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.
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