Senguttuvan K- Partner
The proximate relationship between brands and celebrities in India are not a new conception to the world of advertising industry. The advertising market in India though, not formally governed by any legislations in place, however, is bound and regulated by the non-statutory body Advertising Standards Council of India (ASCI). It is significant to note that Celebrity endorsements has been a crucial aspect of Indian marketing evidenced by the fact that almost 50% of endorsements in India feature celebrities in their most remarkable manner. A widely accepted norm within the advertising industry in India is the fact that marketers believe that celebrity brand ambassadors provide a higher degree of consumer recall. This is pretty based on a simple logic. India is always believed to be a country where people are star-struck by great film stars, politicians, sports personalities, etc. Hence, people idolize them and when they get to perceive them on the television screen or any other online platform, endorsing a remarkably reputed brand, it indeed grabs all the eyeballs. On a legal realm, till recently, there were no laws or guidelines that made celebrity endorsers personally liable for false and misleading advertisements. However, with the introduction of new guidelines, the endorsement agreements executed between brands and celebrities are increasingly becoming more stringent and exposing the celebrities to severe monetary and professional risks.
The Advertising Standards Council of India (ASCI) had recently published new guidelines, “Guidelines for Celebrities in Advertising” to ensure that claims made by celebrities in advertisements are not false and misleading, Further, it is also made sure through the Consumer Protection Act, 2019 that the onus to verify the veracity of the claims made in the advertisement regarding the products or services is on the celebrities and thus, confers accountability and legal liability. To be on a safer side of the legal protection, many brands now insist on a ‘moral clause’ which entitles the brands to terminate endorsement agreement, if, in the opinion of the brand, the celebrity has committed any act or does anything which might tend to bring him into public dispute, scandal or ridicule, or which might tend to reflect unfavorably on the brand. These clauses are broad and discretionary.
Thus, celebrity endorsements in India could be perceived as a powerful and effective marketing strategy enhancing beneficial brand recall and recognition within the marketing and advertising industry. An easy way to measure the effectiveness of these celebrity led endorsements is by posting their data on social media and thereby, enabling the review of effective advertising strategy. Hence, Celebrity endorsements via advertisement can be treated as a double edged promotional sword.
II. ADVERTISING STANDARDS COUNCIL OF INDIA GUIDELINES
The Advertising Standards Council of India (the “ASCI”) is a voluntary, non-governmental body with the aim and purpose of providing self-regulation of advertising practices in India, ensuring the protection of the interests of consumers. With the rampant rise of celebrity endorsers acting as influencers, persuading the general public to purchase a particular brand/ product or avail the services, serving as a promise of quality, thereby inclined to building instant recognition and credibility. Though, it may seem that these celebrities are not conferred with any kinds of responsibilities or duties, and that they are only mere influencers, deployed by huge repute brands and marketers to increase the credibility to their brand offering, rather the scope is much broader that what it may appear. In the year 2017, the Advertising Standards Council of India proposed certain “Guidelines for Celebrity Advertising” with the objective to regulate the content of advertisements by celebrities. The ethos of the Guidelines is marked by its Preamble, declaring that advertisements featuring celebrities must ensure that claims made in them are not misleading, false or unsubstantiated. Further, the definition of ‘Celebrities’ is extremely wide in these Guidelines, to include actors and sportspersons and other eminent individuals like doctors, authors, activists, etc.
A brief mention of some of the guidelines as enumerated under the “Guidelines for Celebrity Advertising”, directed to both Advertiser and Celebrity are as follows:
- Due Diligence is done to ensure that all description, claims and comparisons made in the advent can be substantiated and are not deceptive/ misleading.
- No tobacco based products bearing health warning should be endorsed by celebrity.
- No product /treatment/ remedy which are prohibited under the Drugs & Magic Remedies and the Drugs & Cosmetics Act, should be endorsed by celebrity.
- Testimonials, endorsements or representations of opinions or preference of Celebrities must reflect genuine, reasonably current opinion of the individuals making such representations and must be based upon adequate information about or experience with the product or service being advertised.
With these guidelines in force, the onus / burden of proof is on the celebrities to recluse themselves from endorsing a product or service which propagates absurd products and / or products where the claims remain unsubstantiated and desired results may not be attained. However, these Guidelines are not statutorily binding, but are mere voluntary in nature and do not enforce any kinds of sanctions or penalties for such incidents of misleading or false claims advertised by the celebrities.
III. CONSUMER PROTECTION ACT, 2019
The dire need for a comprehensive law to fix liability of endorsers for featuring in advertisements which make false and misleading claims was greatly felt. Thus, it was only in 2015 that India, woke up to address these challenges with the Consumer Protection Bill, 2018. India’s take on misleading advertisements and celebrity endorsements has gained a stronghold with Amendments to the three decade old Consumer Protection Act, 1986 which were introduced in August 2019. The Consumer Protection Act, 2019 now provides for penalties for misleading advertisements made by endorsers. Pursuant to Section 21 of the Consumer Protection Act, 2019, the Central Authority under the Act may order discontinuation / modification of a misleading / false advertisement which is prejudicial to the interest of the consumer or in contravention with the consumer rights. The Act also provides for penalties on the endorsers of false and misleading advertisement, which may extend to Rs. 10 lakh rupees and up to Rs.50 lakh rupees for every subsequent contravention. In addition to this, the Central Authority my further prohibit the endorser of a false or misleading advertisement from making endorsement of any product or service for a period which may extend to one year and up to three years for every subsequent contravention.
The Act tends to inculcate a sense of responsibility among celebrities and aims that they should know what they are dealing with. Due Diligence on their behalf is necessary, even though it may be hard for them to look into the intricacies of the product.
As stated earlier, the ASCI Guidelines are non-statutorily binding and have no legal enforceability in terms of penalties and sanctions. On the other hand, Consumer Protection Act, 2019 is a legislation that has in recent, proved to effectively regulate the incidents of celebrity endorsements from a consumer rights point of view. Till date, besides the ASCI and the current Consumer Protection Act, 2019, there were no holistic statutory structure to reign in celebrity endorsers who become a part of misleading advertisements and promotional features. The recent Amendment in the Consumer Protection Act, 2019 will fundamentally alter the way in which contracts between celebrities and brands are negotiated and worded, especially since now, the celebrities will have greater responsibility / liability in comparison with the situation prior to the amendment. With the recent amendments in the Act, the spirit behind the legislation, i.e., Consumer is King, shall be duly met and complied.