Consumer Protection Bill 2018: Will Parliament pass it this time?
Within the ambit of the Bill, a manufacturer can be fined Rs. 10 for the first offence of mis-claims and misleading advertising and in case of a subsequent offence, the fine may extend to Rs. 50 lakh. The manufacturer can also be punished with imprisonment of up to two years which may extend to five years for every subsequent offence
Pressure is mounting on the powers that be, to pass the long-pending Consumer Protection Bill 2018. Minister for Consumer Affairs, Ram Vilas Paswan, introduced the Bill in the Lok Sabha on Monday. The Confederation of All India Traders (CAIT) in a letter has urged Paswan to prioritise the Bill and said that it must be passed in the current session of Parliament.
This Bill will give the Central Consumer Protection Authority the leverage to impose a penalty on a manufacturer or an endorser for a false or misleading advertisement. The trader's body noted that "It is imperative that liability should be cast upon brand ambassadors under the Consumer Protection Act."
The Bill, which holds consumer rights as sacrosanct, aims to make endorsers take responsibility for being in a position that allows them to influence the choices consumers make. The question that the advertising fraternity asking now is: When manufacturing process do not follow the basic norms and the manufacturers can hoodwink the government to get clearances, how can celebrities verify the claims of the advertiser?
This Bill cannot be independent of checks and clearances that government bodies give to manufacturers, said Meera Iyer, Head Marketing, Big Basket. "The onus is on the government to give licenses and do checks to ensure compliance. It's fair to ask advertisers to put verifiable claims. But then it's equally incumbent on the government to provide for processes and records that allow one to check on the same," she said.
Putting the onus on endorsers will have the natural outcome of them making their contracts bulletproof. In the existing set up, brands need to have legal clearances to put claims on the packaging and ads for products. Iyer suggested that celebrities should ideally demand these clearance files if they will endorse such claims.
Iyer suggests this is in addition to the brands already guaranteeing in contracts that it is not making any false claims in the advertisement. "If a brand lies following a legally binding contract, the celebrity is the victim of fraud, not the perpetrator of fraud," noted Anirban Das Blah, Director - Kwan Entertainment and Marketing Solutions. He further added, "It is the manufacturers themselves and the regulatory authorities that are responsible, you cannot pass the buck."
While the intention of the Bill is well appreciated by the fraternity, the extent of responsibility on the brand ambassador is being debated. Brand ambassadors range from the Airtel Girl, who was initially just a model but became a celebrity over time, to Bollywood actors and sports stars. Because there are different kinds of endorsers, "The Bill cannot apply one rule to all," pointed out N Chandramouli, brand guru and CEO, TRA. "The endorsers who completely stake their reputation for the brand should have countermeasures against the brand in case of mis-claims," he said.
Chandramouli further added that it would be impossible for endorsers to independently verify claims but if facts are misrepresented, the entire legal onus should be on the brand. Noting that brands and endorsers need to be very careful, he said, "It can no more be a matter of mutual trust."
The broad definition of misleading advertisement could have far-reaching implications. "Advertising of the kind where brands claim that doctors recommend a particular toothpaste, could also be penalised for misrepresentation. Surrogate ads for alcohol brands could also face the axe," pointed out Chandramouli. "Misleading ads seem like an easy thing to penalise, but have you solved the problem?" asked Chandramouli.
Within the ambit of the Bill, a manufacturer can be fined Rs. 10 for the first offence and in case of a subsequent offence, the fine may extend to Rs. 50 lakh. The manufacturer can also be punished with imprisonment of up to two years which may extend to five years for every subsequent offence.
The CCPA can also prohibit the endorser of a misleading advertisement from endorsing that particular product or service for a period of up to one year. For every subsequent offence, the period of prohibition may extend to three years.
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