NEW DEHLI: The Indian government’s proposed legislation to update and simplify consumer protection law and procedures has sparked an industry debate around what exactly constitutes a “misleading ad”.

The Bill notes that “the emergence of global supply chains, rise in international trade and the rapid development of e-commerce have led to new delivery systems for goods and services and have provided new options and opportunities for consumers.

“Equally, this has rendered the consumer vulnerable to new forms of unfair trade and unethical business practices. Misleading ads, tele-marketing, multi-level marketing, direct selling and e-commerce pose new challenges to consumer protection and will require appropriate and swift executive intervention to prevent consumer detriment.”

It proposes fines and imprisonment for manufacturers or service providers responsible for false or misleading ads, while celebrity endorsers would also be open to fines and bans.

“There are a few questions around this bill,” Anirban Das Blah, managing director of Kwan Entertainment, which includes talent management in its portfolio, told Business Today. “Define misleading, define a celebrity.”

These are grey areas, suggested Sudip Ghose, Senior Vice President, Sales and Marketing at luggage maker VIP Industries, observing to Exchange4Media that it is in the nature of advertising to take creative liberties, but which do not necessarily harm the consumer.

“What is misleading to you may not be misleading to me,” he added. “This is grey area right now; it has to be formalised” – preferably by a body like the Advertising Standards Council of India.

Das Blah also highlighted the need to clarify the “due diligence” clause imposed on endorsers. “How is a celebrity supposed to check or evaluate the quality of the product he or she is endorsing. Is the government going to create a mechanism to verify quality of products or services?”

His point was echoed by Karan Kumar, Chief Marketing Officer at retailer Fab India, who pointed out there is nowhere that celebrities – or consumers – can verify the claims being made.

“The industry should put up a formal reservoir of knowledge on brands and products where consumers can verify claims,” he argued. “If that platform or network is not in place, none of this will work.”

Sourced from Live Law, Exchange4Media, Business Today; additional content by WARC staff