Celebrity Endorsement and Legal Compliance


MacCracken’s (1989) Defines celebrity endorsement, “any individual who enjoys public recognition and who uses this recognition on behalf of a consumer”

 Celebrity Endorsement is a marketing strategy or an advertisement campaign which primarily uses the name and the fame of the celebrity or their social status to promote their Products or Services. The psychology behind this endorsement is that the image of the endorser will be passed on to the Product or the Services. The idea of reaching wider audience or the clients is the idea behind the Celebrity endorsement.

Brand recognition is a used as a part of celebrity branding, where a brand is establish from the attributes of the celebrity. The brands and marketers using celebrities for products like Cosmetics. Electronic equipment's, Food and Beverages, Banking, Insurance, health related products, education etc.

 

Advantages of celebrity endorsement:-

a) Adds Credibility to the Brands,

b) Building Trust,

c) Develop Association and Relationship with Customers,


The number of Celebrity owned beauty brands have grown in the past decade. The Celebrities endorsing for Product and Services can be held responsible and face action for appearing in Misleading Promotion and Advertisement. The featuring of famous Celebrities, Influencers, Actors, Sports Person, Chef’s etc,  get recognition and trust among larger audiences and significant amount of money is also spent on endorsement. The Celebrities reach a larger group of Audience and they develop an association and recall in the mind of Audience. These audiences get converted to Consumers

The advertisement which is endorsed by Celebrity has become a type of testimonials. The Companies pay Millions for such Celebrity Endorsement because they have mass appeal. If the Celebrity endorses that he or she uses the same product, it not only draws the attention of the people but there are consumers who just buy it because a particular celebrity uses it. The diehard and obsessed fan has a tendency of buying the product even when it might not be useful to them. Celebrity endorsement has been turned out to be more successful than the Products endorsed by a Common man.

 It is only a belief factor which encourages the Consumers to buy any such Products or Services. Most ironical fact is that at times products like Yantra is endorsed by a Celebrity which can instill fear and superstition in the minds of a common Consumer and they are compelled to believe that if some Celebrity is endorsing it, it must be worth it. The emotions of the Consumer many a times overshadow the logic. They are mislead by the aura of strong personality for a Product and if a common man would have been endorsing the same Product it would have hardly convinced any common man to buy that Product and Services.


It is the ultimately the Consumer who suffers if the Product shown in the ad does not deliver or causes loss to them by misleading the people.

It become relevant to raise the question what if the Product does not deliver what is promised then should the Consumer be given the right to sue the brand ambassador of the Product or Services or should the liability be only confined to the manufacture of the Product.

What the Law’s Says-

There are certain legislation and certain provision in law which are aimed to protect the Consumers –The Indian Contract act 1872, The Sales of Good Act 1930, The Consumer Protection Act 1986, and India Penal Code 1860.


The most important Law is the Consumer Protection Act 1986, it is to protect the interest of Consumer and settled the Consumer dispute U/S2(r) includes unfair labour practices, including misleading advertisement. This section applies to all advertisement and prohibits the same in case of discrepancy.

 


The establishing of Advertising Standards Council of India (ASCI) 1985 which is a non statutory tribunal, a self-regulatory mechanism for ensuring ethical advertising practices. ASCI are voluntary self regulation organization and its members comprise of Advertiser, Media Agencies and other professions/ancillary services connected with advertises practices.

 In September 2012, the Consumer Complaints Council of ASCI upheld complaints made against 15 out of 22 advertisements; in June 2014 it upheld complaints against 134 out of 147 ads as misleading.

 


Celebrity endorsing Product or Services can be held responsible and face action for appearing in misleading promotion under the Consumer Protection Act 1986, the new frame work also bans Surrogate Ads, a common practice for liquor and chewing Tobacco Companies.

 

MISLEADING ADVERTISEMENT:


Misleading Advertisement giving false Information, false claims, misrepresent the features, content, exaggerate the claims of the Products or Services. Any Advertisement contravening and violating any provision of the legal regulation of the advertising are also misleading advertisement.



It is quite possible that the endorser and influencers might not be aware of the quality, legitimacy and other related aspects of products they endorse.


 





‘Endorsement Know/How’

The department of Consumer Affairs released a set of guidelines for celebrities, Influencers and virtual Influencers known as Endorsements Know/How’s. Guidelines have been framed under Consumer Protection Act 2019 and are issued for the purpose to maintain authenticity and transparency with their target audience. In the case where the advertisement is found to be deceptive or misleading the endorser would be liable and the consumer would not get trap.

Disclosure- The Marketers and Advertisers who have access to the audience and have the power to influence perception and opinion and buying decision of the audience due to celebrity influence with the audience.

When to Disclose:-

Marketers and Advertisers must disclose to its audience if the endorsement is a result of any kind of Monetary, Incentive or Material benefit. Material benefit may include monetary compensation, Hotel Stays or sponsored Trips, Free products, Discount on Products, Media Barters, Gifts, Coverage and Awards, Personal and Private Relationship. The endorser including Celebrity and Influencers must disclose the same.

How to disclose:-

For Images: Discloser is required to be superimposed on the image itself.

For Videos: Discloser is required to be both in audio and video format.

For Live Streaming: Discloser is required to be displayed continually and prominently during the entire Streaming.


Disclosers Features:

·      Simple and understandable language and must be in the same language as that of the advertisement.

·      Terms Such as ‘Advertisement, Ad, Paid Promotions or Paid’ can be used.

·      Terms ‘XYZ Ambassador’ are also acceptable for limited space at platforms.

·       Discloser must be clearly visible and not be mixed with links and Hash tags and must give due diligence before endorsing the product about the Product usage and experience.

 

Due Diligence:

It is been recommended that the Product or Service must actually be used and experienced by the Endorser and Celebrities; they must always review and satisfy themselves that the claims made by Advertiser can be substantiated.

 

Legal Action:


-      In cases of negligence in discloser a penalty of Rs.10,00,000/-  will be imposed,

-      In case of repeated offence the penalty can reached to Rs.50,00,000/-,

-      Discontinuation of the advertisement with the immediate effect,

-      Discontinuation of broadcast of advertisement for 3 years if it is a repeated offence.

-      The penalty could be exempted if the Endorser have claimed and verified about the due diligence on their part.

 

Conclusion:

There is an urgent need to keep a caution regarding promotional measures to be true, acceptable, non-misleading, non- exaggerated and under Legal Rules. The misleading claims not only affect the brand and the Product reputation but also the endorser reputation. The advertisers need to be cautious while selecting celebrity and the celebrity must take due diligence while selecting the company and accepting the proposal for endorsement. In today’s world Consumer is an active participant and the Government has framed clear cut guidelines and any non compliance to the rules is a punishable offence in order to curb the misleading advertisement.

- MAMTA SINGH SHUKLA
(ADVOCATE DELHI HIGH COURT)
MOBILE - 9560044035

Email id - adv.mamtasinghshukla@gmail.com

 

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