CCPA Introduces New Guidelines to Ban Surrogate Advertising  

In the latest development in the advertising space, the Central Consumer Protection Authority (CCPA) under the Department of Consumer Affairs has introduced ‘Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022’. These guidelines aim to curb misleading advertisements and endorsers by putting a complete ban on surrogate advertising effective June 09, 2022. These new guidelines will apply to all advertisements irrespective of the form, format, or platform. 

The Consumer Protection Act, 2019, provides for ‘misleading advertisements’ under Section 2(28).

Section 2(28): “Misleading advertisement” in relation to any product or service means an advertisement that— (i) falsely describes such product or service; or (ii) gives a false guarantee to or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or (iii) conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or (iv) deliberately conceals essential information.

The new guidelines touch upon each sub-section of section 2(28) and provide further definitions to include conditions for non-misleading and valid advertisements, definitions for bait and free-claim advertisements, and the complete ban on surrogate/indirect advertisements.

 

Salient Features  

 

Bait Advertising  

An advertisement in which goods, products or services are offered for sale at a low price to attract consumers. The guidelines lay down that:

  • The ad should not entice consumers to buy the goods or services without a reasonable prospect of selling them at a price offered in the advertisement.
  • There should be an adequate supply of the advertised goods or services to meet the demand created as a result of the advertisement.
  • The advertisement should state that the stock is limited; if the ad is to assess the demand, the same should be stated, and it should not omit restrictions regarding the availability of goods or services.

 

Free Claim Advertisement 

The advertisement should make clear the extent of commitment that a consumer shall make to take advantage of a free offer and should not use the term “free trial” to describe an offer that promises to pay the money back to the consumer in case of non-satisfaction if it requires the consumer to make a non-refundable purchase. Free claims should not be made in the advertisement –

  • If the consumers have to pay anything other than the unavoidable cost of responding to the ad or packing, handling or administration of free goods or services or if the price has been increased (except where such increase results from factors unrelated to the cost of promotion) or when the quality or quantity of goods or services has been reduced;
  • If an element of the package is included in the price, it should not be advertised as free.

 

Advertisements Targeting Children

In addition to taking measures to protect the general public from being misled, the CCPA has also laid down measures to protect the sensitive and impressionable minds of the younger generations.

  • It provides that advertisements that target or address children shall not condone or encourage activities that are dangerous for children or take advantage of their inexperience, and/or encourages practices that are detrimental to children’s wellbeing, etc.;
  • Advertisements should not be such as to develop negative body image in children or give any impression that such goods, product or service is better than the natural or traditional food which children may be consuming.
  • Advertisement for junk foods, including chips, carbonated beverages and such other snacks and drinks, should not be advertised during a program meant for children or on a channel meant exclusively for children.
  • The Guidelines also prohibit advertisers from featuring children and personalities from sports, music or cinema for products requiring  a health warning or for products children cannot purchase

 

Due Diligence Endorsers

The guidelines clearly state that the endorsements should reflect the genuine, reasonably current opinion of the endorser regarding their representation. Such endorsement must be based on adequate information or experience with the goods or services and must not be deceptive. Foreign professionals are barred from making endorsements in all circumstances where Indian professionals are barred.

If a connection between the trader/manufacturer and the endorser exists, such connection should be disclosed if such information is likely to affect the value or credibility of the endorsement and the audience does not reasonably expect the link.

 

Disclaimers 

While laying down provisions for disclaimers in advertisements, the Guidelines state that a disclaimer may expand or clarify the main offer but cannot contradict or hide the material claim made in the advertisement or attempt to correct a misleading claim made in the ad. Further, it provides that a disclaimer should be in the same language and font as the claim made in the advertisement and that the placement of the disclaimer shall be at a prominent and visible place on the packaging (ideally be on the same panel). Also, if the claim is presented as a voiceover, the disclaimer shall be displayed in sync with the voiceover and at the same speed as the original claim made in the advertisement.

Apart from the features mentioned above, the guidelines also stipulate specific duties on the manufacturer, service provider, advertiser, or advertising agency to ensure compliance in advertisements, which primarily deals with the veracity of the information/claims made in the advertisements. These guidelines are to be read as part and parcel of the Consumer Protection Act, 2019, and the non-compliance with the provisions shall also invite penalization as provided in section 21 of the Act.

These guidelines will also apply to government advertisements issued by PSUs engaged in providing consumer services along with those issued by private agencies. Moreover, the advertising guidelines for self-regulation issued by the Advertising Standards Council of India (ASCI) will also apply simultaneously.

 

Conclusion 

In the last few years, the regulatory bodies have undertaken many reformations and measures to control how and what is advertised. As our country is moving towards digitization, the need of the hour is to closely monitor the content that is made available to the public, mainly on online social media platforms. The guidelines intend to protect the interests of consumers by introducing more transparency and coherence in the way advertisements are published so that consumers can make informed decisions.

 

 

You may read our blog post detailing surrogate advertising and its enforceability for a deeper understanding of the issues.  

