Artificial Intelligence Influencers in India

Abstract

Artificial Intelligence influencers, also known as virtual or computer-generated influencers, have become a major trend in the Indian digital marketing ecosystem. These artificial personalities are designed to create content, interact with audiences, and endorse products, just like human influencers. As brands increasingly collaborate with virtual creators, new legal questions arise regarding their accountability and compliance duties. This article examines the legal framework governing AI-based endorsements in India, including the Consumer Protection Act, 2019, Advertising Standards Council of India Guidelines, Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, and other regulatory mechanisms. The article concludes that while there is no specific prohibition on artificial intelligence influencers in India, all the legal obligations of truthful advertising, transparency, and due diligence apply equally to them and to the human entities that manage them.

 Introduction

AI-generated influencers have rapidly become a part of India’s evolving digital economy. These digital avatars are not real human beings but computer-generated characters that look, speak, and behave like real people. Brands are increasingly using artificial intelligence influencers to promote fashion, cosmetics, food products, electronics, financial products, and lifestyle services.

A common question arises: Are artificial intelligence influencers legally allowed to endorse products in India?
The answer is yes; Indian law does not prohibit the use of artificial intelligence or virtual personalities for endorsements. However, the legal responsibility for creating truthful, transparent, and non-misleading advertisements applies equally whether the endorsement is made by a real person or an AI-generated figure.

Importantly, the law places responsibility on:

• the advertiser,
• the brand owner, and
• The person or organization controlling the artificial intelligence influencer.

This article explains the laws applicable to artificial intelligence influencer advertising in India, analyzes the gaps in the existing framework, and suggests reforms needed to address the challenges posed by synthetic media.

Research Methodology

This study is based on the doctrinal method of legal research. This study relies on statutory provisions, official guidelines, government notifications, scholarly articles, and publicly available material related to digital marketing and artificial intelligence. It follows an analytical approach to examine how existing laws apply to AI-driven endorsements.

Understanding Artificial Intelligence Influencers

 What Are Artificial Intelligence Influencers?

Artificial Intelligence influencers are computer-generated digital characters designed to behave like real human influencers. They may post content, collaborate with brands, respond to comments, and appear in virtual ads.

Types of Artificial Intelligence Influencers

1. Fully Virtual Influencers: Entirely digital characters (e.g., computer-generated models).

2. Artificial Intelligence-generated human replicas – Influencers modeled after real humans.

3. Voice-based Artificial Intelligence Influencers – Only use artificial intelligence-generated voiceovers.

4. Deepfake Influencers – Use real human likenesses to generate synthetic videos.

These categories help identify how different technologies create distinct legal challenges.

Why Brands Prefer Artificial Intelligence Influencers

Brands increasingly choose artificial intelligence influencers because of the following reasons:

1. ·They are available 24/7.

2. They are fully controlled by the brand; there is no risk of scandals.

3. They are cost-effective in the long term.

4. They can create visually perfect content using software tools.

5. They can be styled or modified immediately.

6. They appeal to younger, tech-savvy audiences.

7. This commercial expansion increases the need for clear and legal regulations.

Legal Framework Governing Artificial Intelligence Influencer Advertising

1. Consumer Protection Act, 2019

The Consumer Protection Act, 2019, governs misleading advertisements in India. It clearly states that false claims, exaggerated statements, and endorsements made without proper verification constitutes misleading advertisements. Although artificial intelligence influencers are not human endorser personalities, the responsibility falls on the entity or individual controlling or creating the artificial intelligence influencer.

The important provisions include the following:

• Section 2(28) – Definition of misleading advertisements.

• Section 21 – Power to impose penalties for false or deceptive endorsements.

Penalties include:

• up to ten lakh Indian Rupees for the first offence,

• higher penalties for repeated violations, and

• possible prohibition from making additional endorsements.

Thus, advertisers, brand owners, and operators of artificial intelligence influencers must exercise due diligence before making any promotional claims.

2. Advertising Standards Council of India Guidelines for Influencer Advertising

The Advertising Standards Council of India, a voluntary self-regulatory advertising body, released Guidelines for Influencer Advertising in Digital Media (2021). These guidelines apply to all types of influencers, including virtual and artificial intelligence-generated influencers.

The guidelines mandate:

• clear disclosure such as “advertisement,” “sponsored,” or “collaboration,”

• transparency for paid partnerships, and

• Honest representation of facts.

The Advertising Standards Council of India has clarified that virtual influencers must follow the same rules as human influencers.

3. Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021

The Information Technology Rules, 2021, places obligations on social media intermediaries, digital publishers and online platforms to ensure that unlawful or misleading content is not promoted on these platforms. This includes misleading promotional content generated using artificial intelligence. Although the rules do not directly regulate artificial intelligence influencers, they require platforms to remove harmful content and uphold transparency.

