The Supreme Court of India, in a significant ruling dated May 7, 2024, has mandated that all advertisers must submit a self-declaration certificate before releasing advertisements. This directive aims to curb the proliferation of misleading advertisements and ensure consumer protection. This decision impacts advertisers and advertising agencies both foreign and domestic by introducing a new layer of compliance, potentially affecting the speed and manner in which advertisements are released. Understanding these changes is crucial for stakeholders to adapt their practices accordingly.
Background and Legal Context
The decision stems from the Supreme Court's judgment in the case of Indian Medical Association & Anr. vs. Union of India & Ors.1. This case was brought forth by the Indian Medical Association (IMA), highlighting the rampant issue of misleading advertisements, particularly in the health and wellness sector. These advertisements often exploit consumers' lack of knowledge, leading to serious consequences such as misinformed health decisions and financial losses. For reference, out of the 8229 ads scrutinized by the Advertising Standards Council of India (ASCI) between 2023-24, 19% accounted to the healthcare sector, with 1569 cases held violative of the ASCI Code.2
The Patanjali Misleading Advertisements Case
The case against Patanjali Ayurved, co-founded by the internationally acclaimed yoga guru Ramdev, became the focal point of this larger issue. Patanjali faced scrutiny for numerous advertisements alleged to make false and misleading claims about the efficacy of their products. For instance, they claimed certain Ayurvedic products could cure diseases like diabetes and hypertension without substantial scientific backing.
The controversy began when the Indian Medical Association (IMA) filed a petition against Patanjali, arguing that their advertisements misled the public by making unverified health claims. The IMA emphasized that such claims could result in consumers opting for these products over medically approved treatments, thereby endangering their health.
Supreme Court's Scrutiny and Hearings
The Supreme Court took up the case, scrutinizing not just Patanjali's practices but also the broader landscape of misleading advertisements in India. During the hearings, it was revealed that Patanjali's advertisements often touted their products as cures for serious diseases without sufficient scientific evidence. The Court noted that these claims were not only false but potentially harmful as they might lead people to abandon proven medical treatments in favor of unverified alternatives.
The petitioners presented numerous instances of misleading advertisements. For example, Patanjali's products like Coronil were advertised as cures for COVID-19, which led to widespread criticism and legal challenges. The advertisements were accused of exploiting the public's fear during the pandemic and providing a false sense of security.
The Supreme Court ordered Ramdev and Patanjali Ayurved to issue public apologies, acknowledging the misleading nature of their advertisements. Further, the Supreme Court insisted on stronger regulatory measures to prevent future occurrences. The Court was critical of the superficial compliance exhibited by advertisers (including Ramdev) who often publish small apologies in newspapers, which are not proportionate to the original misleading advertisements.
Legal Framework and Regulatory Mechanisms
The Supreme Court examined the effectiveness of existing regulatory frameworks, finding significant gaps in enforcement. The current regulations under the Drug and Magic Remedies (Objectionable Advertisements) Act, 1954, and the Consumer Protection Act, 1986, were deemed inadequate in curbing misleading advertisements. The ministries involved, including the Ministry of Health and Family Welfare, the Ministry of Information and Broadcasting (MIB), and the Ministry of Consumer Affairs, provided affidavits detailing their actions, but the Court noted a lack of comprehensive and consistent measures. The Central Consumer Protection Authority (CCPA) was highlighted as a crucial body that needed to take more proactive measures to protect consumers.
Key Points of the Supreme Court Judgment
The Supreme Court's judgment included several critical directives to strengthen the regulatory framework and ensure better enforcement. These directives were aimed at closing the gaps identified during the hearings and providing a robust mechanism to protect consumers from misleading advertisements.
- Mandatory Self-Declaration Certificate: The Supreme Court directed that advertisers must submit a self-declaration certificate affirming the truthfulness and legality of their advertisements. This requirement is based on Rule 7 of the Cable Television Networks Rules, 1994, ensuring advertisements conform to the laws of the country and do not offend morality, decency, or religious susceptibilities.
- Online Submission: The self-declaration certificates must be uploaded on the Broadcast Sewa Portal managed by the Ministry of Information and Broadcasting. For advertisements in print media, the Ministry was directed to establish a dedicated portal within four weeks of the judgment. Proof of submission must be provided to broadcasters, publishers, and electronic media.
