Consumer Protection Act 2019: Is the advertising landscape now headed for an overhaul?

Industry observers contend that it will all boil down to fair implementation of the law

e4m by Misbaah Mansuri
Updated: Jul 21, 2020 8:47 AM

In a first, the Ministry of Consumer Affairs will now be compiling code of conduct for advertisers and agencies, a move designed to curb unfair practices and misleading claims. Interestingly, the planned code will detail penalties for advertisers and their agencies and publishers if misleading advertising and false claims are found.
The law was enforced on Monday, July 20, 2020. With the voluntary and self-regulatory body The Advertising Standards Council of India (ASCI) welcoming the new Consumer Protection Act, the question that remains is: With the new law now coming to force, is the advertising landscape now headed for a reboot?
The law seeks to hold manufacturers, service providers and celebrity endorsers accountable for ads, stipulating heavy fines and even jail terms for misleading claims.
Industry observers contend that it will all boil down to fair implementation of the law. Agnello Dias, Co-Founder, Taproot Dentsu and Creative Chairman, Dentsu Aegis Network, observes, "Like with all laws in this country, its true nature lies in the implementation. Earlier we had strong implementation and weak implementation or non implementation. However, one can now add selective implementation to the list, given the way things have been going in the past few years. If it is implemented fairly and with some amount of reasonable rationale, it is actually a good law. If unimplemented, it really makes no difference. If implemented in a partisan and biased manner within the corporate world, that is the worst possible outcome.”
Moreover, the new law provides for e-filing of complaints and a video conferencing option to participate in complaint redressal.
Anil Nair, CEO of VMLY&R India, feels that a hybrid model will work best with the role of the federal oversight to be more of a deterrent and to add teeth alongside an element of quick closure to complaints.
“The move from self regulation to a more federated oversight has been brought about by the sheer proliferation of channels, platforms, networks and customer contact and commerce opportunities, thanks to the convenience of the digital economy. Lack of traditional entry barriers and brand building costs leaves the field wide open for newer brand and product formats, quicker with go-to market strategies and more choice for end customers. But at the same time, it leaves the customer prone to mis-selling, false claims and other unsavoury experiences. Also to mention the data-driven hyper targeting technologies currently at play makes the customer even more vulnerable to a pushy blindsiding approach which also needs to be kept in check inorder to protect customer interests, “ he notes.
According to the law, manufacturers and service providers that will violate the law will have to face jail terms of up to two years, along with fines of up to Rs 10 lakh while celebrities found guilty can be fined up to Rs 10 lakh. For repeat offences, the new authority can impose a fine of up to Rs 50 lakh and a jail term of up to five years. It can also bar a celebrity from endorsing ads for up to a year, extending it to three years for repeat offenders.
Says Sandeep Goyal, Founder, Mogae Media, “More than anything, it basically makes the ASCI irrelevant. Which frankly is no big loss. They have for long been a toothless body. I raised a big hue-and-cry about surrogate advertising last year but ASCI just maintained a stoic silence. They ensured that the complaints were buried under the system. I am hoping the new law becomes an instrument for consumer redressal. And not just a forum for companies to fight each other as part of their usual dirty-tricks that play out between them for market supremacy.”
Interestingly, this comes at a time when ads of products making tall claims seem to be on a rise.
In April alone, The Advertising Standards Council had discovered 50 advertising campaigns by ayurvedic and homoeopathic drug makers that claimed they had a cure for COVID-19.
Atul Hegde, Co-founder, Rainmaker Ventures, opines, “This is a very encouraging move by the government, while ASCI did act as a watchdog so far, it was pretty much toothless in the absence of tough laws. Now a CCPA in the picture will make all stakeholders - brands, agencies, celebrities, influencers and e-commerce players- a lot more responsible. In the COVID-19 era, food products especially in the immunity boosting category, have seen a huge boom and most of them are rampant with unverified claims. The consumer now has a choice to flag this and have a quick resolution through video conference. The key in all legislation is quick implementation on ground. I hope this is something that the government along with the industry bodies will ensure.”

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