Image Credits: Photo by Dennis Maliepaard on Unsplash

The guidelines also stipulate specific duties on the manufacturer, service provider, advertiser, or advertising agency to ensure compliance in advertisements, which primarily deals with the veracity of the information/claims made in the advertisements. These guidelines are to be read as part and parcel of the Consumer Protection Act, 2019, and the non-compliance with the provisions shall also invite penalization as provided in Section 21 of the Act.

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Surrogate Advertising In India :Is CBFC Certification mandtory?

  • 17 December, 2020
  • Sripriya Padmanabhan
  • Sidheswar Sahoo

We are all familiar with the quirky and satirical advertisements of ‘Men Will Be Men’ for Seagram’s Imperial Blue Superhits Music CDs. Needless to mention, the brand “Imperial Blue” is in fact a popular brand of Indian whisky, owned by Pernod Ricard and launched in the year 1997. Since Indian law prohibits advertisements that promote, directly or indirectly, the production, sale, or consumption of cigarettes, tobacco products, alcohol in India, these products are advertised through surrogate advertising or brand extension.

Time and again there have been numerous case laws, Court rulings, and Govt. notifications prohibiting/regulating the advertisement of these products in India. ASCI, the self-regulatory body of advertisements in India, has been playing a proactive role in this regard thereby keeping all these ads in check.

Evolution of Surrogate Advertising in India

In India, the Ministry of Information and Broadcasting (I&B), through The Cable Television Networks (Regulation) Act, 1995 (‘Act’) and The Cable Television Networks Rules, 1994 (‘Rules’) as well as other policies and guidelines issued from time to time, has been regulating content on private satellite channels, a network of multi-system operators, and local cable operators (LCOs).

Rule 7 of the Rules prescribes the advertising code which has to be conformed to by cable operators while broadcasting advertisements through their cable service. Rule 7(2) specifically enlists advertisements that cable operators would not be allowed to broadcast. Rule 7(2) prohibits advertisements that “promotes directly or indirectly production, sale or consumption of cigarettes, tobacco products, wine, alcohol, liquor or other intoxicants.”

 A proviso to the above Rule was inserted through an amendment on August 9, 2006 [G.S.R. 469 (E)]1, which permitted advertisements of products that use a brand name or logo, which is also used for cigarettes, tobacco products, wine, alcohol, liquor, or other intoxicants, subject to conditions that (i) the storyboard or visual of the advertisement must depict only the product being advertised and not the prohibited products in any form or manner; (ii) the advertisement must not make any direct or indirect reference to prohibited products; (iii) the advertisement must not contain any nuances or phrases promoting prohibited products; (iv) the advertisement must not use particular colours and layout or presentations associated with prohibited products; (v) the advertisement must not use situations typical for promotion of prohibited products when advertising the other products:

“Provided further that all such advertisement shall be previewed and certified by the Central Board of Film Certification (CBFC) suitable for unrestricted public exhibition prior to telecast or transmission or retransmission.”

 

Timeline of Various Orders by the Government Pertaining to Surrogate Advertising

  • A notification2 issued by the Ministry of I & B on February 27, 2009, had stated that such ads found to be “genuine brand extensions” shall be previewed and certified by the CBFC.
  • Another directive3 that was issued on June 17, 2010, was quite blunt on the rules as it directed all TV channels to stop carrying any ad of a product that even used a brand name or logo used for wine, alcohol and liquor. According to this directive, it looks that even though any other product was being advertised, the ad will be prohibited if it contained the name of an “alcoholic beverage”
  • Recently, the Ministry of I & B on September 15, 2020, issued an advisory4 with a view to curb surrogate advertisements, saying that such ads are to be previewed and certified by the CBFC to ascertain whether they are suitable for unrestricted public exhibition and are in accordance with stipulated This is the latest order by the government in this regard.

Is the Advisory binding in nature?

  • The question which arises here is that whether such “advisories” issued by the Ministry of I & B are binding on the Court in the case of Kritika Padode v. Union of India & Anr.5 had established that an advisory is not a legally binding order. The court had mentioned that they were just “mere advice to the private satellite TV channels”.
  • Also, in the 2019 Allahabad High Court Judgement, Struggle Against Pain v. State of U.P.6 where the main issue pertained to “Surrogate Advertisement”, there was no mention of a CBFC certificate being

ASCI Code

Rule 7 sub-rule (9) was amended7 on August 2, 2006, which made the Advertising Standards Council of India (ASCI) Code compulsory for the regulation of television advertisements. The ASCI is however a self-regulating body for the advertising and primarily has the power to pull up an advertiser for any violations against the advertising code. The Code does not though explicitly mention the requirement of a CBFC certificate to advertise something “surrogate”.