- Consumer Protection: The judgment reiterated the role of the CCPA in regulating unfair trade practices and false advertisements. The CCPA is empowered to take suo moto action against false advertisements, particularly in the food and health sectors.
- Responsibility of Endorsers: Public figures, influencers, and celebrities endorsing products must ensure the advertisements are not deceptive. They are required to perform due diligence to verify the claims made in the advertisements.
Government Directives
Following the Supreme Court's decision, the Ministry of Information and Broadcasting (MIB) issued detailed guidelines requiring advertisers to comply with the new mandate starting June 18, 2024. The Central Bureau of Communication (CBC) also published comprehensive guidelines for advertisers to follow when submitting their self-declarations. According to the MIB's Guidelines3:
- Self Declaration Form: Advertisers must fill out a detailed self-declaration form that confirms the accuracy and legality of their advertisements. This form requires advertisers to provide evidence supporting their claims, including scientific studies, certifications, and endorsements from relevant authorities.
- Submission and Verification: Following the SC's directive, the self-declaration certificates must be submitted online through the Broadcast Sewa Portal for electronic media. For print and internet advertisements, a separate portal will be created within four weeks. Advertisers must ensure that the self-declaration is uploaded before the advertisement is released. The proof of submission must be retained and made available for verification upon request.
- Compliance with Advertising Codes: Advertisers must ensure their advertisements comply with the Advertising Code as outlined in the Cable Television Networks Rules, 1994. This includes avoiding content that derides any race, caste, color, creed, nationality, or violates constitutional provisions. Advertisements must not incite crime, glorify violence, exploit national symbols, or portray women in derogatory manners.
- Monitoring and Enforcement: The Ministry of Information and Broadcasting, in coordination with other relevant authorities, will monitor compliance with these guidelines. Non-compliance will result in strict penalties, including fines ranging from INR 10-50 lakhs (USD 12,000-60,000) depending on the severity and frequency of the violation, and bans on the publication of advertisements.
Impact of the Mandate
The new mandate significantly impacts advertisers and advertising agencies by introducing a rigorous compliance process. Both foreign and domestic advertisers must adapt to these changes to avoid legal repercussions.
Advertisers will now need to invest more resources into ensuring their advertisements meet legal standards. This includes conducting thorough research and obtaining the necessary certifications to support their claims. The additional step of submitting self-declaration certificates is bound to slow down the advertisement release process, requiring better planning and coordination not just at the Advertiser's end but also at the regulatory's end.
With this mandate, public figures, influencers, and celebrities endorsing products also face increased scrutiny. They must perform due diligence to verify the claims they endorse, making them more accountable for the advertisements they participate in. This might lead to a reduction in celebrity endorsements or a shift towards endorsing only well-established products with verified claims.
Regulatory bodies, such as the CCPA, will also need to enhance their monitoring capabilities to enforce these new guidelines effectively. This might involve upgrading their digital infrastructure to handle the increased volume of self-declaration submissions and employing more personnel to scrutinize the declarations. Additionally, the collaboration between various ministries and regulatory authorities will need to be seamless to ensure swift action against non-compliant advertisements.
Conclusion
India, with its massive population and diverse consumer base continues to presents a unique challenge and opportunity for advertisers. The new mandate can be seen as a step towards maturing the advertising industry, fostering trust, and ensuring that consumers are not misled. However, it also places a significant burden on advertisers to maintain transparency and integrity.
Advertisers may face initial hurdles in adapting to the new requirements, but in the long run, this could lead to higher standards and more innovative ways to engage consumers ethically. Brands that prioritize honesty and substantiated claims may find themselves gaining consumer trust and loyalty more easily than those relying on exaggerated claims.
As the guidelines take effect, it will be interesting to observe how the advertising landscape evolves and how stakeholders navigate these changes to uphold consumer trust and confidence.
Footnotes
1. W.P. (Civil) No. 645/2022
2. ASCI's Annual Complaints Report, 2023-2024, https://www.ascionline.in/wp-content/uploads/2024/05/Annual-Complaints-Report-2023-24.pdf
3. https://cbcindia.gov.in/cbc/uploads/mandate/Self_Declaration_Portal_Guidelines.pdf
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