The notice was served to the CEO of a marketing agency and some social media influencers allegedly involved in a paid campaign to tweet negatively about the company.
On June 7th, Softbank-backed unicorn Meesho served a legal notice to the CEO of a marketing agency and some social media influencers allegedly involved in a coordinated smear campaign against the company. The alleged campaign sheds light on weak advertising guidelines for Influencer Marketing in India’s growing creator economy.
What Spurred the Legal Notice?
- Analysing four tweets by four unique Twitter users, Mr. Kumar noted that each tweet critiqued Meesho’s business strategies on similar lines while also tagging the company’s investors. These comments were all accompanied by a link to the same Economic Times article, co-reported by Pranav Balakrishnan and Digbijay Singh, detailing Meesho’s cost-cutting strategies amidst a slowdown in funding and larger macroeconomic growth.
- Mr. Kumar commented that this was an example of a smear campaign against Meesho by paying influential social media users to speak negatively of the company. Soon after his post went live, Twitter users Udita Pal (Co-founder, SaltPe) and Aashima Arora (Investment Lead, Polygon) added to Mr. Kumar’s discussion, sharing requests they’d received to share similarly negative content for a price. Both Ms. Pal and Ms. Arora turned down the offers.
- Meesho has not disclosed the specific law allegedly violated. However, its notice instructed the CEO to take down all ‘defamatory’ content posted, reveal on whose behest they were working, and issue an unconditional apology to the company. It also plans to send a legal notice to an influencer who admitted to being paid to post a negative tweet on the company.
- The company, in its letter, further hinted that this isn’t the first time a coordinated smear campaign has been organised against it. In a Twitter discussion, Chandra R. Srikant, Editor for Tech, Start-ups, and New Economy at MoneyControl, observed that articles on Meesho often receive coordinated abuse from ‘blue tick’ verified accounts once shared on the platform.
How Are Paid Influencer Posts Regulated in India?
A positive ad can spur sales for a company—while a negative one, as in Meesho’s case, can (allegedly) tarnish a company’s reputation. So, while influencers are at liberty to be paid to advertise specific products on social media, they have to be transparent about the nature of their collaboration with the advertiser. This lets the consumer judge for themselves the veracity of an influencer review, while protecting company interests too in the case of negative publicity. In this vein, the Advertising Standards Council of India (ASCI) released the ‘Guidelines for Influencer Advertising in Digital Media’ last June.
- The guidelines are an attempt to protect consumer interests in a crowded online marketplace, clearly stating that ‘disclosure is required if there is any material connection between the advertiser and the influencer.’ This material connection can encompass monetary compensation—as was the case with Meesho’s ‘critics’—or anything else of ‘value given to [the influencer to] mention or talk about the Advertiser’s product or service.’
- All an influencer has to do to comply with the posts is clearly mention ‘ad’ or ‘sponsored’ or other permitted keywords on a sponsored post, in a manner that can be understood by an average consumer.
- No such disclaimer was flagged in the tweets at the centre of the Meesho case—making it unclear if they were paid for or not.
Who Enforces These Guidelines?
While a 2019 Delhi District Court ruled that ASCI’s powers were binding on Indian companies, as it is a ‘voluntary self-regulatory’ body, whether it can institutionally enforce these guidelines remains circumspect.
- This is reflected in the ASCI Guidelines themselves: which opt for a ‘self-regulation’ approach, maintaining that the ‘responsibility of disclosure of material connection and also of the content of advertisement’ lies in the hands of the advertiser and influencer.
- While ASCI claims moderate success with ensuring compliance for early violators of the guidelines, given the significant growth in Influencer Marketing in India, these trends of undisclosed advertisements are likely to continue slipping through the cracks. While they may benefit the fortunes of some—for companies jostling for space in competitive, monopolistic sectors, they could have the opposite effect.
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