Film stars, cricket celebrities and other icons endorsing false and misleading advertisements are in for trouble with a new consumer protection bill, which is set to get the nod of the Union Cabinet soon, prescribing a fine of up to Rs 50 lakh and ban on future endorsements up to three years.
A copy of the Consumer Protection Bill 2017 pending before Cabinet Secretariat (accessed by DNA) shows that the Central Consumer Protection Authority to be set up through the law, can impose on endorsers a penalty extending to Rs 10 lakh if turns out that the advertisement is false or misleading, is prejudical to to the interest of any consumer or in contravention of consumer rights.
For every subsequent contravention by the endorser, the Authority can impose a penalty up to Rs 50 lakh rupees.
Besides, the Authority can also prohibit the endorsers of a false or misleading advertisement from making endorsement of any product and service for a period up to one year.
Again for every subsequent contravention, such endorsers can be prohibited from making endorsement of any product and service for up to three years.
The bill that seeks to make sweeping changes in the over three-decade-old 1986 Consumer Protection Act, also provides for punishment to publishers. If the Authority is satisfied after investigation that any party publishes or a party to publication of misleading advertisement, it may impose on the person a penalty extending up to Rs 10 lakh rupees.
The new Consumer Bill that is likely to be introduced in a short Winter Session also provides for punishment including imprisonment to officers for “vexatious search”. The move aims at checking undue harassment to traders.
The bill has undergone various changes at different stages. After the bill then named Consumer Protection Bill 2015 was introduced in Parliament in August 2015, it was sent to a Parliamentary Standing Committee, which recommended stringent provisions like jail term up to five years for celebrities endorsing misleading advertisements.
Later a Group of Ministers headed by Finance Minister Arun Jaitley studied the draft bill in detail and after going the world wide practices in this regard disapproved of the recommendation to jail brand ambassadors but retained the fine and ban provisions.
The issue of accountability of celebrities as brand endorsers had come into spotlight a number of times, most recently and most prominently in 2016 after the ban on Nestle India Ltd’s Maggi Noodles, which was subsequently lifted. As actors like Amitabh Bachchan, Madhuri Dixit and Preity Zinta had endorsed the product, there was an outcry as to how can these celebrities, who can influence large population endorse just any product.