This article is written by Aakansha Gupta

Endorsement is seen as a platform for displaying the characteristics and usages of a product, and extract comparsion with other products with “invitation to offer” with the product or service by communicating there presence through celebrity personalities attracting attention. In the case ofDonoghue v. Stevenson [1]is still considered as the landmark on the manufacturer’s negligence and absence of any contractual obligations towards with the consumers making him responsible towards the ultimate beneficiary, the ratio and obiter should be analysed as they look similar. Subsequenly after the case of Nestles’ Maggi brand, there has been a look out at the existing liability regime for the celebrity endorsers of such products. 

The inflow of consumables in the free competitive market, fabrication of analytical data, misleading and artificial promising results often manipulate consumer’s choice and preferences that leads to affecting the rights and claims of healthy and consumer friendly products and income validation and habit consumerism. It is the celebrity who is the face of the product. Consistently, the name of the celebrity becomes equivalent with the product be it Amitabh Bachchan for Cadbury or Aamir Khan for Titan. The purpose of this research is to analyze the extent of liability of endorses of a brand keeping in mid the recent Consumer Protection Bill, 2019[2]. This article highlights the precedent cases which established the importance of liability of endorsers. The paper emphazises on the fact that before endorsing a brand the actor/actress should perform a due diligence report on the product so there is no room for misleading advertisement.

Introduction

In 21st century the advertisment and entertainment industry has taken a drastic turn and has become more organised and by coming up with innovative ideas. The advertisements are created in such a way that they influence the opinions of the public and sometimes people get emotionally engaged and form a bond. Nowadays, a majority of brands irrespective of there category in which they fall the products and services they seek prominent celebrity to endorse there brands and through celebrity endorsements attach themselves to the reputation and familiarity associated with the celebrity. In essence, the integrity attached with the celebrity’s name is extended to the brand endorsed by it and enhances the brand’s value by leaps and bounds. The relationship between these celebrity endorsers and the manufacturers/producers of the goods is governed by an endorsement contract performed between the two parties, which generally indemnify the celebrities of any liability incurred with respect to such commercials/ advertisements.

The Extent of Liability of Endorsers

LIABILITY OF BRAND AMBASSADOR

The Consumer Protection Act, 2019 this Act has been created to protect the interest of consumers and settlement of consumers’ disputes. As per Section 2(1) of the Bill defines the word “advertisement” that includes any audio or visual representation. From manufacturing to the sale of a product, it is not only the endorser who makes the audio-visual representation but the local retailers as well

This Act fixes liability on endorsers considering that there have been various incidents in the past where consumers have been fallen prey to unfair trade practices under the influence of celebrities acting as brand ambassadors. Proceeding further, the endorser needs to take the onus, and compulsorily should exercise due diligence, to evidence the veracity of the claims made in the advertisement to deny liability claims. Nonetheless, the word “endorser” is not yet defined in the Bill. Though the endorsers have the part to play in influencing the customers to purchase the product.

The Central Consumer Protection Authority[3] is established to act as a regulator for consumer-related grievances. This is the initial stage as the regulator have th power take action against misleading advertisments. Advertising Standards Council of India (ASCI)[4] is a self-regulatory organization for providing guidleines for the advertisement industry in India. Though these guidelines are not followed by the companies/organizations and the endorsers as they are not binding to these regulations. Section 21(1) of this Bill[5] provides for the power of the Authority to discontinue any advertisement which is misguiding or prejudicial to the interest of consumers. The power of the Authority further extends to imposing a penalty of up to ten lakh rupees, with additional power to prohibit the endorser from doing any advertisement for a year. With these extensive powers, the regulator would be able to administer advertisements.And Section 21(5) of this Bill states that if the endorser has exercised due diligence, then he will not be liable for any claim arising future. Expecting the endorsers to be informed of the scientific and effects of the product which generally come into notice only after the launch of the product would be like expecting too much from the endorsers

In Cooga Mooga, Inc. v. Charles E. Boone[6], the (Federal Trade Commission) FTC is a US base commission formed for protecting of consumer interest, it is an antitrust law that decided if the celebrity is not in a position to examine the authenticity of the statements made, he will be required to hire an independent agency for the same.

The distinction between Endorsement and Acting in an Advertisement

If we see both the terms through an enclosed space endorsement and acting in an advertisement consist of a fine line difference but a parallel in nature. Section 2(18) of CPA highlights that an “endorsement” would cause the consumer to believe that the endorsement influences opinions, or experience of the person making the endorsement. However, this should be a well-grounded defence for an actor accused of being the endorser in a misguided advertisement to state he/she is not an endorser for the purposes of the Section.

In US. The Federal Trade Commission [7]makes a distinguish between “paid actors” and “endorsers”. The commission stated that not all paid actors can be termed as endorser of product or brand. But, a paid actor is equivalent to any model who acts as a representative for the brand.

