New Delhi: A parliamentary panel has suggested that celebrities be held accountable for the brands they endorse, especially if an advertisement in which they feature is found to be misleading.
A parliamentary standing committee on food, consumer affairs and public distribution on Tuesday tabled a report on the Consumer Protection Bill 2015 in Parliament, suggesting stringent provisions to regulate celebrity endorsements.
The recommendations include fines of up to Rs.50 lakh or a jail term of up to five years.
In its report, the committee also suggested empowering the Advertising Standards Council of India (ASCI) to curb misleading advertisements.
The panel called for severe penalties, including jail terms and cancellation of licence of those involved in food adulteration. It also recommended that the Department of Consumer Affairs be empowered to make laws to regulate e-commerce, direct selling and multi-level marketing, where the consumer complaints are on the rise, according to Press Trust of India.
The Consumer Protection Bill 2015 was introduced in the Lok Sabha in August to repeal the 30-year-old Consumer Protection Act. The panel’s report will be studied before the bill comes up for passage.
“The committee strongly feels that misrepresentation of a product, especially of food product, should be taken very seriously, considering the influence of celebrities and high networth individuals and companies. The existing laws are not deterrent enough to discourage manufacturers or publishers from using such personalities for misleading ads,” the panel on Consumer Affairs said in its report.
According to the report of the Parliamentary Standing Committee, stringent provisions may be made in the Bill to tackle misleading advertising as well as to fix liability on endorsers/celebrities.
“The committee recommends that for first time offence, the offender may be penalised with either a fine of Rs.10 lakh or imprisonment up to two years or both. For second time offence, a fine of Rs.50 lakh and imprisonment of five years,” PTI reported.
For subsequent offences, the penalties may be increased proportionately based on the value of sales of such products or services, it added.
“ASCI has deposed before the parliamentary committee and made representations. The committee was happy with the work ASCI has been doing for decades as a self regulator. Only help that we need is intervention by the regulator. The report, it appears, will add legal teeth to ASCI after the Bill comes in place,” said Shweta Purandare, the secretary general of the ASCI.
The accountability of celebrities as brand endorsers won attention after Nestle India Ltd’s Maggi Noodles was banned by the food regulator for allegedly containing excess lead and the additive monosodium glutamate (MSG). Some of its endorsers included Bollywood actors Amitabh Bachhan, Madhuri Dixit and Preity Zinta.
The ban on Maggi Noodles was later overturned by the Bombay high court.
“Organizations like ours, with credibility and with substantial due diligence of processes, will continue to attract good celebrities. In today’s time and age, authenticity is key for brands to appeal. Celebrities as endorsers need to align with the values of the brand and reflect it in reality,” said a Nestle India spokesperson.
Some celebrities have come under fire for endorsing brands misleading consumers. Recently, Indian cricket team’s ODI captain M.S. Dhoni had to resign as brand ambassador of realty firm Amrapali Group after residents of a housing society started protest against the builder and the cricketer on social media.
“We are confident of our products and stand by the commitments made to our consumers. We are however not in a position to comment on the proposed Bill on celebrity endorsements unless we are aware of its content and have studied it,” said Aditya Agarwal, director, Emami Group.
Products of Emami Group are endorsed by a bunch of celebrities, including Amitabh Bachhan, Shah Rukh Khan, Madhuri Dixit, Kangana Ranaut, Juhi Chawla, Sania Mirza and M.S. Dhoni, among others.