The ASCI8 has provided guidelines for the qualification of brand extensions, which are:

  1. The product or service should be registered with an appropriate government authority eg Central Value Added Tax (CENVAT)/ Value Added Tax (VAT)/ Food and Drug Administration (FDA)/ Food and Safety Standards Authority of India (FSSAI)/ Trade Marks Registry (TM).
  2. The availability of the surrogate product in the market must be at least 10% of the leading brand’s market share as measured in metro cities where the product is being
  3. The sales turnover of the product or service should exceed Rs 5 crore per annum pan-India or Rs 1 crore per annum per state where the distribution has been
  4. A valid certificate must have been obtained from an independent organisation such as AC Nielsen or a category-specific industry association before

This has yet again been notified in a Press Release recently issued by ASCI on November 2, 20208. The Press Release reiterated that advertisements for brand extensions could not feature anything prohibited by law or that pertained to banned products nor could it refer to or hint at such products. The Press Release was issued to keep a check on advertisements that were being broadcasted during the IPL. Further, the IPL broadcaster also confirmed that all advertisements were checked for CBFC clearance so that they are not in violation of the Act.

 

The ASCI further sought responses from advertisers, within 7 days, to validate their claims of their product or service being a genuine brand extension, which included sales, distribution, and market share data certified by an independent body. The advertisement was to be allowed to continue only if it met the criteria for a genuine extension. However, if no response was received, then order would be passed ex-parte.

ASCI Rulings 

The Consumer Complaints Council (CCC) set up by ASCI handles complaints pertaining to advertisements that come before the ASCI. On perusing complaints for the year 2019-2020, there were 12 rulings related to surrogate advertising and brand extensions. Based on the cases, it may be inferred that ASCI places emphasis on adherence to its Guidelines for Qualification of Brand Extension Product or Service.

Consumer Protection Act, Rules & Guidelines

The draft Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Guidelines, 2020, was issued in August 2020, by the Central Consumer Protection Authority (CCPA) in the exercise of the powers conferred by clauses (c) and (d) of sub-section (1) of section 18, read with clause (l) of sub-section

(2) of section 18 of the Consumer Protection Act, 2019 (Act 35 of 2019) (CPA).

The draft guidelines have been framed for the prevention of false or misleading advertisements as well as due diligence to be carried out for endorsements. Hence, the scope of the guidelines pertains to all advertising/ marketing communications regardless of form, format, or medium and apply to manufacturers/service providers whose products/services are the subject of the advertising/marketing communications, as well as to advertisement agency and endorser (wherever applicable) of the product/service9.

The draft guidelines under Rule 8 have also included Surrogate Advertising. Further, the guidelines state that the provisions of the CPA would apply for any violations of the provisions of the guidelines. Hence, we can gather that should there be any contraventions to the guidelines once it is notified, the CPA would have the power to impose penalties on the manufacturers or endorsers.

Conclusion

It may be noted from the Cable TV Act & Rules that the amendment was made to permit surrogate advertisements for genuine brand extensions, but solely with such advertisements being compliant with the requirements provided therein and in the ASCI Code. Hence, one such prerequisite is that the advertiser needs to obtain a certificate from the Central Board of Film Certification (CBFC) for such advertisements to be allowed on the cable service. This has again been reiterated in several notifications issued by the Ministry of I & B and ASCI.

From the above rulings and the press release, it can be gathered that ASCI has come down heavily on advertisements for even the slightest of references to banned products (such as alcohol and the like) in their surrogate advertisements. Hence, adhering to such requirements provided in the Rules, Code and other related guidelines/notifications issued from time to time may be the way to ensure that such advertisements are displayed to the public. The ASCI being a self-regulatory body has no powers to penalize the advertisers and may only have them modify or remove their advertisements should they not comply with their Code. However, under the draft guidelines issued by CCPA, which has defined surrogate advertisements, directions could be issued, and penalties could be imposed against false or misleading advertisements by manufacturers/endorsers. Based on this, we would have to wait and watch on how both bodies would work together or if the powers of the ASCI for false and misleading advertisements would decrease.

References

1 https://mib.gov.in/sites/default/files/cab2.pdf

2 https://mib.gov.in/sites/default/files/cab4.pdf

3 http://www.rctfi.org/notification/directive.pdf

4https://mib.gov.in/sites/default/files/ADVISORY%20ON%20SURROGATE%20ADVERTISEMENTS.pdf

5 2016 SCC OnLine Del 4360

62019 SCC OnLine All 4624

7 https://www.ibfindia.com/sites/default/files/cab1.pdf

8 https://www.ascionline.org/images/pdf/pr_surrogate_advertising_2nd_november_2020.pdf

9https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/Draft%20guidelines%20for%20stakeholders%20consultation.pdf

 

 

Image Credits: Photo by Mohammad Shahhosseini on Unsplash  

From the above rulings and the press release, it can be gathered that ASCI has come down heavily on advertisements for even the slightest of references to banned products (such as alcohol and the like) in their surrogate advertisements. Hence, adhering to such requirements provided in the Rules, Code and other related guidelines/notifications issued from time to time may be the way to ensure that such advertisements are displayed to the public.

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