INTRODUCTION
In recent times, the advertisement industry has got quite advanced and has come up with more innovative ideas to attract consumers through their enticing advertisements, and brand ambassadors or endorsers play a key role in product advertising. But at times, the advertisement proves to be misleading. The endorsers making claims without ascertaining facts about the product (which they are endorsing) mislead the consumers to purchase that product because it was being endorsed by a particular person (they admired or trusted). To keep a check on such practices and to make the endorsers more responsible, they are also being made liable for misleading advertisements (endorsed by them). In this article, we will discuss the legal provisions that hold the endorsers accountable and few case laws to make our understanding better.
BRAND AMBASSADOR (OR ENDORSERS) AND THEIR ROLE IN MARKETING
An Endorser is usually a celebrity or an individual who is recognized by the public in general and is hired by the companies to endorse and enhance the brand value of their product. This gives a great deal of recognition and attention to the brand. The fame and popularity of the ambassador/endorser are used in such a way that it influences the opinions of the consumer. The reputation and credibility of the Endorser are often seen attached with the brand or the product being endorsed, and people tend to purchase or prefer a product to which a particular ambassador’s name is associated. Thus, we can conclude by saying that an endorser’s role is significant in product advertising.
LEGAL PROVISIONS
Now, as you have already got a brief idea of what a brand ambassador or an endorser is (though a clear-cut definition of Endorser or brand ambassador is not given in any of the consumer protection acts) and what is their role in the marketing and advertising of a product, let’s look at what the Consumer Protection Act (an act made to safeguard the interests of the consumers) has to say about the liability and accountability of an endorser/brand ambassador towards the consumers (defined under Sec 2(7) of CPA 2019), in case of a consumer dispute (defined under Sec 2(8) of CPA 2019 ) related to the misleading advertisement.
Advertisement is defined as any audio or visual representation[1], under Sec. 2(1) of the Consumer Protection Act, 2019.
Misleading advertisement is defined under Sec. 2 (28) of CPA 2019 as an advertisement which:[2]
- falsely describes any product or service; or
- gives a false guarantee to, or is likely to mislead the consumers concerning nature/substance/quantity/quality of product or service; or
- conveys any representation by the manufacturer or seller or service provider that constitutes an unfair trade practice; or
- deliberately conceals essential information;
The first Consumer Protection Act, which was formed in 1986, did not have any expressed provisions dealing with the accountability of the endorsers. But the recently formed Consumer Protection Act of 2019 has made sure that even the endorsers (if found guilty) are held liable for unfair trade practices (defined under Sec 2(47) of CPA 2019), which includes misleading advertisements.
Sec 21 of CPA 2019 deals with the accountability and liability of the endorsers. It expressly says that:[3]
- Suppose the court or the authority (post inspection) finds that the claims made in an advertisement are not true or misguiding and that is not in the favour or as perceived by any consumer. In that case, the authority can ask the Endorser to stop such misleading commercials or to rectify them as per the order within a stipulated period.
- It further says that if the authority deems necessary, it can also levy a penalty of up to ten lakh rupees (which can further be extended to fifty lakhs).
- The authority can also restrict or ban an Endorser for a stipulated period which can extend to one year if found that the advertisement is a false or misleading advertisement. And if found that the Endorser is indulging in such practices again, then the authority can extend the prohibition period, which can go up to 3 years.
Now, this was all about the liability of endorsers under CPA 2019; let’s now look at what defences are provided to the endorsers under the act. Sec 21 (5) says that no endorser will be held liable to a penalty if they have taken care and exercised due diligence to verify the truthfulness of the claims made by the advertisement regarding a product/service which they will be endorsing.[4]
But the problem in this section is that it does not give any guidelines, as in what measures taken up by the endorsers will amount to exercising due diligence. This issue should be addressed, or it will lead to implementation problems. In the case of Cooga Mooga, Inc. v. Charles E. Boone, the FTC ruled that a celebrity can hire an independent agency to check the veracity of the claims if the Endorser is unable to do so on its own.[5] But whether this rule will be applied in India or not is not clear and is subject to further analysis and discussion.
CASE LAWS
Now let’s see some cases wherein the endorsers were held liable to understand the concept in a better way. In a case before the Muzaffarnagar Consumer Court, actors Govinda and Jackie Shroff were fined ₹20,000 for endorsing an herbal oil that claimed guaranteed pain relief in 15 days or else a complete refund.
