-Priyal Pandey
“SACHIN!!SACHIN!!SACHIN!! SACHIN !!”
An evergreen chant to anyone who has watched Cricket Live in a Stadium or on television or heard on radio commentary.Sachin Tendulkar sponsored "Boost" in the 1990s, a milk beverage with the tagline "Boost is the secret of my energy." This increased Boost sales because his little fans would strike a bargain with their parents that they would drink milk if they purchased Boost. Additionally, when Kapil Dev joined the campaign, the tagline was changed to "Our energy," which resulted in a multifold increase in sales.
By purchasing items or services recommended by celebrities, ordinary people might feel a feeling of connection to their idols. This consumer behavior enables consumers to be readily swayed by advertising using their favorite celebrities, coined endorsers.
Each endorsement deal is unique and specific, based on the circumstances and type of endorsement received by the sportsmen. Endorsement is a sort of contract. The athlete's name, picture, or likeness may be used to advertise the sponsor's product or service. An unenforceable covenant is one that goes beyond the limits of the contract's provisions.
Deceptive advertising has long been a hot topic in India. Celebrities endorsing Maggi products (which did not satisfy quality requirements) sparked public outrage. The Food Safety and Standards Act of 2006 forbids food product marketing from making effectiveness claims without appropriate scientific backing. But this Act only applied to food. The need for a comprehensive law holding endorsers accountable for false and misleading claims was highlighted.
CONSUMER PROTECTION ACT,2019
In April 2017, the Advertising Standards Council of India (ASCI) published 'Guidelines for Celebrity Advertising.' These are the guidelines that apply to celebrity endorsements. Advertisements involving celebrities must not be misleading, incorrect, or without justification. Celebrities are defined widely in the Guidelines, and include athletes, physicians, authors, activists, and educators. The Guidelines require that celebrity endorsements and remarks reflect the celebrities' true opinions on the product or service in question. To prevent being misrepresented, a celebrity must do their research.
The absence of a legislative framework was finally remedied in 2018 with the adoption of the Consumer Protection Bill. The 2018 Bill was given a total rewrite. The Bill was passed by the Lok Sabha. The Bill was never introduced in the Rajya Sabha and lapsed into oblivion. The 2018 Bill was later reintroduced as the 2019 Consumer Protection Bill, which was adopted in August 2019 by both Houses of Parliament.
With the Consumer Protection Act of 2019 into effect, endorsers may need to be cautious about their future moves. The new legislation imposes an obligation on anybody promoting a product or service (endorser) to verify[1] the claims made in such marketing regarding the product/standard, service's quality, or performance. Endorsers are responsible for ensuring that their statements are accurate and not misleading. So, endorsers are prohibited from making misleading representations or warranties regarding the products/services they promote. For example, Virat Kohli would need to follow his own due process of verification before promoting healthy protein snacks.
Endorsers who engage in fraudulent or misleading advertising may be directed to cease or alter their statements and representations under the new law. The legislation penalizes product/service endorsers by imposing monetary penalties that are capped at 10 Lakh Rupees but may increase to 50 Lakh Rupees for successive violations. Additionally, the regulator, the Central Consumer Protection Authority (CCPA)[2], has the authority to prohibit the endorser from making future endorsements for a period of up to one year. This prohibition on endorsements may be extended for up to three years in the event of repeated violations of false or misleading advertising.
CONSUMER PROTECTION ACT IN USA
The United States pioneered the regulation of endorsers. Since the 1970s, the Federal Trade Commission (FTC) has regulated endorsement advertisements. In 2000, the Federal Trade Commission issued 'Guides Concerning the Use of Endorsements and Testimonials in Advertising.' These guidelines apply to all forms of media, especially television, print, radio, blogs, and word-of-mouth. The Guidelines prevent endorsers from making claims about a product they have not personally tried. A link between an endorser and a company that sells a product must also be revealed in order to assess the endorsement.
The FTC has the authority to investigate unfair or deceptive practices under Section 12 [3]of the FTC Act, which addresses illegal endorsements and false advertising.The Federal Trade Commission Act established the Bureau of Consumer Protection to address such violations.
