Advertisment under Consumer Protection Act 2019

Corporate India Blog - Advertisment under Consumer Protection Act 2019

Today in our quick read blog (No. 04/2020-21), we continue to present an outlook on The Consumer Protection Act, 2019 (‘Act’ or ‘Act 2019’) which has come into force from July 20, 2020 (except the sections yet to be notified) thereby repealing the erstwhile Consumer Protection Act 1986.

Our quick blog will feature this Act in phased manner for next few days. We have covered key highlights of the Act in our previous blog and today our emphasis is on the new definition of the term “Advertisement” introduced in the Act.

Advertisement: From being used only 4-5 times in the previous law, this word has found a whole new meaning and emphasis under the Act 2019 with a separate definition. It means “any audio or visual publicity, representation, endorsement or pronouncement by means of light, sound, smoke, gas, print, electronic media, internet or website and includes any notice, circular, label, wrapper, invoice or such other documents”.

The definition has been vaguely put down in order to cover all possible manners in which any goods or services can be advertised in the modern era of transactions (including wall graffitis as indicated by use of words like smoke, gas, paint, etc.). While the attempt of the draftsmen was evidently to ensure that advertisement of any sort be covered in this definition, they have, in my opinion, failed to connect the dots properly. Use of words like publicity, representation, endorsement, pronouncement, etc. without allotting them proper meaning under the Act makes this definition incomplete and open to interpretational issues. It will be interesting to see in case of goods, which are manufactured and produced by chain of manufacturers and then sold / distributed by various vendors, who shall be the person held responsible for endorsement or representation, when marketing or publicity function is performed at almost each level of sale viz. manufacturer to distributor to traders to retailers. In case of services too, whether a social media platform advertising any services can be held for endorsement of services, in case of default by the service provider. Section 89 states imprisonment for a term of 2-5 years and fine upto 50 lakhs, upon manufacturers and service providers, for false or misleading advertisements. Further Section 21 gives Central Consumer Protection Authority (CCPA) powers to investigate and impose penalty on advertiser, publisher, endorser, and trader also. The provisions seem to strictly impose liability on such persons unless they prove they acted with due diligence and do not have any knowledge of orders passed by CCPA in that regard. This term alone shall bring into place awareness for the endorsers or advertisers as it will be their liability too if advertisement is found to be false or misleading.

Will the small shopkeepers or big super stores be able to put up brand endorsements at their places? What will happen to the big hoarding of fairness creams or lifestyle products? With the new Act rolling down from 20/07/2020, we shall wait and watch to find our answers.