The complainant alleged that the actor’s endorsement made him trust the product, but the product showed no effect, and when the company was approached for the refund, they failed and allegedly harassed Mr Aggarwal (consumer) when he contacted again. The court decided the case in favour of Mr Aggarwal as the product was sold through misleading advertisement and promotion.[6]
In a similar case of misleading advertisement, a consumer court in Kerala held the brand ambassador liable for making false claims while endorsing a hair care product without ascertaining the effectiveness of the product. The court ordered manufacturers of Dhathri Hair Cream and their brand ambassador Anoop Menon who endorsed the hair care product, to pay a fine of ₹ 10,000 for making false promises and selling their product by misleading advertisement.[7]
There was another case in which superstar Shah Rukh Khan was directed by the Calcutta High Court to elaborate his partnership along with the Indian Institute of Planning and Management (IIPM) when a complaint was registered by a group of students who claimed that they were misled by his promotion and endorsement of IIPM.[8]
Another such instance of endorsers being held responsible was during the Maggi controversy, where various famous actors/actresses like Amitabh Bachchan, Madhuri Dixit, and Preity Zinta have had an FIR registered against them for endorsing Maggi instant noodles in allegedly ‘misleading’ advertisements.[9]
CONCLUSION
At this juncture, it is imperative to reiterate the paramount importance of Endorser’s liability which initially did not have any mention in the Consumer Protection Act, per se. The current consumer protection bill of 2019 has been the first in line to address the notion of an Endorser’s liability when compared to the pre-existent legislation in this facet. Where this provides us with a ray of light in the tunnel, there is an attached contrary constant to it as well. For instance, this bill fails to facilitate the readers with an articulate definition of who an endorser is, coupled with ambiguity as to the regimen applicability of penal provisions to commercial and pro-bono advertisements. Additionally, the bill validates the necessity for an endorser to exercise due diligence in their course of duty. However, it fails to assign a specific test for the same.
Conclusively, whilst keeping in mind the pros and cons of the bill, it remains undeniable to state that the bill is a milestone towards amplifying and providing an impetus to the interest of the consumers and alleviating the issues concerned thereof. The path may be tiresome, but the journey has begun, and over time, there shall be more breakthroughs in the same.
Authors Name:
Satyam Shivam (Student, Dr. Ram Manohar Lohiya National Law University, Lucknow)
Shambhavi (Student, Maharashtra National Law University, Mumbai)
References:
[1]Saket Agarwal, “Liability of the Endorser of a Brand in Light of the Consumer Protection BILL, 2019” (The RMLNLU Law Review Blog September 2019) <https://rmlnlulawreview.com/2019/09/22/liability-of-the-endorser-of-a-brand-in-light-of-the-consumer-protection-bill-2019/> accessed 2021.
[2] Ministry of Law and Justice (Legislative Department), “The Consumer Protection Act, 2019” (Digital file – PDF2019) <https://egazette.nic.in/WriteReadData/2019/210422.pdf> accessed 2021.
[3] Ibid.
[4]Ministry of Law and Justice (Legislative Department), “The Consumer Protection Act, 2019” (Digital file – PDF2019) <https://egazette.nic.in/WriteReadData/2019/210422.pdf> accessed 2021.
[5]Saket Agarwal, “Liability of the Endorser of a Brand in Light of the Consumer Protection BILL, 2019” (The RMLNLU Law Review Blog September 2019) <https://rmlnlulawreview.com/2019/09/22/liability-of-the-endorser-of-a-brand-in-light-of-the-consumer-protection-bill-2019/> accessed 2021.
[6] Service I-AN, “Actors Govinda, Jackie Shroff Fined Rs 20,000 over Oil Endorsement” (NDTV.com November 24, 2019) <https://www.ndtv.com/india-news/actors-govinda-jackie-shroff-fined-rs-20-000-over-oil-endorsement-2137852> accessed 2021.
[7] Network LN, “No Hair Growth as Promised in Advertisement: Consumer COURT PENALIZES Brand Ambassador for False Claim” (Live Law January 4, 2021) <https://www.livelaw.in/news-updates/consumer-court-false-advertisement-penalizes-brand-ambassador-celebrity-endorsement-167929> accessed 2021.
[8] Joseph V and others, “Advertisers and ENDORSERS under the Consumer Protection ACT, 2019” (Responsive Slide Menus2020) <https://www.argus-p.com/papers-publications/thought-paper/advertisers-and-endorsers-under-the-consumer-protection-act-2019/#:~:text=There%20is%20no%20distinction%20between,persona%20in%20real%20life%3B%20or> accessed 2021
[9]Ibid.