The EU suggested a rule focused on deceptive and unfair advertising in 1988, which was created in accordance with current EU legislation and the FTC Guidelines. Additionally, the EU has a self-imposed restriction that celebrities must adhere to in order to avoid advocating for potentially dangerous goods to public health.
Cam Newton[4], the 2011 NFL Draft's #1 overall choice, signed an endorsement contract with Under Armour, allegedly the most lucrative deal ever given to an entering NFL player. Newton inked his endorsement deal before ever playing in an NFL game. For some athletes, multimillion-dollar endorsement deals outweigh competitive sports earnings. In 2010, David Beckham's [5]endorsement earnings grew 30% to $24 million, while his salary with the Los Angeles Galaxy was $6.5 million.
The most famous endorsement deal is between Nike and former NBA star Michael Jordan[6], who later owned an NBA team. Jordan's endorsement relationship with Nike led in the formation of Brand Jordan, a Nike subsidiary. In 2009, the brand produced over $1 billion in revenue, or around 5% of Nike's total revenue.
On January 21, 2011, Brian Casserly [7]filed a class action lawsuit against Power Balance, LLC, its creators, and athlete endorsers Shaquille O'Neal and Lamar Odom in the Central District of California. "Strength, balance, and flexibility" were not physically possible, according to the complaint. The plaintiffs alleged misleading advertising, unfair competition, and unjust enrichment by the defendants. The lawsuit named as defendants not only the company that developed the drug but also the players who promoted it. This court case shows that endorsers can now be sued for the products they support.
American advertising regulators collaborate closely with the Federal Trade Commission to keep violations under control. The United Kingdom is the best example of effective coordination, since the statutory consumer protection body (CMA) and the advertising industry organization (ASA) collaborate to ensure that advertisements adhere to CPRs and CAP. While the CMA is responsible for consumer complaints, the ASA is responsible for advertising complaints. Rather than just enforcing the law, the CMA and ASA provide advice to companies and advertisers.
The CCPA should be established in such a way that it works closely with the advertising industry and ASCI, as its counterparts in other countries do. Its role must be adaptable and sensitive. This would preclude the CCPA from establishing another statutory body in India.
RECOMMDATIONS
Given India's new rules prohibiting misleading ads, particularly those backed by celebrities, the ASCI should do more to educate the advertising profession and urge adherence to its Guidelines.
Recently, brands and organizations have been implicated in consumer fraud. These businesses have used celebrity endorsements to help them market their activities and goods. This issue has sparked debate on the duty of companies in hiring celebrities to entice customers. Endorsers who charge high fees for advertising must fess up to their involvement in unethical business practices. They no longer have the option of claiming ignorance or indemnification. The newly enacted legislation and its enforcement mechanism must send the message that interfering with dirt results in unclean hands.The legislation would instill a feeling of responsibility in celebrities and encourage them to be more cautious when accepting commercial endorsement opportunities. Though celebrities are unable to comprehend the complicated difficulties of product standardization in accordance with statutory standards or to personally inspect the items for quality, they will be obliged to exercise due diligence on their behalf.
[1]S. 2(18), The Consumer Protection Act, 2019 [2]S. 10(1), The Consumer Protection Act, 2019. [3]15 U.S.C. 45(a) (2006) [4]Cam Newton Lands Under Armour Deal, ESPN (July.17, 2021), http://sports.espn.go.com/nfl/news/story?id=6123536. [5]David Beckham Racked Up $24.5M from Endorsement Deals, CBS L.A. (July 17, 2021) http://losangeles.cbslocal.com/2011/10/06/ david-beckham-endorsement-deals-rose-30/ [6]Darren Rovell, Michael Jordan First Athlete to $1 Billion, SPORTS Business REPORT (July 17, 2021),http://www.cnbc.com/id/32798277/MichaelJordan First Athlete To 1 Billion. [7]Casserly v. Power Balance, LLC, No. CV11-00670 (C.D. Cal. filed Jan. 21, 2011)
Comments