 Judicial Interpretation

Although India does not yet have court decisions specifically addressing artificial intelligence endorsements, Indian courts have consistently emphasized consumer protection and truthful advertising.

Some important judgments that shape advertising law include the following:

1. Horlicks Limited v. Zydus Wellness Products Limited AIR 2020

This case was about a comparative advertisement where Complin (Zydus Wellness) claimed that it had 51% more protein than Horlicks.
The problem was:

1. The comparison was not clearly explained,

2. It was based only on selected product variants,

3. ·This made people think that Complin was always better.

The Delhi High Court said this was misleading, especially because the advertisement was aimed at children’s health and nutrition. The Court stopped the advertisement and said that health claims must be honest and accurate because parents rely on them to choose safe products for children.

Simple takeaway:
Brands cannot make half-true or confusing claims, especially regarding children’s health.

         2. Common Cause v. Union of India AIR 2018 SC 1665

A public group called Common Cause told the Supreme Court that there were too many false and exaggerated advertisements in India, especially for health products, miracle cures, and medicines.

The Supreme Court agreed and stated:

1. Misleading advertisements are a serious harm to consumers,

2. Endorsers and manufacturers must be truthful,

3. The government must take strong action to prevent false claims.

The Court also stated that advertisers must be responsible because people trust what they see in commercials, especially when children, old people, or sick people are involved.

Simple takeaway:
Advertisements must be honest, responsible, and not misleading.

 These principles apply equally to artificial intelligence influencers because the effect of the advertisement on consumers remains the same, regardless of whether the endorser is human or artificial intelligence.

Challenges Posed by Artificial Intelligence Influencers

1. Deepfake Risks

Artificial intelligence tools can create videos of influencers promoting products that they have never used. This can easily mislead consumers.

2. No Emotional or Moral Accountability

Unlike humans, artificial intelligence influencers cannot feel guilt or moral responsibility.

3. Identity and Ownership Issues

Who owns the artificial intelligence influencer?
Who signs the contracts?
Who earns income on their behalf?

The law has no answers.

4. Manipulative Personalization

Artificial intelligence influencers can target consumers using advanced algorithms that predict emotional behavior, raising ethical and legal concerns.

5. Data Protection Concerns

Training artificial intelligence models on real human images may violate the Digital Personal Data Protection Act of 2023.

Intellectual Property Rights Issues

Artificial intelligence influencers raise several intellectual property concerns.

a. Copyright

1. Who owns the copyright of an AI-generated influencer?

2. ·Can an artificial intelligence avatar have intellectual property rights?

b. Personality Rights

Artificial intelligence influencers resembling real humans may violate:

1. Right to publicity

2.  Right to privacy

3. Image rights

c. Trademark Misuse

1. Artificial intelligence-generated product placement without approval

2. Misleading visual similarity to trademarked characters or celebrities

Digital Personal Data Protection Act, 2023 and Artificial Intelligence Influencers

Artificial Intelligence influencers often rely on large datasets that may include personal, sensitive, or identifiable information. The Digital Personal Data Protection Act, 2023 (DPDPA), regulates how such data can be collected, stored, and used in India. Artificial intelligence systems must follow these rules to protect user privacy and prevent the misuse of personal data.

1. Use of Personal Data in Artificial Intelligence Training

Artificial intelligence models are often trained using photos of real people, videos, voice samples, social media data, behavior patterns. If personal data are collected or used without permission, it may violate the Digital Personal Data Protection Act, 2023.

2. Consent for Artificial Intelligence Dataset Collection

a. Data Collection Consent

The Act requires that personal data be collected only with clear and informed consent.

For artificial intelligence influencers, this means developers must ensure the datasets used for training have proper permissions. Users must be informed if their data are being used to improve artificial intelligence tools or engagement algorithms.

Limitation

This rule states that personal data must be used only for the purpose for which it was collected.

For artificial intelligence influencers:

1. If data are collected to improve recommendations, they cannot be used for advertising without additional consent.

2. If user behavior is tracked for analytics, it cannot be used to target them emotionally or commercially without permission.

 Liability of Platforms and Developers

Under the Digital Personal Data Protection Act:

 The data fiduciary (the company controlling the artificial intelligence influencer) is responsible for protecting user data, the data processor (software developer or agency) must follow strict security and compliance rules. They can face penalties if personal data is misused, data is leaked, Consent rules are violated. Companies running artificial intelligence influencers must protect user data and follow the rules or face fines.

