In this article, Shubham Kumar discusses accountability of celebrities for endorsing false claims in an advertisement.  

Introduction 

Since 1991 the competition among manufacturers has increased because of the opening of the economy. To stand in the market and to make profits they devise new techniques to sell their product in the form of product innovation, attractive packaging, offering discounts, etc. One of such technique is “Advertisement.” In layman’s term advertisement can be defined as the promotion of a product through audio-visual or print modes. To advertise the products the trend among big companies is to hire the services of a celebrity. The reason for hiring celebrities in India is that celebrities dominate common people lives in India. A common man in India tries to copy whatever his/her favourite celebrity does, tries to imitate them and believes whatever the celebrities promote is good and buys such product. Thus, promotion of a product by a celebrity plays a major role in the decision-making process of the consumer and hence laws should be in place to regulate celebrities promoting a product.

What is an advertisement?

• An advertisement is a means of communication between the seller of a product and a user of the product, where the seller informs buyers about the product through mediums like newspapers, journals, radio, posters, sounds, visuals, etc.
• In the case of Suswarajya Foundation, Satara vs. The Collector, Satara And Anr, an advertisement is defined as any representation in any manner such as announcement or direction by words, letters, models, signs or by any means of a poster, hoarding, etc.

What are the laws governing an advertisement in India?

Provision under the Consumer Protection Act, 1986

Under Section 6 of the Consumer Protection Act, 1986 a consumer has the right to be informed about the quantity, quality, purity, standard of the goods and services, as the case may be and to protect the consumer against unfair trade practices. Under Section 2(r) of the same act, “unfair trade practices” includes false advertising, misrepresentation as well as false allurement. Thus, the act provides protection against false advertisement. The redressal mechanism is provided in the Act itself.

Provision under the Cable Television Network (Regulation) Act, 1995

Under Section 6 of the Cable Television Network (Regulations) Act,1995 provides that no person shall broadcast any advertisement unless the advertisement is in conformity with Cable Television Network (Amendment) Rules, 2016.

Provision under the Indian Penal Code, 1860

Under Section 273 of IPC, whoever offers for sale any article unfit for consumption having reason to believe that the same is unfit for consumption shall be imprisoned for a term which may extend up to six months or a fine or both.

Past controversies related to celebrity advertisement

• Recently FIR against celebrities like Madhuri Dixit, Preeti Zinta, Amitabh Bachhan was registered for promoting Maggi as nutritious food after the lab samples showed a high quantity of MSG and lead harmful to human consumption.
• In 2012, FIR was registered against Genelia D’ Souza for making false promises in the brochure of a real estate firm.
• Jaya Bachchan and Amitabh Bachhan were also involved in legal troubles after they endorsed Tanshiq as the only brand which offered true diamond.

What are the laws under which celebrities can be made liable for false claims in an advertisement?

• Under Section 24 of the Food Safety and Standards Act, 2006 if a person engages himself in misleading representation concerning quality, standard, quantity, grade or usefulness of a food product or he makes any statement giving a guarantee to the public of the efficacy of the product which is not based on an adequate or scientific justification will be liable under Section 53 of the Act for a penalty of INR 10 lakh rupees.
• The Act applies to any person. Thus, its ambit extends to celebrities too. Under this Act, celebrities can be made liable for false representation. The burden of proof of lies on the celebrities to prove that such statement was made on an adequate ground.
• In the present legal framework, a celebrity can be held liable for inappropriate advertisements and promotional activities of products that adversely affect the interest of consumers, under statutory provisions of the Food Safety and Standards Act, 2006, and the Indian Penal Code, 1860, and as well as under the Consumer Protection Act, 1986. However under the proposed provisions of the bill celebrities who make false or misleading claims in their endorsements would be subject to heavy penalties.

Celebrities endorsement: A look at the Consumer Protection Draft Bill, 2015

The business scenario in India is under a revamp. The introduction of CSR has made companies responsible towards society for its acts. Under such scenario liabilities of celebrities who influence a major chunk of the population should also be increased so that they exercise due care while promoting products which are likely to affect the society. Celebrities who enjoy such prestige of the members of the society should, in turn, give back to the society by not doing any such act due to which society will suffer.

After the Maggi fiasco, the topic of making celebrity brand ambassador responsible had been in the spotlight. The report by the Parliamentary Committee on Food, Consumer Affairs, and Public Distribution recommended stringent provisions to handle misdirecting ads and to settle risks on endorsing celebrity.

As a result of that, the Ministry of Consumer Affairs, Food and Public Distribution, GOI on August 10, 2015, introduced The Consumer Protection Bill, 2015.

