E-comm firms put gag on celebrity endorsers

Ambassadors barred from making statements that could hurt brand

- Pavan Burugula & Krishna Yadav

When an e-commerce company was looking to hire local brand ambassadors for Diwali promotions in north and central India, the contracts had a curious clause: The ambassadors would be prohibited from making any political statements that could hurt people’s sentiments and bring disrepute to the company. The celebrities would also be liable for any revenue loss due to such statements, said a lawyer who was involved in the negotiations.

Many e-commerce companies have begun to impose stricter conditions on celebrities and influencers endorsing their brands to prevent potential harm from their comments on sensitive matters, people aware of the matter said.

Contracts often feature a clause that if the actions of the celebrity adversely impact the company, it will have the power to claim damages from the brand ambassador.