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Celebrities Endorsement Re-look at Consumer Protection Law

It is presumed that ‘consumer is the king’ and that consumer plays a vital role in the economic system of any nation and that consumer is the key player in the market. Whereas, the ground reality is quite reverse as the consumption patterns of the market are greatly influenced by celebrity endorsements and not by the consumers.

The consumer who is outwardly referred to be a ‘king’ is, in fact, a ‘captive’ or a ‘victim’ of market malpractices. Manufacturers and service providers have only one motto: extract the maximum profit through advertising by engaging in all sorts of deleterious practices and producing products that do not meet the required quality standards.

Advertisement concept in India is not new but earlier advertising used to be a form of communication and education to draw the attention of consumers about the specifications of a product, such as its price, features, availability, sources, company name and its ingredients but today with the advent of celebrity endorsement trend, the claims are as spurious as the product itself. Manufacturers and service providers are spending huge amount of budgets by engaging advertisement agencies and celebrities for endorsement of their products and services.

These celebrities induce consumers by way of unsubstantiated claims against the interests of the consumers. They lure consumers in many ways, be it health, drinks, food products, medicines or education. They sell their dreams through audio-visual and print media in the most persuasive manner. Such attempts create a desire in the mind of a consumer to purchase an item which was otherwise not his actual demand. There are several laws and agencies to deal with consumer protection but the same are not found effective.

However, to avert this nightmarish scenario, the Ministry of Consumer Affairs, Food and Public Distribution, Government of India, on August 10, 2015, introduced The Consumer Protection Bill, 2015 which was to replace The Consumer Protection Act, 1986. The original Act has already been amended in 1991, 1993 and 2002. Whereas, now a fresh draft of the Consumer Protection Bill, prepared by the Legislative Department of the Law Ministry on recommendation of the Parliamentary Committee report on The Consumer Protection Bill, 2015,  has come out with stringent provisions pertaining to misleading claims of the celebrities endorsing consumer goods and services. So the so-called celebrities may face a risk of being jailed for misleading claims if the new Consumer Protection law is cleared in its present form.

This issue had cropped up last year when Maggi noodles were temporarily banned after the food regulator revealed that it contained excessive lead. Its celebrity endorsers included many film actors including Amitabh Bachchan. Similarly, Indian cricket captain M.S. Dhoni was found guilty of misleading advertisements for Amrapali estate developers, after the disgruntled apartment buyers raised hue and cry on social media.

The draft Bill also provides for a powerful new tool called as ‘class action suits’. A class action is a type of law suit where one of the parties is a group of people who can be represented collectively by one member of that group. The concept originated in the United States but was subsequently adopted in several other countries to enable consumer organizations to bring claims on behalf of the consumers. This way an entire batch of faulty products can be recalled just by a single complaint. In India there have been many instances of mass product recalls such as that of faulty cars, but the same was voluntary.

The fresh draft Bill, 2016, makes no distinction between manufacturers, service providers and celebrities when it comes to punishment for misleading advertisements. The official amendment to the Bill initially introduced in the Lok Sabha on August 10, 2015, reads as:         “Whoever makes an endorsement which is false or misleading and prejudicial to the interest of any consumer shall be punishable with imprisonment for a term which may extend to two years and with fine which may extend to ten lakh rupees; and for the second and subsequent offences, be punishable with imprisonment for a term which may extend to five years and fine which may extend to fifty lakh rupees.”

However, the Consumer Affairs Ministry, after recommendation by a Parliamentary Committee, pushed for the jail term without leaving option to punish a celebrity only with fine, though generally the penal law provides for imprisonment or fine or both as punishment. The same punishment is provided for any manufacturer or service provider “who causes a false or misleading advertisement to be made, which is prejudicial to the interest of any consumer”.

The draft Bill was subsequently referred for vetting by an inter-ministerial penel headed by the Finance Minister Arun Jaitley along with Transport Minister Nitin Gadkari; Consumer Affairs Minister Ram Vilas Paswan; Law Minister Ravi Shankar Prasad; Health Minister J.P. Nadda; Power Minister Piyush Goyal and Commerce Minister Nirmala Sitharaman. There are indications that during the informal meeting of the ministers on August 29, 2016, the consensus that emerged was that jail term should not be prescribed for celebrities who endorse brands in misleading advertisements; rather there should only be exemplary monetary penalty. A penalty of more than rupees one crore was cited as exemplary during the meeting.


