Policy

Brand ambassadors may be made liable for misleading ads

AM Jigeesh New Delhi | Updated on January 20, 2018 Published on April 11, 2016

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Parliamentary panel report favours imprisonment, ₹50 lakh fine



Celebrity brand ambassadors may have to think twice before endorsing a product making unrealistic claims. In case the claims are proven to be untrue, they could face a jail term of five years and a fine of ₹50 lakh — if the Centre accepts the report of a Parliamentary Committee on changes in the Consumer Protection Bill.

The report is significant as it comes close on the heels of Indian limited overs cricket captain MS Dhoni facing the wrath of residents of an Amrapali housing project in the National Capital Region. Dhoni was trolled on social networking sites by residents complaining that the complex lacked amenities, as promised by the cricketer in advertisements.

The Parliamentary Committee on Food, Consumer Affairs and Public Distribution, chaired by Telugu Desam Party leader JC Divakar Reddy, unanimously adopted the report on Monday.

The report, accessed by BusinessLine, said consumers tend to blindly believe advertisements promoted by eminent personalities or celebrities. Noting that celebrities honoured with Padma awards are brand ambassadors of several products, the panel said existing laws are not deterrent enough to discourage manufacturers from using celebrities in misleading advertisements.

The committee, therefore, recommended that stringent provisions be made in the Bill to tackle misleading advertisements, as well as to fix liability on endorsers and celebrities.

The penalties

“The committee recommended that for a first-time offence, the offender may be penalised with either a fine of ₹10 lakh and imprisonment up to two years or both; for the second offence, a fine of ₹50 lakh and imprisonment for five years; and subsequent offences, the penalties may be increased proportionally, based on the value of sales volumes of such products or services,” the report said.

The report also said that definitions relating to misleading, false and objectionable advertisements need to have more clarity. It urged the Centre to define the word ‘endorsement’ to avoid any ambiguity.

Food safety violations

Evidently in the light of the recent Maggie noodles controversy, the panel has recommended severe penalties for violation of the Food Safety and Standards Act.

The penalty for first-time violators includes rigorous imprisonment of two years with a fine of ₹10 lakh and suspension of licence for a period of two years.

Second-time offenders may have to serve a five-year jail term with a fine of ₹50 lakh. Their licences should be cancelled forever, the report added.

Published on April 11, 2016
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