Proposed Bill Provides Penalties for Advertisers and Endorsers
January 23, 2018 – The Government of India recently introduced a bill in the Indian Parliament to establish a Central Consumer Protection Authority ("CCPA") to regulate matters related to consumers' rights, including false and misleading advertising.
Under the proposed bill, if CCPA determines that an advertisement is false or misdealing, it may require that the advertisement be modified or discontinued and may impose penalties on both the manufacturer and any endorsers. The CCPA may also prohibit the endorser from acting as an endorser of any product or service for a period of up to three years.
"If passed, this new legislation will significantly increase the ability of the government to effectively address false advertising in India," said Sharad Vadehra, Partner of Kan & Krishme in New Delhi, India. "The penalties for endorsers who make misleading claims should also help ensure that celebrities think twice before endorsing products."
The bill provides a defense for endorsers, however, if they have exercised "due diligence" to verify the truth of the claims that they are making.
"This is an important reminder that, around the word, endorsers may be held liable for participating in false advertising," said Jeffrey A. Greenbaum, GALA Chairman & Partner of Frankfurt Kurnit in New York, NY.
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