Reacting to this version, Colonel Sanjeev Kaul observed that this is only an ‘escape route’ for protecting the powerful endorsers. The fine of rupees 50 lakh or one crore is just a peanut for these wealthy celebrities who draw crores of rupees through endorsements. Col. Kaul predicted that in times to come, we will see these so-called celebrities have the last laugh as it is a powerful lobby hand-in-glove with politicians.

Agreeing to Col Kaul’s views, Dr. Khan Noor Ephroz, a professor of law said, “There are yet other escape clauses in the draft Bill. Say, for example, the proviso to Section 75-B, which allows a celebrity to escape liability by proving that he/she had taken reasonable precautions and exercised all due diligence before endorsing the product or service. In addition, there is yet another point to protect the celebrities against complaints by consumers, i.e, the Court can take cognizance of an offence under the law only on a complaint in writing by a Consumer Protection Authority. As such, the proposed law may prove to be a flop show.”

Dr. Khan Noor Ephroz described the entire advertisement business as mostly misleading, a curse for the gullible consumer. The opportunist group consisting of manufacturer, advertiser and endorser have been ‘gaining wrongfully’ and the poor consumer has been ‘losing wrongfully’. The advertisers and endorsers claim to increase the height of a person; whereas, the height increases to a certain age governed under the law of nature. In addition to the above, there are genetic factors. How can a certain medicine or technique increase the height of a man living in hilly area to a height equivalent to a man living in plains? Similarly, how can a child of black parents become a white-skinned child by applying a face cream? Imagine a film actress in a TV show applying a face cream and describing the cream as the secret of her beauty; whereas she is beautiful by birth and not after applying the cream. The cream at the most might provide a glow on her face.

Agreeing to Col Kaul and Dr. Khan, noted advocate O.P. Saxena, President of All India Lawyers Forum for Civil Liberties, said that the advertisement business as of today has become a torturous game of exploitation being played with harmless consumers. “We are no longer bothered for our rights and duties. We silently bear the brunt of the hefty cost incurred on advertisements and celebrities; whereas, the manufacturer is exempted from taxes on advertisements. We have become immune to cruelty caused by advertisers and do not raise a voice to stop this curse.”

He further said, “Today there is a great need to bring in a law to emancipate the consumers from the bonds of false endorsements. As a matter of fact, the recommendation of the ‘Parliamentary Committee’ for fixing-up the responsibility was a well-thought after process which had noted that the consumers tend to believe such advertisements promoted by eminent celebrities blindly. However, when unfair trade practices are exposed, the celebrities are quick to disassociate themselves with products/ companies they were hitherto representing.”

Saxena pointed out that in developing countries there are laws to punish the celebrities for endorsing misleading brands. He cited the example of Kardashian sisters: Khloe, Kourtney and Kim who were sued in the year 2012 for consumer fraud relating to the part they played in generating revenue for Quick Trim’s weight loss system. The three sisters were named in a    ‘class-action law suit’ filed in the Southern District of New York, in which the customers claimed that Kim, Kourtney and Khloe made “unsubstantiated, false and misleading claims” in advertisements, interviews and tweets about the efficacy of Quick Trim. It was reported that Kim Kardashian’s stamp of approval earned Quick Trim $45 million in sales. The sisters had been telling their fans during television and magazine interviews that they use the brand to lose their weight and stay thin. “But what action has been taken against the Indian celebrities whose endorsements were not found true and substantiated?” asks Saxena.

In the United States, an independent agency, the Federal Trade Commission (FTC) was established by the Federal Trade Commission Act, for the promotion of consumer protection, which also gives guidelines to the advertisers on how to keep their endorsements in line with FTC. According to the guidelines, if the actions of the celebrity were deceptive or misleading, ‘participant liability’ may follow.

As of now, in India, the group of ministers handling the proposal is required to reportedly make changes and submit the draft legislation for the cabinet’s scrutiny in the winter session of the Parliament after which the final version will be given to the Parliament for approval. However, if the jail term is not prescribed for the manufacturer, endorsers and the escape clauses are not removed the proposed law will not have the sufficient teeth to deal with the maddening menace.

In fact, every stakeholder engaged in the production of advertisement – ranging from manufacturers, advertising agencies, artists, celebrities and print/electronic media – should be held responsible for the involvement in the act. The agencies such as Advertising Council of India should also be made accountable for inaction or delayed action.

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