LEGAL CHALLENGES FOR DIGITAL CONTENT CREATOR IN BRAND ENDORSEMENT DEALS ON SOCIAL MEDIA PLATFORMS IN INDIA – ZFiling Financial Services
BY: SMRITI BERLIA , BBA LLB 4TH YEAR , SENIOR EXECUTIVE, Zfiling Financial Services
1. INTRODUCTION:
As the digital content creation landscape evolves, social media influencers and content creators increasingly collaborate with brands to endorse products and services. While these partnerships offer lucrative opportunities, they also present a range of legal challenges. Understanding the legal framework, potential risks, and mitigation strategies is crucial for both content creators and brands to ensure compliance and protect their interests.
2. INTELLECTUAL PROPERTY RIGHTS
CHALLENGES:
• Content Ownership: Determining who owns the content created during the endorsement deal is a critical issue. Without clear contractual terms, disputes may arise over whether the creator or the brand owns the rights to the content, including videos, images, and other creative works.
• Trademark Usage: Brands may require creators to use their trademarks in the content. Unauthorized use or improper representation of trademarks can lead to infringement claims under the Trade Marks Act, 1999.
• Moral Rights: Content creators in India retain moral rights under the Copyright Act, 1957, which include the right to be credited and to object to derogatory treatments of their work. Disagreements may arise if the brand modifies the content in a way that the creator finds objectionable.
o KEY LEGAL FRAMEWORK:
• The Copyright Act, 1957: Governs the rights related to original works, including ownership, licensing, and moral rights.
• The Trade Marks Act, 1999: Regulates the use of trademarks and logos.
o MITIGATION STRATEGIES:
• IP Clauses: Contracts should clearly outline the ownership of content, the scope of any licenses granted, and how trademarks can be used. Both parties should agree on who holds the rights to the content and under what terms.
3. ADVERTISING REGULATIONS
o CHALLENGES:
• Disclosure Requirements: Influencers are required to disclose paid partnerships clearly, usually through hashtags like #ad or #sponsored. Failure to do so can lead to penalties and damage to both the brands and the influencer’s reputation.
• Misleading Claims: Under the Consumer Protection Act, 2019, creators must ensure that any claims made about a product or service are truthful and substantiated. Misleading advertising can result in legal action, including fines or lawsuits.
o KEY LEGAL FRAMEWORK:
o Advertising Standards Council of India (ASCI) Code: A self-regulatory code that sets guidelines for advertising, including influencer marketing.
• Guidelines for Influencer Advertising in Digital Media (2021): Issued by ASCI, these guidelines specifically address disclosures and content standards for influencers.
o MITIGATION STRATEGIES:
• Adherence to ASCI Guidelines: Ensure that all content complies with the ASCI Code and the 2021 guidelines for influencer advertising. Disclosures should be clear and conspicuous, and all product claims must be accurate and verifiable.
• Legal Review of Content: Both the brand and the creator should have the content reviewed by legal experts to ensure compliance with advertising regulations.
4. CONTRACT ENFORCEMENT
o CHALLENGES:
• Ambiguity in Contract Terms: Vague terms in the contract can lead to disputes over the obligations of each party. For example, if deliverables or timelines are not clearly
defined, disagreements can arise regarding whether the content meets the agreed standards.
• Enforcement of Payment Terms: Issues related to non-payment or delayed payments are common, particularly if the contract does not specify clear payment schedules or penalties for late payments.
• Dispute Resolution: Disputes may arise over contract interpretation, especially regarding content quality, delivery timelines, or the use of intellectual property.
o KEY LEGAL FRAMEWORK:
• The Indian Contract Act, 1872: Governs the formation and enforcement of contracts.
• The Arbitration and Conciliation Act, 1996: Provides a framework for resolving disputes through arbitration, which is often included in contracts.
o MITIGATION STRATEGIES:
• Comprehensive Contract Drafting: Contracts should be detailed, with clear definitions of deliverables, timelines, payment schedules, and penalties for non- compliance. Both parties should understand their obligations and the consequences of failing to meet them.
• Inclusion of Arbitration Clauses: To avoid lengthy court battles, include arbitration clauses in the contract to provide a faster, more cost-effective means of resolving disputes.
5. CONCLUSION
Brand endorsement deals on social media platforms present significant opportunities for both digital content creators and brands, but they also come with substantial legal challenges. By understanding the relevant laws and guidelines, identifying potential risks, and implementing effective mitigation strategies, both parties can navigate these challenges successfully. Legal advice, clear contracts, and strict adherence to advertising regulations are key to ensuring that these collaborations are both profitable and compliant with Indian law.
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