Consumer Protection Bill 2018 leaves talent management firms perplexed

MUMBAI: The proposed Consumer Protection Bill 2018, which was introduced in the Lok Sabha on 5 January, has left the advertising and talent management companies perplexed.

The advertising and talent management companies are seeking a clarification on – definition of celebrity, the definition of due-diligence, what is ‘misleading,’ and how will they determine that capacity of due diligence.

Elaborating on the same, Kwan Entertainment & Marketing Solutions founder and chief executive Anirban Das Blah said, “This legislation sounds good but it needs clarity on the following three main specific points. How do you define celebrity, how do you define due diligence, how do you determine that capacity of due diligence exist with the celebrity across a range of products and services across sectors. We don’t even have clarity on implementing this penalty. One can argue misleading ads under the false claim but how will one argue the said three points that is why it is necessary to have clarity.”

Commenting on the course of action they are planning to take on the bill, Blah stated that the bill is not yet passed, once it’s passed “we will sit and talk with regulatory authority and ask for clarification”.

“We are not in this for confrontation, we are in the support but we need clarification before implementation. The idea of law is not to leave anything on interpretation, the law is not ambiguous, so we need clarity,” he said.

The newly introduced Consumer Protection Bill, 2018 has imposed Rs 50 lakh penalty and a ban of up to three years on the celebrities endorsing misleading ads.

The bill stated, “No endorser shall be liable to a penalty if he has exercised due diligence to verify the veracity of the claims made in the advertisement regarding the product or service being endorsed by him.”

One of the major objectives of the bill is to crack down on misleading advertisements, however, there is no clarity on what defines misleading ads.

The bill also stated that if the Central Consumer Protection Authority (CCPA), proposed to be set up under the bill, is satisfied that an advertisement is false or misleading, it may issue directions to endorsers, advertiser, publisher as well traders and manufacturers to discontinue or modify such an ad.

According to the bill, the CCPA will have the powers to impose a penalty of up to Rs 10 lakh on endorsers and manufacturers. For the subsequent violation, the penalty will be of up to Rs 50 lakh. The authority will also have the power ban endorser of false or misleading ads from making an endorsement of any product or service for a period of one year, while subsequent violation will attract a ban of up to three years.

In case of those publishing misleading ads, the bill empowers CCPA to impose a penalty of up to Rs 10 lakh. However, no penalty will be slapped if publishers prove that the ad was published in the ordinary course of their business. “No defence shall be available to such person if he had previous knowledge of the order passed by the CCPA for withdrawal of or modification of such advertisement,” the bill said.