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Home / Industry / Havells case against ASCI brings regulator’s role back in spotlight

New Delhi: A case being heard in the Delhi high court, filed by Havells Pvt. Ltd against advertising industry self-regulator Advertisement Standards Council of India (ASCI), has put the spotlight back on ASCI’s role and its limited enforcement powers.

On 19 October 2015, the Delhi high court had stayed an order passed by the ASCI against Havells India directing the electrical equipment maker to modify or withdraw its advertisement carrying the tag line “wires that do not catch fire", on the grounds that it was misleading.

The court on Wednesday heard arguments by Havells questioning ASCI’s powers to issue such orders and the manner in which it does so.

“How can a private body strong-arm companies that do not subscribe to it (ASCI) into accepting their orders and how can government allow them to do so?" asked a lawyer representing Havells in court.

ASCI is a voluntary organization, registered as a non-profit company under the Companies Act. The sponsors of ASCI, who are its principal members, are firms within the industry in India, including advertisers, media, advertising agencies and other professional /ancillary services connected with the advertising practice.

After repeated calls for legislative backing and more teeth by the self-regulatory body, the government in 2006 through a notification made sure that at least television commercials abide by the ASCI code. The amendment made in Cable Television Networks Rules, 1994 through a Notification dated 2 August 2006 now states: “(9) No advertisement which violates the Code for Self-Regulation in Advertising, as adopted by the Advertising Standards Council of India (ASCI), Mumbai for public exhibition in India, from time to time, shall be carried in the cable service".

However, ASCI continues to regulate all advertisement, including print and radio, even though there is no law that supports it at the moment. As per ASCI’s website, its code of self-regulation “is quite comprehensive and covers all media including the internet or digital media. Again, the definition of advertising in ASCI code establishes that “media are any means used for the propagation of advertisements and include press, cinema, radio, television, hoardings, hand bills, direct mail, posters, internet, etc".

ASCI’s interference with non-members has been criticized by courts time and again. In May 2015, the Bombay high court called ASCI’s ‘ex parte order “yet another instance of high handed, unlawful and unilateral conduct of ASCI, a self-appointed watchdog of public advertisements and similar materials in print and media", in a case concerning an advertisement for ‘Biolif Body Buildo’.

Benoy Roychowdhury, ASCI chairman and executive director at HT Media Ltd, which publishes Mint, agrees that ASCI is a self-regulatory agency and not an enforcement body that can make advertisers comply in cases of complaints against their advertising. “If advertisers say that we do not have the power to force them to take their ads off air, they are right. The Cable TV Act gives us the power to recommend to the ministry of information and broadcasting when an advertiser refuses to comply and stop an objectionable ad. The ministry can then push the channel to follow the advertising code or can take the channel off air if it does not desist from airing the ad," he said.

Sandeep Goyal, chairman, the Mogae Group, is not fully convinced about the real powers of the self-regulatory body. “ASCI is a self-regulatory body and its role is at best advisory. It doesn’t have any teeth, let alone fangs when it comes to enforcing decisions made by its committees."

He added that ASCI hasn’t been effective even with regulating its members. “Whether it is at the height of the cola wars or toothpaste wars, certain companies and members have become experts at pushing the boundaries. For instance, a company will run an offensive ad aimed at the competitor. By the time the competitor reacts, complains to ASCI, ASCI sets the complaint before a committee and then decides to strike down the offending advertisement, the damage is already done." Goyal has served on the governing bodies of the Advertising Agencies Association of India, Indian Broadcasting Foundation, Advertising Standards Council of India and Media Research Users Council.

ASCI takes up complaints about advertisements appearing on websites, e-commerce portals, social media platforms, movie promotion videos and YouTube trailers that people have flagged as ‘offensive’. However, ASCI’s vague usage of the term ‘offensive’ is often considered problematic. According to J. Sai Deepak, associate partner at Saikrishna & Associates, it is only a matter of time until the courts decide on ASCI’s powers fully. “Terms like ‘offensive’ are struck down by courts when legislations use it. There’s no way a self-regulatory body like ASCI can defend it."

The apex court in 2015 struck down a key provision—section 66A of the Information Technology Act, 2000—which punishes sending ‘offensive’ messages through communication services, including posts on social media websites. “It is “obvious that expressions such as “grossly offensive" or “menacing" are so vague, that there is no manageable standard by which a person can be said to have committed an offence or not to have committed an offence," the court had said in its judgment.

In spite of all the legal issues surrounding ASCI, self-regulatory bodies are generally the norm even in other countries. “Internationally, the industry is largely self-regulated and follows a code of conduct. “However, the rules are more rigorous and enforceable abroad. The compliance is very high, unlike in India where you do see the industry flouting the rules till they are caught. For instance, all the surrogate advertising by the alcohol industry. Or lead in noodles. You would hardly ever get away with something like that," Goyal said.

The US for example, has the Advertising Self-Regulatory Council (ASRC), performing functions similar to its Indian counterpart. ASRC has an internal appellate body where its orders can be contested. France and the UK have a pre-clearance system for all advertisements. “Most reputed companies believe in self regulation. It is some outliers who refuse to agree. In such cases, they have to be ready to bear the consequences of either the court or government intervention. Most companies avoid litigation and follow self-regulation. Smart companies know its value," Roychowdhury said.

An email sent to a spokesperson for ASCI remained unanswered.

Gouri Shah in Mumbai contributed to this story.

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