Under the new bill, Celebrities liability towards false representation has been increased. The bill if passed will make celebrities liable for any false or misleading advertisement.

What is the punishment for celebrities in case of misleading advertising under the new bill?

Section 75B has been added which states, any reckless endorsement by brand ambassadors who exercise influence on consumers without any due diligence or truthfulness of claims made by the product, advertises such product shall be made liable for an imprisonment up to 2 years and fine of INR 10 lakhs for the first offence, and imprisonment of 5 years along with a fine of INR 50 lakhs for the second and subsequent offences.

Who can prosecute the celebrities for misleading advertisement?

The proviso attached to 75B, however, states that the liability for misleading advertisement can be done away with. It is a duty of a brand ambassador to take all precautions and due diligence before endorsing the product.

Thus, the proposed law does not make the celebrity ipso facto liable or vicariously liable for products of the manufacturer. The liability arises only when he does not exercise due care in finding out the true nature of the product. For example, the endorser will not be liable if he makes a claim that the product tastes good or the perfume has a good fragrance, but he will be liable if he makes a claim that a food product is healthy, but in reality, it contains ingredients harmful for human consumption.

Another feature of the draft bill is that the consumer cannot criminally prosecute the celebrity for a false claim. This means that it is not open for individuals to start a criminal proceeding against celebrities for false claims in an advertisement. Criminal Prosecution can be done only by an officer of the Central Consumer Protection Authority, duly authorized by the Chief Commissioner.

Another protection given to celebrities is that in case they shell out monetary damage charges against them can be dropped.

Though the Consumer Protection Bill,2015 has not been passed from Rajya Sabha, once passed it will increase the liability of celebrities many folds.

Further details of the bill can be accessed at http://www.prsindia.org/uploads/media/Consumer/Consumer%20Protection%20bill,%202015.pdf

Ninth report of the standing committee on food, consumer affairs, and public distribution

The Consumer Protection Bill, 2015 was placed before a standing committee which took suggestion about the bill from various organisations like FICCI, ASSOCHAM, Consumer Education and Research Centre, Ahmedabad, NLSIU, Banglore, etc. After taking suggestions from the experts, the committee opined, false claims in an advertisement by celebrities need to be dealt stringently since consumers believe whatever is said by the celebrities blindly. The Committee strongly feels that the existing laws are not deterrent enough to discourage manufacturers or publishers from using such personalities for misleading advertisements. The Committee, therefore, recommended that stringent provisions may be made in the Bill to tackle misleading advertisement, as well as to fix liability on endorsers/celebrities. The Committee recommend that for first time offense, the offender may be penalized with either of a fine of Rs. 10 lakhs and imprisonment upto two years or both, for second time offence, a fine of Rs. 50 lakhs and imprisonment for five years and for subsequent offences, the penalties may be increased proportionally based on the value of sales volumes of such products or services.For more details about the report of the standing committee(see here).

Is the bill violative of the fundamental right of trade and occupation of celebrities?

No, in the author’s opinion a restriction on celebrities against endorsing harmful products cannot be said to be in violation of their fundamental rights under Article 19(1)(g) which guarantees citizens freedom of trade and occupation. Under Article 19(1)(g) a citizen is free to engage in any profession he likes, however, such a freedom is regulated by Article 19(6). Under Article 19(6) government can impose reasonable restriction on freedom of trade and occupation in the interest of general public. This will include the health of the citizens of India. No one can be allowed to play with the health of citizens of the country at the cost of the right of celebrities to freedom of trade and occupation. In the past, SC has regulated freedom of trade and occupation where the health of public was involved. In the case of State of Punjab vs. Devans Modern Breweries Ltd., the SC has regulated liquor business as it affected with the health of the public. Thus, a ban on selling of liquor was held not violative of freedom of trade and occupation. Similarly, in this case also celebrities cannot be allowed to advertise those products which are harmful to the health of public and such a regulation by the central government in the form of Consumer Protection Bill,2015 is intra vires to the Constitution of India.

Conclusion

Thus, in the lights of the expanding economic horizons of the country, it is the need of the hour to preserve the concept of Welfare State in India. To abide by such a concept, the government needs to frame strict regulations against any person be it a celebrity or a politician or big corporate house. No one should be allowed to play with the health, peace and well being of the citizens of the country. Till now, no celebrity has ever been prosecuted for any misleading claims in the advertisement. But once the proposed bill is passed the responsibility of celebrities towards society would be enforced by a legal backing.