Celebrities to be Booked for Misleading Advertisements under new Consumer Protection Laws: An Analysis

Present Scenario

In the era of cut-throat market competition, advertising is the backbone activity to shoot up the sales. Celebrity endorsement has become a part of strong marketing strategy. These celebrities also get a platform to endorse themselves as individual and earn a huge amount of money.  The celebrities have become perfect arrows to hit the target market. The consumer is considered as the king of the market who is in most of the cases gets influenced by celebrities. The market patterns are greatly influenced by the celebrity endorsements as consumer falls into the trap of this marketing strategy. Manufactures, service providers, advertising agencies spend excessively to lure customers. Due to this promotional strategy, the consumer ends up paying more for the product.

The Modi government prepared Consumer Protection Bill, 2018 to protect the rights of the consumers. The Bill was introduced in Lok Sabha by the Minister of Consumer Affairs, Food and Public Distribution, Mr. Ram Vilas Paswan on January 5, 2018. The Bill replaces the Consumer Protection Act, 1986. The rights of the consumer have been defined under Section 2(9) of the Bill. It is the right of a consumer to be protected against those goods or services which are hazardous to life and property. It is also a right to seek redressal against unfair trade practices defined under section 2(47) of the Bill.

Central Consumer Protection Authority protects the consumers

The Bill has established Central Consumer Protection Authority [CCPA] under Section 10 of the Bill to address the false and misleading advertisements. The CCPA has the power to issue directions and penalties against false or misleading advertisements under Section 21 of Bill. The CCPA can discontinue or modify the false or misleading advertisement which is prejudicial to the interest of the consumer or is violating the rights of the consumer. The Authority can impose the penalty against the manufacturer or the endorser which may extend to 10 lakh rupees for violating the consumer’s right. It is the discretion of the Authority to impose the penalty which may extend to fifty lakh rupees for subsequent t contravention by a manufacturer or endorser. The Authority can also prohibit the endorser of a false or misleading advertisement from making the endorsement of any product or service for a period which may extend to one year. In the case of subsequent contravention by such endorser, the Authority may prohibit such endorser from making the endorsement in respect of any product or service for a period which may extend to three years. The Authority has the power to punish the publisher of such misleading advertisement by the imposition of the penalty which may extend to ten lakh rupees.

The Bill has provided a remedy to the endorser to escape the penalty. The Bill imposes the duty of due diligence on the endorser.  The endorser has to prove that he has exercised due diligence to verify the veracity of the claims made in the advertisement regarding the product or service being endorsed by him. No person shall be liable to such penalty if he proves that he had published or arranged for the publication of such advertisement in the ordinary course of his business, provided that no such defence shall be available to such person if he had previous knowledge of the order passed by the Central Authority for withdrawal or modification of such advertisement. The Authority shall regard the following while determining the penalty under Section 21:

  • the population and the area impacted or affected by such offence;
  • the frequency and duration of such offence;
  • the vulnerability of the class of persons likely to be adversely affected by such offence; and
  • the gross revenue from the sales effected by virtue of such offence.

The Bill punishes any manufacturer or service provider for false or misleading advertisement. They can be punished with imprisonment for a term which may extend to 2 years and with fine which may extend to 10 lakh rupees; and for every subsequent offence, be punished with imprisonment for a term which may extend to 5 years and with fine which may extend to 50 lakh rupees.

Conclusion and Suggestion

Introduction of this bill is a commendable step taken for the protection of rights of the consumers. It has been evident while analyzing this Bill, that the provisions for regulating the advertisements have been drafted in the parlance of the Code for Self Regulation in Advertising made by the Advertising Standards Council of India. Even in the real-estate sector, the endorsements are regulated under Section 12 of the Real Estate (Regulation and Development) Act, 2016. There are still loopholes in the Bill regarding the liability of the celebrities. The celebrities just have to pay the penalty in case of the default which is just like buying peanuts for them. The quantum of the penalty must be increased and there must be a provision of imprisonment for them too so that the duty of due diligence is carried out more cautiously.

References

  • http://www.prsindia.org/uploads/media/Consumer%20Protection,%202018/Consumer%20Protection%20Bill,%202018.pdf
  • http://www.prsindia.org/uploads/media/Consumer%20Protection,%202018/Bill%20Summary%20-%20Consumer%20Protection%20Bill,%202018.pdf
  • http://www.indiacode.nic.in/acts-in-pdf/2016/201616.pdf
  • https://ascionline.org/images/pdf/code_book.pdf

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