 Behavioral Data Collection by Virtual Influencers

Artificial intelligence influencers can collect user reactions likes, comments, shares, emotional responses, viewing patterns. This is “personal data” because it reveals the behavior, habits, and preferences of the user. Such data triggers Digital Personal Data Protection Act compliance obligations such as consent requirements, user access rights, deletion rights. Even online behavior is considered personal data and must be protected.

Cross-Border Data Transfer Issues

Artificial intelligence datasets are often stored on foreign servers. The Digital Personal Data Protection Act allows cross-border data transfers only to countries approved by the Central Government. For artificial intelligence influencers, this means Data cannot be sent to non-approved countries, Foreign artificial intelligence tools must follow Indian data protection rules, international storage must ensure security. Personal data cannot be freely sent outside India; it must follow government rules.

 Critical Analysis

1. No specific legislation for artificial intelligence influencers

India currently lacks a dedicated statute regulating artificial intelligence advertising. Existing laws are indirectly applicable. This creates uncertainty about the following:

• how to classify artificial intelligence influencers,

• who should be held responsible for their statements, and

• What due diligence requirements must be followed?

2. Deepfake risks and synthetic media manipulation

Artificial intelligence systems can generate hyper-realistic images, digitally manipulated videos, and computer-generated product demonstration. This increases the risk of fake impressions and deceptive content being generated.

3. Accountability challenges

Artificial intelligence influencers may be created by software developers, marketing agencies, graphic designers, brand owners, or a combination of several entities. Identifying the primary responsible entity can be complicated.

4. Data protection concerns

Artificial intelligence influencers often use datasets that include images, videos, or voices of real people. This raise concerns under the Digital Personal Data Protection Act of 2023, especially regarding consent and data privacy.

 Recent Developments

1. The Advertising Standards Council of India issued advisories in 2022, 2023, and 2024, emphasizing transparency in artificial intelligence-generated content.

2. The Government of India is working on the Digital India Act, which aims to regulate artificial intelligence systems and digital intermediaries more comprehensively.

3. International developments, such as the European Union Artificial Intelligence Act, are likely to influence Indian policy soon.

This shows that India is moving toward stronger regulation of artificial intelligence-driven endorsements.

 Suggestions 

1. Clear regulations for artificial intelligence influencers

There is a need for specific rules defining artificial intelligence influencers, their obligations, and the responsibilities of the organizations controlling them.

2. Mandatory human supervision

A human compliance officer should be responsible for verifying every claim made by an artificial intelligence influencer.

3. Artificial intelligence transparency labels

All advertisements created by artificial intelligence should include labels such as: “This content is generated by Artificial Intelligence,” Digital avatar endorsement, “to avoid misleading the consumers.

4. Fixed accountability structure

The law should clearly identify who is liable: the software developer, the creative agency, the brand, or all of them together.

5. Ethical guidelines for synthetic media

India should develop an ethical framework to prevent the followings deepfakes, deceptive editing and use of real human likenesses without consent.

Role of Social Media Platforms

Platforms such as Instagram, YouTube, Facebook, and TikTok must ensure proper disclosures, review of artificial intelligence-generated sponsored content, removal of harmful or misleading deepfakes, labelling artificial intelligence content where required. These duties arise from the Information Technology Rules, 2021.

Conclusion

Artificial Intelligence influencers represent a transformative step in digital advertising. Although India has not created a separate law for artificial intelligence endorsements, the existing legal framework, led by the Consumer Protection Act, 2019, and the Advertising Standards Council of India, fully applies to them. The people controlling artificial intelligence influencers must ensure that all advertisements are truthful, transparent, and compliant with the law. As artificial intelligence technology evolves, India must develop clearer regulations to maintain consumer trust and ensure responsible digital innovations.

Bibliography

Primary Sources 

Legislation

Consumer Protection Act 2019.

Copyright Act 1957.

Digital Personal Data Protection Act 2023.

Indian Contract Act 1872.

Information Technology Act 2000.

Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021.

Cases

Common Cause v Union of India AIR 2018 SC 1665.

Horlicks Ltd v Zydus Wellness Products Ltd AIR 2020.

Justice K S Puttaswamy (Retd) v Union of India (2017) 10 SCC 1.

Secondary Sources 

Reports, Guidelines, and Policy Documents

Advertising Standards Council of India, Guidelines for Influencer Advertising in Digital Media (2021).

Advertising Standards Council of India, Disclosure Guidelines for Online Advertising (2021).

Advertising Standards Council of India, Advisory on Artificial Intelligence Generated Content (2023).

Ministry of Electronics and Information Technology, Government of India, Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules (2021).

Ministry of Electronics and Information Technology, Government of India, Digital India Act – Consultation Framework (2023).

European Union, Artificial Intelligence Act (Proposed Regulation, 2021).