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.
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.
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.
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.
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.