Introduction

In the 21^st Century, where technology sweeps every market aspect. Celebrities, influencers, and endorsers now have more sway over what people purchase because of social media and digital platforms such as Instagram, Twitter, Facebook, Television Advertisements, etc. It may include cricket legends like MS Dhoni, Virat Kohli or Bollywood icons like Amitabh Bachchan, Shah Rukh Khan, etc. Their endorsements act as one of the most powerful tools to influence the choice of consumers. Such power also comes with responsibility, which makes them responsible for any product promoted or endorsed by them if it is found to be false, deceptive, or misleading.

According to the Duff and Phelps Celebrity Brand Valuation Report (2018)[1], a 10% Compounded Annual Growth Rate (CAGR) in celebrity endorsements is shown, with the top 20 Indian celebrities’ total brand value increasing 13% to $877 million in 2018.

In view of this significant influence, regulatory agencies throughout the world have been examining misleading advertising techniques more carefully in an effort to guarantee advertising’s authenticity and transparency. Nonetheless, misleading advertising is not a recent problem. Advertisements have been manipulating facts or presenting misleading information to persuade consumers for years in both traditional and digital media.

Legal Frameworks Governing Endorsements In India

Although to date, no particular act or a comprehensive law on regulating the misleading and false ads exists. However, there are certain provisions and guidelines enshrined in some of the legal frameworks which prohibit or punish such activities. It will include the following:

1. Consumer Protection Act, 2019 (COPRA)

Section 21 of this Act[2], imposes penalties on the manufacturers, advertisers, and endorsers of any misleading advertisement. For the purposes of this section, the Central Consumer Protection Authority (CCPA) is authorised to impose a fine of up to 10,00,000 INR for the first-time offence & up to 50,00,000 INR for repeated offence. It can also ban such endorsers for up to 1 year for the first time offence and up to 3 years for a repeated offence[3].

• Drug and Magic Remedies (Objectionable Advertisements) Act, 1954

This Act forbids the advertisements of Magical Remedies or drugs that claim to cure diseases like diabetes, sexual disorders, cancer, etc. Section 7 of this act[4] defines the penalties for the endorsers of such advertisements; in case of a first conviction, punishment will be up to 6 months of imprisonment, or a fine, or both; subsequent convictions will be punishable with imprisonment up to 1 year, or with a fine, or with both.

• ASCI Guidelines

ASCI stands for Advertising Standards Council of India; it works under the Department of Consumer Affairs. It is a regulatory body that oversees and resolves complaints related to misleading advertisements. In the execution of its powers, ASCI recently released Guidelines for Celebrities and Influencers (2023)[5], these guidelines mandated that celebrities and influencers avoid vague, impossible, exaggerated claims; to conduct proper due diligence; and also mandate the disclosure of material connections in social media advertisements, etc. To read these guidelines, click here.

• Bharatiya Nyaya Sanhita, 2023

In exceptional circumstances where any serious harm is suffered by the consumer because of any endorsement, the provisions like Cheating u/s 318 [6] and Criminal Conspiracy u/s 61 of BNS, 2023 [7] can also be invoked.

It will also include various other laws such as the Food Safety and Standards Act, 2006, the Cable Television Network Rules, 1994, the Drug and Cosmetic Rules, 1945, and various other rules and regulations with regard to such misleading advertisements.

Cases in the History of Misleading Advertisements

In the case of the Indian Medical Association & Anr. vs. Union of India & Ors.[8], The Apex Court ordered the removal of misleading advertising by Patanjali Ayurved Limited, a business that allegedly made unsubstantiated claims about its goods, including allopathic treatment. The Drugs and Magic Remedies (Objectionable Advertisement) Act of 1954 and the Consumer Protection Act of 2019 were allegedly broken by these ads, according to the IMA. In addition to compelling Union Ministries and agencies to take action against fast-moving consumer goods businesses engaged in misleading and dishonest advertising activities, the Court summoned Baba Ramdev and Acharya Balkrishna, the managing director of Patanjali, in contempt proceedings.

In order to protect consumers from misleading ads, the Supreme Court also issued orders that require broadcasters and print media entities to submit a self-declaration form prior to airing or printing advertisements, establish a complaint procedure for consumers, and direct the Ministry of Consumer Affairs, Food, and Public Distribution to submit a new affidavit regarding the CCPA’s actions regarding deceptive or false advertisements. In addition to ensuring that celebrities, advertisers, endorsers, and social media influencers are held responsible for promoting goods or services in deceptive marketing, the ruling seeks to advance consumer welfare.

