Government gets tough on endorsements

New Delhi: Celebrity brand ambassadors will soon be liable to be banned from endorsing any product for upto three years and fined upto Rs 50 lakh if the said product is found to be sub-standard or faulty.

According to the new Consumer Protection Bill, which will be presented before the Union Cabinet and would be tabled in the coming Winter Session of Parliament, a celebrity endorsing a product would be held liable for the quality and can be fined upto Rs 50 lakh or even banned from endorsing any other product for upto one year.

The draft of the bill had been cleared by a group of ministers (GoM) headed by finance minister Arun Jaitely. Other members of the group include communications minister Ravi Shankar Prasad, transport minister Nitin Gadkari, heath minister J.P. Nadda, defence minister Nirmala Sitharaman, and railways minister Piyush Goyal besides food and consumer affairs minister Ram Vilas Paswan.

The bill was originally introduced in the Lok Sabha in August last year. It had initially sought a jail term for celebrity brand ambassadors if the advertisements are found to be misleading following the recommendations of a Standing Committee.

However, the GoM decided that instead of jailing the endorsers, they should be fined Rs 10 lakh and slapped a ban of one year for the first offence, and fined Rs 50 lakh and banned for upto three years for the second offence.

The bill replaces the Consumer Protection Act, 1986, aiming to widen the ambit and modernise the law on consumer protection due to changes in markets. It also gives a definition of a consumer as a person who buys a good or hires a service for a consideration. A debate had raged on whether brand ambassadors should be made liable for misleading advertisements and sub-standard products after a ban on Nestle India Ltd’s Maggi noodles. Many celebrity actors like Amitabh Bachchan and Madhuri Dixit had endorsed the product.