  By Rahul Beruar and Jyotsana Sinha E: rahul.beruar@clasislaw.com • jyotsana.sinha@clasislaw.com The marketing and advertising industry has grown as an organised industry using innovative ideas that are designed to engage the aspirations of the viewers and form a bond with the public.Today the majority of brands, irrespective of the category of products/services, seek celebrities to endorse the brand and attach themselves to the reputation and familiarity associated with the celebrity, which enhances the brand’s value. For instance, the endorsement of a special variety of cornflakes by an Indian actress allows millions of viewers to instantly associate with the product, drawing assurance from representation that an actress of such repute lost weight by consuming the said product. Similarly, in another advertisement another Indian actress and mother of two, claimed health benefits of instant noodles while offering the same to her on-screen children, imparting a sense of assurance with respect to the quality of the product to millions of viewers. Laws in India regulate the content of advertisements and impose liability on manufacturers and producers for misleading advertisements, however none of them cast any direct liability on the endorser. The relationship between celebrity endorsers and the manufacturers is governed by contracts executed between the two parties, which indemnify the celebrities of any liability incurred with respect to such commercials. The veracity of the claims made by the celebrities with respect to the endorsed products is immaterial and the endorsers are free to make any claim/statement as suggested by the producers notwithstanding the fact that the endorsers may not have used the product as claimed in the advertisement. Conversely, in the US, the law imposes restrictions on celebrities, prohibiting them from endorsing products they haven’t personally used and making false claims/misrepresentations. In India, however, there is no law establishing any restriction on the celebrities or requiring them to even have used the product themselves before endorsing it. Thus, in the absence of any law/regulation, the celebrities are free to portray anything under the sun being totally oblivious of the effect of their endorsed product, leaving the responsibility solely on the government authorities to regulate and monitor the quality/standard of products being offered in the market, prescribe rules and regulate the content of advertisements. However, in light of Nestle India’s controversy wherein its instant noodle was banned by the Food Safety and Standards Authority of India (FSSAI), the statutory body responsible for promoting public health through regulation and supervision of food safety, arose the question of liability of its past and present brand ambassadors, who were frequently seen in advertisements claiming its health benefits and promoting the product. Prodded by the uproar over the instant noodles advertisements and consequential ban on the product on the issue of public safety, the Government of India initiated measures to ascertain the liability of brand ambassadors. Accordingly, certain provision were incorporated in the Consumer Protection Bill 2015 (Bill), including provisions regulating the conduct of celebrities and rendering them liable for endorsements where the product falls short of the claimed standard and/or quality. The Bill prescribes imprisonment of endorsers in case of violation of its provisions and provides an exception only if the endorser “took all precautions and exercised due diligence before endorsing a product or service”. Such a provision, along with the power of Central Consumer Protection Authority to act upon complaints of misleading advertisements appears to be in line with the powers of the Bureau of Consumer Protection in the Federal Trade Commission (FTC) of the US. The FTC, a statutory body established to prevent business practices that are deceptive or unfair to consumers, has issued guidelines regulating use of endorsements and testimonials in advertising stating that an advertisement may include a claim that a celebrity uses the product only if the celebrity has in fact used a product/service and require endorsements to reflect the honest opinions, findings, beliefs or experiences of the endorser. There are, however, views that advocate for a prohibition on endorsement of certain category of products as opposed to creating legal liability for the celebrity endorsers. However, in the absence of any specific laws, the celebrities would continue to dish out instant noodles, energy drinks and so on as staple food which the celebrities and their family allegedly use in their day to day life. ––––––––––––––– |
Brands – Role and liability of celebrity endorsers