The famous Maggi Controversy[9] , where in 2015, Maggi Noodles made by Nestle were banned because of excessive levels of lead and MSG (Monosodium Glutamate) found after the tests. The celebrities, including Amitabh Bachchan, Preity Zinta, and Madhuri Dixit, who endorsed Maggi, issued legal notices from the Food and Drug Administration and in pursuance of the same, FIRs were also filed under the BNS (earlier IPC) and COPRA in Bihar; Irrespective of the fact that later the charges were dropped and the complaints was dismissed this incident considered as a turning point in the history of endorser accountability.

The Royal Challengers Sports Drink controversy[10], where in 2020, ASCI registered eight cases against some liquor brands, which are alleged to have pursued surrogate advertisements to promote their liquor during the Indian Premier League games. An Indian Cricketer, Virat Kohli, was also criticised for promoting Royal Challenge Sports Drink, a surrogate ad targeted to promote liquor. Later, ASCI banned that ad and also ruled that it violated the brand extension norms, and such a drink, which is shown in the ad, also does not exist. Some examples of Surrogate Advertisements can be depicted from the pictures given below.

Suggestions For Celebrities & Influencers

In India, advertising ethics stipulate that celebrities must follow laws and regulations related to products they endorse. They ensure that every piece of information in the advertisement is true, and advertising claims are able to withstand scrutiny. This means that they have to ensure that the statements given, before talking about the product, are true. Celebrities are also not supposed to promote dangerous products like gambling, tobacco, or counterfeit drugs. In order to ensure that the advertisement is accurate, they must also have evidence that they can refer to in case there are any questions or challenges.

Some products promote negative self-image, self-neglect, or deception from an ethical standpoint, and self-promotional advertisements should be avoided. These include alcohol and tobacco products, skin lotions, creams, and unsubstantiated health aids.. Good advertisements should prioritise the world’s and people’s health before their own financial gain.

There could possibly be serious consequences if these duties are not followed. When celebrities violate advertising regulations, they risk fines and lost opportunities. In addition, they may not be able to make further deals and lose prospective with the distraction of public trust and consumer confidence due to bad publicity. Public opinion has a great say on the stature of celebrities. Celebrities have a significant influence on public opinion. Therefore, their actions have consequences beyond just financial gain.

Conclusion

In a nutshell, with the changes taking place in the Indian advertising system and Brand Endorsement Laws, the responsibility on celebrities has certainly increased. They are no longer merely endorsers – they are now considered as trust marks for brands. To properly manage such a situation, celebrities should take some proper steps, such as claim verification through legal and scientific professionals, documenting due diligence, and forbidding endorsement contracts posing ethical or legal conflicts.

Engagements of the CCPA, ASCI, FSSAI and others need to extend their control and surveillance and policing powers, and enforce punitive action sooner and work in tandem to set out a framework for punitive action on breaches. Public information and sensitisation programs directed at celebrities and influencers, as well as the general public, can enhance the level of compliance. In the end, celebrities using their influence to market products should consider the product’s popularity, feasibility and public interest. With the new intertwining of law, pop culture and society, smart advocacy by celebs will help shield buyers from risks while promoting trust in brands and their endorsers.

References:

1. https://www.kroll.com/en/insights/publications/valuation/celebrity-brand-valuation-report-2018
2. Section 21, The Consumer Protection Act, 2019.
3. https://www.azbpartners.com/bank/celebrity-endorsements-and-liability-under-the-consumer-protection-act-2019/
4. Section 7, The Consumer Protection Act, 2019.
5. https://www.ascionline.in/wp-content/uploads/2023/08/guidelines-for-celebrities-in-advertising.pdf
6. Section 318, The Bharatiya Nyaya Sanhita, 2023.
7.  Section 61, The Bharatiya Nyaya Sanhita, 2023.
8. Indian Medical Association vs. Union of India [(2024) 6 SCR 375], Writ Petition (Civil) No. 645 of 2022.
9. https://timesofindia.indiatimes.com/entertainment/hindi/bollywood/news/amitabh-bachchan-clarifies-that-he-had-stopped-endorsing-maggi-two-years-ago/articleshow/47527636.cms
10. https://www.newindianexpress.com/business/2018/May/26/surrogate-ads-or-wilful-hoodwinking-1819892.html & https://www.tribuneindia.com/news/business/asci-gets-cracking-on-surrogate-advertising-by-liquor-brands-in-ipl-sends-notices-to-8-brands-164958/