Advertisement regulation in times of influencers

Advertising is one of the most important functions in any business. It marks the link between the product and consumer. The Indian advertising market is even more pronounced and prominent.

According to a report by Dentsu titled Global Ad Spend Forecasts 1, India outstrips global advertising spending by a margin. It currently is expected to hit $11.1 billion in 2022. In fact, it is the fastest growing in the world. Thus, advertising is certainly a serious business.

Legislative intent as well as judicial intervention to ensure ethical and legal consumer trading and advertising in India has been unequivocally clear. The Consumer Protection Act, 2019 is a stark example of this. It captures the essence of fair business where the consumer is given various options to proceed with, in case of illegal activities by businesses. The wide ambit allows a fair redressal system and a punitive framework for non-compliance.

An unfortunate by-product of business perhaps also includes false, unethical and misleading advertising. The definition of advertising can broadly be understood to be a public notice or announcement of a thing or an endorsement of a product. India has legislation that prohibits this in a complicated legal framework. Defamatory or offensive advertising is prohibited by the Indian Penal Code (IPC) in an indirect manner. For instance, if any broadcast hurts religious sentiments or is found to be obscene, it can be pursued under the Code.

The Consumer Protection Act of 2019 provides for a strong regulatory framework. It defines advertising as "any audio or visual publicity, representation, endorsement or pronouncement made by means of light, sound, smoke, gas, print, electronic media, internet or website and includes any notice, circular, label, wrapper, invoice or such other documents."

Misleading advertising is defined as advertisement, which—

(i) falsely describes such product or service; or

(ii) gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or

(iii) conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or

(iv) deliberately conceals important information.

The Central government is required to establish a Central Consumer Protection Authority to regulate, among other things, false advertising.

Section 21 empowers the Central Authority for removal of any false advertising. Section 89 provides for the punishment for misleading advertising with imprisonment for a term which may extend to two years and with fine which may extend to ten lakh rupees; and for every subsequent offence, punishment with imprisonment for a term which may extend to five years and with fine which may extend to fifty lakh rupees.

Additionally, to ensure ethical advertising, the Advertising Standards Council of India (ASCI), an independent body, oversees advertisements and provides for ethical guidelines to be followed.

Amidst this entire framework, some crucial issues emerge from the growth of online presence and usage by consumers. According to some reports, about half of India’s population uses social media and this number is expected to grow. The new culture of influencers has tremendously had an impact on how we consume information. A congruent impact has been on how things are advertised. The current framework, whilst impressively detailed, needs greater overview to capture new and innovative ways to have a check on advertising.

First and foremost, what can be considered advertising is a blurred line. In traditional publications and on cable TV, it is fairly obvious to spot advertising as it does not usually become a part of the general show/film. However, lines are not as clear on social media, for example on platforms like Instagram and Facebook.

Second, guidelines to ensure that none of the advertising is misleading, especially for social media users, should be clear in scope and reporting mechanisms. Misleading advertisements should be regularly culled out and reported as such.

Third, the current framework of reporting only responds to extremes - other forms like advertising of substances banned on television is not necessarily captured. This has the potential to expose minors to alcohol, etc. This needs to be tightly regulated with verification of age and demographic study.

Social media usage has gone up tremendously and we need a congruent framework that is effective, fair, reasonable and puts accountability at its heart. It needs to be absolutely clear if a product is being advertised by an influencer. Who would qualify as a public figure or who an influencer is needs to be discussed and decided, based on statistics as well as public usage. We already have a framework by way of legislation that exists; we just need to bring it up to speed to match technological usage and advancement.

Vishavjeet Chaudhary is Barrister-at-Law (The Hon’ble Society of The Inner Temple) and Door Tenant (Lamb Building, Temple, London).