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An overview of influencer marketing laws in India and Sweden
Influencer marketing in India is governed by a blend of consumer protection, advertising, privacy, and intellectual property laws designed to ensure transparency, ethical conduct, and accountability. The cornerstone regulation is the Consumer Protection Act, 2019, which empowers the Central Consumer Protection Authority (CCPA) to penalize misleading endorsements. Influencers are considered endorsers under this framework and must ensure that promotions are honest, substantiated, and clearly marked as advertisements; failure to do so can result in substantial fines or bans. Building on this, the CCPA Guidelines for Social Media Influencers (2022) mandate that sponsored content must be disclosed using clear labels like #ad or #sponsored, and influencers must verify product claims before promotion. Complementing these are the ASCI Guidelines for Influencer Advertising (2021), which further emphasize transparent disclosures, format-specific requirements, and language consistency across posts. Influencers must also comply with copyright and trademark laws, ensuring no unauthorized use of protected content, and must respect data privacy norms under the Digital Personal Data Protection Act, 2023, especially when collecting or sharing user data. The Information Technology (IT) Rules, 2021 require platforms and influencers to avoid harmful or unlawful content, while defamation laws may apply if false or damaging claims are published. Contracts between influencers and brands are expected to outline the scope of work, ownership rights, and payment terms to mitigate risks.
Similarly, influencer marketing in Sweden is governed by multiple laws and regulations, including the Swedish Marketing Act (Marknadsföringslagen), the Consumer Sales Act (Konsumentköplagen), GDPR, intellectual property laws, and, in certain cases, employment law through the Swedish Employment Protection Act (Lagen om anställningsskydd). In addition, there are international standards that influence national practice—most notably the ICC Advertising and Marketing Communications Code, which forms the basis for self-regulation. These legal frameworks set the foundation for how influencer marketing should be conducted to ensure transparency, fairness, and consumer protection. Swedish authorities have also developed a variety of guides and guidelines aiming to ensure a simpler way to compliance by sharing standards and precise ways of doing influencer marketing on social media. For example, Skatteverket has issued guidance on how influencers should handle taxation when it comes to income from collaborations, gifts, or sponsored content. Konsumentverket provides clear recommendations on how marketing in social media must be labeled to meet the requirements of the Swedish Marketing Act. Reklamombudsmannen (RO) enforces i.a., the ICC Code in Sweden and also regularly shares case-based interpretations on what constitutes compliant influencer marketing posts on social media.
Highlighting key differences
Understanding who bears the tax burden and how influencer income is taxed in India and Sweden
In India, influencers are treated as professionals or service providers for tax purposes, and all income they earn, whether through cash payments, sponsored posts, free gifts, barter deals, affiliate commissions, or platform ad revenue, is taxable under the head “Profits and Gains of Business or Profession.” Influencers bear the primary tax burden and must pay income tax on their total earnings after deducting allowable business expenses like equipment costs, internet bills, or travel expenses. Their income is taxed at applicable slab rates for individuals or corporate rates if they operate through a company. Additionally, influencers are subject to Goods and Services Tax at 18% if their annual turnover exceeds ₹20 lakh, and GST liability also arises on barter transactions where brands provide free products or services in exchange for promotional content, the influencer must pay GST on the fair market value of such benefits. Brands or agencies engaging influencers usually deduct TDS (Tax Deducted at Source) from payments, typically at 10% under section 194J for professional fees, which influencers can claim as credit while filing returns. Crucially, free gifts or products are not tax-free; influencers must declare their fair market value as income. Hence, influencers must maintain proper records, issue GST invoices if registered, and ensure timely filing of income tax returns to remain compliant and avoid penalties.
In Sweden, influencers are generally considered self-employed professionals or service providers for tax purposes. The income they earn, including gifts, affiliate commissions, and ad revenues, is taxable as business income. Influencers are responsible for reporting and paying income tax on their total earnings after deducting allowable expenses. Influencers must register for F-skatt (corporate tax registration) if they run a business, which allows them to manage their own tax and social security contributions. Additionally, influencers must register for and pay Value Added Tax (VAT) if their annual turnover exceeds the set VAT threshold. Gifts or products received as part of collaborations are considered taxable income at their fair market value. To comply with Swedish tax laws, influencers must maintain accurate records, issue VAT invoices if registered, and file timely tax returns to avoid penalties. If the influencer does not have F-skatt, the brand or agency collaborating with the influencer is responsible for withholding A-skatt (income tax) and social security contributions before paying the influencer. Many actors in the industry use umbrella companies to manage taxes and administration. In some cases, if influencer activities are small-scale, infrequent, and not conducted with the intention to make a profit, the Swedish Tax Agency may classify them as a hobby rather than a business. Income earned from hobbies is still taxable, but the tax treatment is generally simpler.
