On May 7, the Supreme Court of India issued a warning, stating that social media influencers and celebrities would share equal responsibility and liability if they are discovered endorsing products or services in misleading advertisements.

'We are of the opinion that the advertisers or the advertising agencies or endorsers are equally responsible for issuing false and misleading advertisements. Endorsements by public figures, influencers, celebrities, etc go a long way in promoting a product and it is imperative for them to act with responsibility when endorsing any product in the course of advertisements,' said the bench of Justices Hima Kohli and Ahsanuddin Amanullah, while taking note of the Central Consumer Protection Authority (CCPA) guidelines which call for influencers to be transparent about paid endorsements.

The court said celebrities and influencers should 'not abuse the trust placed in them by the public.'

The Supreme Court of India has taken stricter action against Patanjali Ayurved by dismissing a second apology from the company, its founder Baba Ramdev, and managing director Acharya Balkrishna. The Apex Court expressed displeasure over Patanjali's advertisements that purported to cure various serious ailments, including Covid-19.

Misleading Advertisement, as defined in the Section 2 (28) Consumer Protection Act 2019, refers to any product or service is one that falsely describes the product or service, provides a false guarantee, or is likely to deceive consumers regarding its nature, substance, quantity, or quality, conveys express or implied representations constituting unfair trade practices if made by the manufacturer or seller, or deliberately conceals important information. When an edible oil advertisement gives you the impression that you are free of heart problems so long as you are using that particular oil, then it is misrepresenting facts.

In the case of Havells India Ltd. & Ors. v Amritanshu Khaitan & Ors., the Delhi High Court outlined the test for determining whether an advertisement is misleading. The Court stated that for an advertisement to be considered misleading, it must deceive or have the potential to deceive the targeted audience. Additionally, the deceptive nature of the advertisement must be likely to impact the economic behavior of the public or harm a competitor of the advertiser.

Globally, celebrity endorsements of high-salt, high-sugar, and high-fat foods are worrisome, impacting more than just children's purchasing habits. In India, film celebrities endorsing popular packaged foods, particularly sweetened beverages like Kellogg's K Special (endorsed by Deepika Padukone), Thums Up (endorsed by Salman Khan), Ching's Secret, and Kellogg's Oat Masst Masala (endorsed by Ranveer Singh), exacerbate the issue.

Consumers are significantly influenced by celebrities in their purchasing decisions due to findings in marketing psychology. Research indicates that people are more likely to choose products endorsed by celebrities, doing so faster and with greater confidence. This phenomenon is attributed to evolutionary tendencies, where humans and primates naturally align with high-status individuals, following their gaze or decisions. Gaze-cueing is stronger with non-celebrities, but celebrities' presence tends to draw attention regardless of their gaze direction.

People often focus solely on the positive aspects highlighted in advertisements, overlooking potential negative impacts. For instance, Maggi Atta Noodles were marketed as whole grain with natural vegetables, omitting mention of their high salt and fat content.

The responsibility of brand representatives has come under scrutiny, notably following controversies surrounding Monosodium Glutamate and excess lead in Maggi noodles, which were endorsed by film actors like Amitabh Bachchan, Madhuri Dixit, and Preity Zinta. Similarly, Reebok's 'EasyTone' shoes, endorsed by Bipasha Basu, faced criticism for failing to meet the guarantees and claims made in the advertisements.

The Central Consumer Protection Authority (CCPA) has been established under Section 10 of the Consumer Protection Act, 2019 for regulating matters relating to violation of the rights of the consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class.

It has issued Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022' with an objective to curb misleading advertisements and protect the consumers, who may be exploited or affected by such advertisements. Penalties for violating the guidelines are clearly outlined. The CCPA imposes fines of up to 10 lakh rupees for misleading advertisements, with subsequent violations facing penalties of up to 50 lakh rupees. Endorsers can be banned from endorsements for up to 1 year, extending to 3 years for repeat offenses.

The Food Safety and Standards Authority of India (FSSAI) introduced the Food Safety and Standards (Advertising and Claims) Regulation, 2018 to ensure fairness in food product advertisements and protect consumer interests. One key principle is that claims must be truthful, unambiguous, meaningful, and not misleading. FSSAI partnered with The Advertising Standards Council of India (ASCI) through a Memorandum of Understanding (MoU) to establish a monitoring mechanism for misleading advertisements, facilitating effective regulation through structured guidelines and actions.

The Advertising Standards Council of India (ASCI) seeks to ensure that advertisements conform to its Code for Self-Regulation, which requires advertisements to be legal, decent, honest and truthful, and not hazardous or harmful, while observing fairness in competition.

Section 5(28) of the Consumer Protection Act 2019 introduces a critical defense provision for endorsers, centered on the concept of 'due diligence.' However, the interpretation of 'due diligence' remains a contentious issue, with its application varying depending on the circumstances of each case. While this provision aims to hold endorsers accountable, it also raises questions about what constitutes sufficient due diligence, especially in the realm of celebrity endorsements.

The ambiguity surrounding this provision poses risks on both fronts: it provides a potential loophole for endorsers to evade liability while granting the central authority discretionary power in determining whether due diligence was indeed exercised.

Since the ASCI does not have the power to impose punitive measures, violators often repeat offences, and resort to surrogate advertisements to escape liability and promote their product. In fact, companies are lately changing their campaigns, moving from nutrition and health claims to emotional tags to avoid scientific scrutiny.

In the case of Chander Kanta Bansal v Rajinder Singh Anand, the Supreme Court clarified the term 'due diligence' as "reasonable diligence," akin to what a prudent individual would exercise in managing their own affairs. This emphasizes the importance of clarity and accountability in celebrity endorsements, striking a balance between consumer interests and those of endorsers.

Celebrity endorsements heavily influence consumer choices, especially regarding food products, raising concerns for public health. Many countries, like Canada, Estonia, and the UK, have enacted regulations to curb unhealthy food ads, some specifically targeting celebrity endorsements. A complete ban on such endorsements could be a pivotal public health intervention, as seen in the UK's success in reducing ads promoting unhealthy foods by 37% from 2005 to 2009.

The Supreme Court ruling emphasizes the responsibility of celebrities and influencers in endorsing products, especially in regard to misleading advertisements. As legal frameworks evolve and consumer awareness grows, the future of celebrity endorsement will likely demand greater transparency and accountability to safeguard consumer interests and public health.

End-Notes:

• https://www.business-standard.com/industry/news/sc-states-celebrities-influencers-equally-accountable-for-misleading-ads-124050701424_1.html
• https://www.business-standard.com/industry/news/sc-states-celebrities-influencers-equally-accountable-for-misleading-ads-124050701424_1.html
• https://www.thehindubusinessline.com/companies/sc-rejects-second-apology-from-baba-ramdev-and-patanjali-ayurved-in-contempt-case/article68050254.ece
• https://indiankanoon.org/doc/91815858/
• https://economictimes.indiatimes.com/industry/cons-products/food/maggi-effect-fssai-issues-order-on-defying-msg-related-norms/articleshow/51652069.cms?from=mdr
• https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/CCPA%20Notification.pdf
• https://www.fssai.gov.in/upload/uploadfiles/files/Press_Release_MOU_ASCI_28_06_2016.pdf
• https://www.pitchonnet.com/pitch-feature/unmasking-surrogate-advertising-celebrities-loopholes-and-battle-for-ethical-visibility-33730.html
• https://www.downtoearth.org.in/news/health/misleading-ad-endorsements-by-celebrities-consumer-protection-bill-2018-has-loopholes-59463