27 July 2022

India’s new ad rules benefit lawyers

India’s celebrity endorsers are turning to legal firms to ensure they don’t break new advertising guidelines from the Central Consumer Protection Authority (CCPA) which came into force last month.

What the guidelines require 

Endorsers and influencers are now “legally accountable” for any claims they make in ads and have to provide proof of due diligence regarding said claims. They should also disclose any “material connection” with the brand, for example, in the form of equity or profit sharing.

The question of who is responsible for doing due diligence, however, is a grey area. “While some talent management companies believe putting the entire responsibility on the celebrity is unfair, since it is the manufacturer and its advertising agency that is scripting the ad, some others are of the view that endorsers should make at least some effort towards diligence about what they are endorsing,” Pritha Jha, partner at law firm Pioneer Legal, told the Economic Times.

Why it matters 

The travails of celebrity endorsers are opening up a new area of legal practice, and one that could be lucrative given the scale of this industry in India, where cricketers and actors regularly boost their earnings via multiple endorsements.

An alternative view would be that fewer celebrities may now be willing to risk going down this route as they could end up in court if they aren’t prudent (involvement with crypto exchanges, for example, seems to carry particular dangers). Either way, this part of India’s marketing landscape is facing significant changes.

Key quote

“The bigger celebrities, especially, are doing their own diligence individually and being extremely careful now. Everybody is getting professional legal help, since celebrities are easy targets for everyone” – Vinita Bangard, founder of talent management company Krossover Entertainment.

Sourced from Economic Times