Controlling the hard sell

News: ‘Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022’ have been notified by the Central Consumer Protection Authority (CCPA).

These guidelines have been long overdue.

What are the key provisions under the new rules?

Under the new rules,

– Penalties for misleading advertisements have been linked to the definition of such infractions and the punitive measures provided under Section 2 (28) of the Consumer Protection Act.

– The Central Consumer Protection Authority can also prohibit an endorser of a misleading advertisement for up to one year, and three years for a repeat offence.

Two other critical points about the new guidelines are that they clearly define “bait” and “free claims” advertising and strictly set limits to advertising for children, including those with celebrity endorsements.

The guidelines also require a disclaimer to be published in the same language as the claim made in the advertisement and the font used must be the same as that used in the claim.

Why the new guidelines were necessary?

The advertising industry’s well-meaning attempts at self-regulation have proven inadequate so far.

The proliferation of advertising for online gaming sites and mutual fund products has magnified the problem of misleading advertising.

Tightening standards of advertising for children, including disallowing celebrity advertising in some cases, as children are key purchase influencers in middle-class Indian households.

What are the challenges involved?

The key question, however, is how the government will enforce the guidelines.

The Central Consumer Protection Authority, which was formed in 2020, is responsible for regulating false and misleading advertisements and punishing offenders, the functions that the Advertising Standards Council of India used to perform.

– Tracking advertising in India’s more than 10,000 print publications and 850-plus TV channels in multiple languages is challenging enough.

– But the principal problem today is the proliferation of online advertising, not all of it originating in India.

This will require a gargantuan organisation to track effectively.

What is the way forward?

The CCPA should consider banning the advertising of junk food and drink, just as it has done for fairness creams, alcohol, cigarettes, and chewing tobacco. The volume of junk food advertising has played a key role in the exponential rise of childhood obesity and diabetes among middle-class Indians.

As with alcohol, for which surrogate advertising has sensibly been banned as well, point-of-purchase publicity for junk food should be considered sufficient publicity.

A requirement of slowing the pace at which disclaimers are read on TV ads would also be useful.

It would also make sense for the CCPA to work closely with other similar authorities to regulate claims on health and personal product packaging and include health warnings as is done on tobacco products. In that sense, the new guidelines could be considered a good starting point.

Source: This post is based on the article “Controlling the hard sell” published in Business Standard on 12th June 22.