Consumer Protection Authority’s Collaboration With Advertising Council To Harmonize Advertising Laws




On March 26, 2024, the Department of Consumer Affairs (DCA), and the Advertising Standards Council of India (ASCI) released a joint press release with the shared mission under the ASCI and the Central Consumer Protection Authority (CCPA) to work in close partnership to safeguard consumers against misleading advertising practices. The CCPA has formally requested ASCI to identify any advertisements that violate ASCI’s Code and could potentially violate the Consumer Protection Act. These flagged ads will be forwarded to the CCPA for appropriate action as laid out by the Act. This collaboration ensures swift and effective handling of any misleading advertising concerns raised by ASCI under the Consumer Protection Act.

What does the ASCI do?

Founded in 1985, the ASCI champions ethical advertising practices through self-regulation, safeguarding consumer interests. It aims to set the gold standard in India for honest, truthful, legal, and appropriate advertising that minimizes harm and fosters fair competition. Their reach extends across all media – print, TV, radio, billboards, SMS, email, online ads, packaging, brochures, promotional materials, and point-of-sale displays. ASCI fosters collaboration with various government bodies, including the DCA, FSSAI, the Ministry of AYUSH, and the Ministry of Information and Broadcasting (MIB). Significantly, ASCI’s Code for Self-Regulation of Advertising Content in India and its guidelines closely align with areas covered by CCPA regulations. This includes misleading ads, deceptive design elements (“dark patterns”), influencer marketing, educational institutions, and unsubstantiated environmental claims (“greenwashing”).

What Are The Penalties Provided Under The ASCI Code?

The ASCI Code places a high value on integrity and accuracy in advertising. Section 1(1) emphasizes the importance of backed-up claims, necessitating tangible evidence such as reports verifying product ingredients, for example, in the case of “100% vegan” cosmetics. Section 1(4) advises against hyperbole, although the ASCI guidelines permit the use of disclaimers for additional clarification, provided they do not contradict the primary message. Regarding celebrity endorsements (outlined on page 37), authenticity and sufficient product knowledge are emphasized. Guideline (d) stresses the need for celebrities to conduct thorough research to ensure that the brand’s assertions, such as claims of “sustainability,” can be objectively substantiated to prevent misleading consumers. Chapter I of the ASCI Code, which covers general principles of advertising, addresses violations that may require withdrawal or modification of the advertisement. Chapter II of the ASCI Code deals with specific areas of advertising, and violations may lead to public censure. Chapter III of the ASCI Code delineates procedures for handling complaints, which may involve referral to regulatory authorities for further action if violations warrant it.

What does the CCPA do?

Under Section 10 of the Consumer Protection Act, 2019, the regulatory and statutory body CCPA was formed with the primary objective of safeguarding the rights of consumers in India. This authority serves as a pivotal entity in ensuring consumer protection by regulating unfair trade practices, misleading advertisements, and any other activities detrimental to consumers’ interests. Furthermore, the CCPA has the authority to issue directions to businesses to cease unfair practices, impose penalties for non-compliance, and even initiate prosecution proceedings against offenders. This gives the authority teeth to enforce consumer protection laws effectively and deter unscrupulous businesses from exploiting consumers.

Penalties Provided Under The Consumer Protection Act, 2019 for False Advertising

Under Section 21 of the Consumer Protection Act 2019 and the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022, endorsers doing illegal advertisements without due diligence may face penalties such as fines of up to Rs 10 lakh (which may extend up to Rs 50 lakh for subsequent violations) or prohibition from making endorsements for a period of up to one year (three years for subsequent violations. Section 36 of the 2019 Act empowers the Consumer Protection Authority to direct businesses engaged in false advertising to compensate affected consumers for any loss or injury suffered due to deceptive advertisements. Section authorizes the Consumer Protection Authority to issue prohibition orders against businesses involved in false advertising, prohibiting them from continuing the deceptive practices. Section 75 permits the Consumer Protection Authority to publish adverse findings against businesses found guilty of false advertising, thereby informing consumers and deterring others from similar misconduct.

Future Benefits Of This Partnership

Recent collaborative discussions between DoCA and ASCI have addressed various advertising topics, including Influencer Guidelines, Greenwashing, Dark Patterns, and Surrogate Advertising. These initiatives promote enhanced communication and alignment among industry stakeholders, civil society, and regulators. Mirroring the partnership between DoCA and ASCI, advertising self-regulators worldwide engage with governments through various co-regulation models. Given the escalating complexity of modern advertising and the emergence of challenges like disguised advertising, deepfakes, and scams in today’s borderless online environment, such collaborations are indispensable for effective advertising regulation. The partnership between CCPA and ASCI is likely to result in more robust enforcement of advertising regulations in India. One of the primary objectives of the collaboration is likely to be the protection of consumer rights. As part of their collaboration, CCPA and ASCI will likely review and revise existing advertising guidelines to better address emerging challenges and trends in the advertising landscape. Thus, this partnership could lead to updates in advertising standards to ensure they remain relevant and effective. The partnership between CCPA and ASCI may facilitate cross-sector collaboration between government agencies, industry associations, and consumer advocacy groups. The collaboration between CCPA and ASCI could enhance India’s reputation in the global advertising industry and may attract increased investment and participation from international advertisers.

Author: Muskkaan Verma & Bhumika Sharma




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