MISLEADING ADS

The Ministries of Consumer Affairs and Law have approved changes in the Consumer Protection Act to provide for a jail term of up to 5 years, apart from a penalty of Rs 50 lakh for false and misleading ads.

Decks have been cleared for making celebrity brand ambassadors accountable for endorsing products that make unrealistic claims.
The government's move has been prompted by a report of the Parliamentary Committee on Food, Consumer Affairs and Public Distribution, which favoured "stringent provisions to tackle misleading advertisements, as well as to fix liability on endorsers/celebrities."

Backgrounder

The question of making brand ambassadors accountable has been in the spotlight since the alleged presence of monosodium glutamate and excess lead in Maggi noodles, which was endorsed by movie actors.

The clamour over the Maggi reports prodded the government into a delicate exercise to ascertain the legal and professional liability of brand ambassadors who endorse a particular brand. At a time when even companies are considered 'persons' with corporate social responsibility, the law was bound to evolve to regulate conduct of celebrities.

The draft bill

A scrutiny of the proposed legislation should clarify why brand ambassadors may not have to worry too much as long as they abide by the common law principles of due diligence and fair play.

While there are apprehensions that celebrities would have to take disproportionate flak for the products making claims that they often have no way of verifying, the proposed Consumer Protection Bill also lays down the specific defence.

Section 75B of the new Bill seeks to make any "false or misleading" endorsement which is "prejudicial to the interest of any consumer" a penal offence, punishable with a jail term of up to 2 years and a fine of Rs 10 lakh for the first offence, and imprisonment of 5 years along with a fine of Rs 50 lakh for the second and subsequent offences.
Section 75B seeks to penalise only reckless endorsements by brand ambassadors who proceed to exercise their influence on consumers without paying heed to the veracity and truthfulness of claims made by the products.

For example, a celebrity cannot be held accountable if he advertises how good a product tastes since he has tasted it, but if he claims that it is free from bugs and bacteria, the least he has to do is examine a lab report.

A celebrity need not be wary of facing trial in a criminal court on a complaint by a consumer - the proposed law lays down that no court shall take cognisance of such an offence except upon a complaint made by an officer of the Central Consumer Protection Authority, duly authorised by the Chief Commissioner.

Adding another layer of protection, the new law also allows for the compounding or settlement of the first offence by brand ambassadors - and the Central Authority, the government's department, has been empowered to do so. So, a charge of false and misleading advertisement can be dropped if the brand ambassador shells out monetary damages. If the prosecution has already begun in a trial court, the Central Authority could still seek exoneration of the brand ambassador by moving an application before the court, the proposed law states. If the court is satisfied, the accused may be discharged. The Bill also lays down that no proceeding, judicial or otherwise, can be instituted against a brand ambassador if the offence has been compounded under the law.

The crux of all this is that the power to commence prosecution of a celebrity brand ambassador will lie with an executive wing of the government, and it would not be open to a consumer to independently press charges against the ambassador in a court for false and misleading ads.