India is leading as one of the fastest-growing markets globally especially when we talk about digital marketing. India has a huge population with 800 million internet users as estimated in 2023. Now more people connecting on the internet means more opportunities for businesses to invest in the digital space, giving rise to the segment of digital marketing. With this growth, the legal and regulatory framework should be kept in mind to protect fair trade practices, maintain consumers’ interest and ensure data security and privacy.
Navigating The Regulatory Maze
Businesses have started to explore the vast digital marketing landscape in India. They need to stay vigilant and in tune with the laws and regulations that govern this area. There can be severe consequences that can arise from the failure of adhering to these legal requirements, this can include fines which in turn can cause severe goodwill damage to the company’s brand reputation and value.
Key Legal Requirements In India:
- Indian Contract Act 1872 lays the foundation for online agreements. Elements like terms of service-user agreements, and privacy policies play a crucial role in this area, this act makes sure that these online contracts are legally enforceable and binding. Businesses, especially those dealing in the field of digital marketing, should pay attention to the online contracts, and ensure that they are clear, unambiguous, and transparent, which further ensures that there is no confusion or misinterpretation.
- Information Technology Act, 2000 acts as a base framework that lays the foundation for the usage of electronic transactions, data, privacy in India, and cyber security. “Section 43A of the Information Technology Act (ITA) provides that anybody-corporate that possesses, deals or handles any “sensitive personal data” or information should maintain reasonable security practices and procedures relating to such data”.
- Consumer Protection Act, 2019, this act is designed to ensure and uplift consumers’ rights and to prevent unfair trade practices. With respect to digital marketing, this act does not allow misleading advertisements, deceptive pricing, false claims or any such practices that may mislead the users or consumers. The businesses dealing in digital marketing need to thoroughly review their campaigns and their models to ensure the compliance with Consumer Protection Act.
- The most notable development in 2023 was the Digital Personal Data Protection Act (DPDPA) which is India’s first data privacy law. This act which was inspired by Europe’s General Data Protection Regulation (GDPR) lays down the rights of the individual when it comes to their data being processed. This act also imposes obligations on businesses that store process or collect such data from these individuals. It’s crucial for businesses to adhere to these laws. Under DPDPA before collecting any individual’s personal data explicit and informed consent must be obtained from such individuals. In the space of digital marketing, marketers need to be transparent about how the data is going to be stored in their systems and used for any purpose.
The guidelines on influencer marketing which was released by the Advertising Standards Council of India (ASCI) back in November 2023. Which explicitly mentions that there needs to be a clear disclosure of any endorsement or paid partnerships by influencers. The consumer needs to be aware of any such partnerships. Only limited data should be collected by marketers, which is necessary for a lawful purpose, collecting excess data should be avoided. DPDPA also makes it mandatory for these businesses to adopt security practices to protect personal data from any kind of breach or unauthorised access.
Ensuring Compliance
How can these businesses maintain compliance? There needs to be a proactive approach that would navigate the legal landscape and mitigate risks, this would involve:
Comprehensive Risk Assessment: Marketers should ensure a thorough risk assessment that would identify the areas of non-compliance within their digital marketing practice. The assessment should be thorough and should cover a wide area of digital marketing. This could include data processing advertising, promotional activities, compliance with sector, specific guidelines, et cetera.
Robust Compliance Program: After conducting the risk assessment, there needs to be a thorough study of the assessment and a comprehensive compliance programme should be developed by businesses which outlines procedures, policies and controls which would mitigate those identified risks. The compliance programme should include regular audits and reviews to ensure ongoing compliance.
Governance and Oversight: Ensuring governance and oversight is crucial for managing and overseeing the compliance of the organisation. There also needs to be clearly established roles and responsibilities in the organisation. This may include setting up a functional team responsible for enforcing those compliance measures or appointing a dedicated compliance head.
Industry-Specific Regulations: A Deeper Dive
There are additional regulations under certain sectors:
- Financial Services:The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI), lays down certain guidelines when it comes to marketing financial services and products. This includes KYC (Know your customer) regulations.
- Healthcare & Pharmaceuticals: Drugs and Cosmetics Act, 1940 and Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, strictly regulate the marketing of medicines and healthcare products. It ensures that there are no misleading or false claims, safety and that the marketing is done ethically.
Conclusion
India is a fast-growing economy and its digital marketing landscape is rapidly growing. In the midst of all this, legal and regulatory compliance has emerged as an important aspect and a critical part of businesses. As the digital landscape of India continues to grow and flourish, businesses must ensure the latest regulatory developments and should be proactive in addressing the compliance requirements. By taking into account the compliance measures and ensuring the implementation of those within the organisation, businesses can not only build trust and credibility with the consumers but also mitigate the financial plus legal risks. Compliance is the key to maintaining and driving in the digital marketing Space in India’s rapidly evolving digital economy.
