Govt issues new guidelines to prevent misleading ads

To also come out with guidelines to curb fake reviews on e-commerce platforms

The guidelines will be applicable to advertisements published on all platforms like print, television and online.
The guidelines will be applicable to advertisements published on all platforms like print, television and online.

The government on Friday issued new guidelines to prevent misleading advertisements, including those targeting children and making free claims to woo consumers.

The norms released by the Central Consumer Protection Authority (CCPA) prohibit the endorser of a misleading advertisement from making any endorsement for up to one year and for subsequent contraventions, prohibition can extend up to three years.

The guidelines also seek to ensure that consumers are not being fooled with unsubstantiated claims, exaggerated promises, misinformation and false claims.

The guidelines has prescribed duties of manufacturer, service provider, advertiser and advertising agency, due diligence to be carried out before endorsing. 

“Guidelines aim to protect consumer’s interest through bringing in more transparency and clarity in the way advertisements are being published, so that consumers are able to make informed decisions based on facts rather than false narratives and exaggerations,” according to an official statement.

The guidelines has the provision of CCPA imposing penalty of up to `10 lakh on manufacturers, advertisers and endorsers for any misleading advertisements. For subsequent contraventions, CCPA may impose a penalty of up to `50 lakh.

The CCPA stated that in the last one year or so, 113 notices had been issued to commercial entities, of which 57 were for misleading advertisements and 47 notices were related to unfair trade practices and nine were about violation of consumer rights. 

“There is also the idea of creative licence and advertisers use tools like humour and exaggeration to get their point across. The fear is that such unbridled power to an external agency scrutinise ads might impact the whole creative process negatively. The ad fraternity must come together to ensure that doesn’t happen,” said Samit Sinha, founder, Alchemist Brand Consulting.

The government will soon come out with guidelines in consultation with industry representatives to curb fake reviews on e-commerce platforms.  

The consumer affairs ministry has recently held a meeting with representatives of the e-commerce industry, Advertising Standards Council of India, Confederation of Indian Industry and other trade bodies to form guidelines to curb fake reviews on e-commerce platforms.

After studying the present mechanism being followed by the e-commerce entities in India and best practices available globally, the frameworks will be formulated.

The committee to be set up will have representatives of Amazon, Reliance, consumer organisations and law firms

“We will form the guidelines in the next two months,” Rohit Kumar Singh, secretary, Department of Consumer Affairs, said on Friday. An official said since e-commerce involves a virtual shopping experience without any opportunity to physically view or examine a product, consumers heavily rely on reviews posted on e-commerce platforms to know about the opinion and experience of users who have already purchased the goods or service.

Meanwhile, to curb ‘exaggerated claims’ made by advertisements associated with EduTech firms and cryptocurrency, the department of consumer affairs has called a meeting of stakeholders. “For the longest time the advertising industry followed the path of self regulation and it has done a good job to stay within the limits of law, honesty and decency,” said Sinha. “Now with digital it is far more difficult to have that kind of control over social media. In that sense it is good that you are bringing in an external agency to exercise that control.”

In response to a query by FE, Singh stated that a meeting had been called with EduTech firms like Byju’s, Unacademy and others patterning to advertisements such as ‘two teacher advantage’ that is putting undue pressure on children. “We are aware of this. I have called a meeting of EduTech companies next week or so,” Singh said.

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