Headline-making cases from India and Sweden
In India, in June 2022, the Central Consumer Protection Authority (CCPA) in India issued the Guidelines for Prevention of Misleading Advertisements and Endorsements, significantly impacting brands, advertisers, and influencers. These guidelines, framed under the Consumer Protection Act, 2019, aim to curb deceptive advertising practices and protect consumer interests, especially given the surge in influencer marketing on social media. They make it mandatory for influencers and celebrities to clearly disclose any material connections they have with brands, such as paid partnerships, free products, gifts, or other benefits, using unambiguous terms like “Ad,” “Sponsored,” or “Paid Promotion.” The guidelines also require endorsers to actually use the products they promote and ensure that any claims they make are truthful and backed by evidence. Further, they ban surrogate advertising and prohibit bait advertisements that lure consumers with offers without supplying the advertised goods or services. Violations can attract penalties of up to ₹10 lakh for a first offence and higher fines or even a ban on future endorsements for repeat violations. Since these guidelines came into force, the CCPA has issued numerous notices to influencers and brands across sectors like health, beauty, and crypto for failing to comply, prompting widespread changes in influencer practices and advertising contracts in India.
In Sweden, influencer marketing is strictly regulated to ensure transparency and protect consumers. Some particularly sensitive areas are health, advertising to children, and nutrition. In the landmark case PMT 798-19, the Swedish Patent and Market Court of Appeal ruled that a Swedish influencer’s posts promoting a brand of sunglasses constituted marketing, even though only two posts were formally agreed upon in her contract. The court found that an all-expenses-paid trip, arranged by the brand, implied a broader commercial relationship. A total of 17 social media posts and two YouTube vlogs were therefore classified as advertising. The court emphasized that influencer marketing must be clearly identified as such, and that vague labels like “in collaboration with” are insufficient. This case clarified that both explicit and implicit brand collaborations must meet transparency standards to avoid misleading consumers. Influencers must avoid misleading or unsubstantiated claims. For instance, in 2020, the Patent and Market Court ruled against a well-known influencer with 150,000 followers for falsely claiming that fish oil (omega-3) boosts the immune system and protects against COVID-19 (case PMT 5929-20). The court found these claims unsupported by scientific evidence, labeling the marketing as aggressive and exploitative, especially during a pandemic, when consumers’ decision-making abilities are impaired. Similarly, the Swedish Advertising Ombudsman reprimanded another prominent influencer with 1.4 million followers for promoting menstrual tampons with unsubstantiated superiority claims and implying that competitors’ products were unsafe. The authority found that the influencer lacked the expertise to make such health-related claims and that the statements were misleading (case 2103-53). These cases underline the heavy responsibility influencers bear and emphasize that brands must ensure their partnered influencers promote truthful, evidence-based content. Influencers are also required to clearly disclose material connections with brands, such as paid promotions or free gifts, using transparent labels like “annons” (advertisement) or “sponsrad” (sponsored), following guidelines issued by the competent authorities. Violations of these advertising rules can lead to warnings, injunctions, fines, or other sanctions.
Conclusion
While India and Sweden have their different regulatory frameworks governing the creator economy, there are notable similarities that reflect shared principles. Both countries require influencers to clearly disclose paid or sponsored content, ensuring transparency for consumers. Influencer marketing in both jurisdictions falls under the ambit of consumer protection laws, with misleading or deceptive endorsements carrying the risk of penalties and enforcement actions. Importantly, brands and influencers share liability for non-compliant content, and agencies or intermediaries may also face accountability. Additionally, both India and Sweden impose stricter rules when it comes to marketing aimed at children or sensitive audiences, highlighting the need for extra caution and responsibility in such contexts. As the digital landscape continues to grow, aligning practices with these legal frameworks remains crucial for all players in the influencer ecosystem.