But on the other hand an “endorser” is one step forward to confirm that they perosonally trust the brand and affirm for it. Though there is no as such distinction between endorsers and brand ambassadors under CPA.

The following may be considered as the grounds for an actor to distract a fine under Section 21 r/w Section 2(18) of CPA-:

• In an advertisement, the actor was playing the role of a person very different from the actor’s personality in real life.

• The advertisement illustrated a situation which was unrealistic in nature, such as perfectly washed clothes or teeth gleaming so brightly, that it can’t be considered in any earnestness to be point of view of the entertainer.

• Appropriate disclaimers preceded or succeeded the advertisement.

Applicability of Doctrine of Estoppel

LIABILITY OF BRAND AMBASSADOR

The doctrine of estoppel is treated a a rule of equity[8]. It states that when one person, by act or omission, intentionally lead to another person to believe a particular thing, and he is not allowed to withdraw from previous stated stand. The major chunk of consumers especially in India purchase the product taking into consideration the appearance of celebrity in the advertisments. The consumers are influenced to purchase the product because they have trust on the celebrity and also the claims in reference to the product in the advertisment. It was long established under the doctrine that endorsers are liable. The major objective of the advertisers is to satify the consumers they deploy celebrities and to increase the brand value. [9]

But sometimes celebrities persist on keeping a clause of reimbursement in their contract of endorsement that is signed with the company as to cover any kind of pecuniary liability arising of any incident especially after a lot of heated debates on the Maggi case. [10]

Impact of Liability on Brand Ambassadors

There are many previous cases in the advertisement industry that took place and broke the trust of the brand ambassadors to advertise for products. If the advertised product consumed by any consumer and turns out to be not reliant, defective or harmful it fixes a liability on the brand ambassadors as they have endorsed the product and there brand value seems to decline for a period of time. Many celebrities have landed in trouble in past because of ambiguous advertisements.

Amitabh Bachchan, Madhuri Dixit and Preity Zinta have landed in trouble in the past over misleading advertisements.They were associated with Nestle’s Maggi and many legal cases were filed against them after reports surfaced that the noodles contain Monosodium glutamate (MSG), an additive that enhances the flavour of food, and lead.

In 2012, an FIR was filed against actress Genelia D’Souza on charges of cheating customers through a real-estate venture called Anjaniputra. She was its brand ambassador. Many customers said they booked the flats as the actress was associated with the company. In her defence, D’Souza said that she was not the company’s brand ambassador but had only done a one-day shoot for the company.

The most famous Amrapali Group controversy, MS Dhoni had landed in trouble. Experts say that Dhoni, being the face of the brand, did attract many buyers. He was the company’s brand ambassador for six years but stepped down after the controversy came to the fore.[11]

The endorsement for a brand of Kellog’s for cornflakes by the famous Indian actress Deepika Padukone allows millions of viewers to instantly associate with the product, drawing affirmation from the appearance that an actor of a great repute lost weight by consuming the said product. Likewise Madhuri Dixit, a renowned Indian actor and mother of two children, claimed health benefits of particular noodles while offering the same to her on-screen children imparting a sense of assurance with respect to the quality of the product to millions of viewers.

Conclusion

Comprehensively the 2019 Bill has been a milestone with an objective of the protection of the consumer’s interest. Though, now it is just a beginning but there is a long road of improvement to witness. But the extent of liability of brand embassadors under the Consumer Protection Bill is too much as they are just acting in the advertisements. There are many regulatory authorities which lay down guidlelines for advertisements but the sad part is many organizations don’t follow it. Though, there is a silver line difference between acting in an advertisement and being an endorser. But it all the paid actors are not endorsers of a brand. Then there is applicability of doctrine of estoppel, it was stated that all endorsers act as ambassadors of the brand. There are many cases which have shaped the concept of liability of brand ambassadors.


[1] Donoghue v Stevenson 1932 UKHL 100

[2] Consumer Protection Act, 2019, No. 35 ,Acts of Parliament, 2019(India)

[3] Constituted u/s 10(1) of Consumer Protection Act, 2019

[4] Advertising Standards Council of India (ASCI), 1985

[5] Supra Note. 3

[6] Cooga Mooga and Charles E. Boone, 17 AM. Bus. L.J. 531, 533 (1980).

[7] Federal Trade Commission, 1914

[8] Indian Evidence Act, 1872 No. 1 Acts of Parliament(1872)

[9] S.Anchal; “BRAND AMBASSADORS ENDORSING BRANDS :A CASE STUDY OF TELECOM COMPANIES IN INDIA”; Banaras Hindu University; Vol. VI; 2010

[10] M/S. Nestle India Limited vs. The Food Safety WRIT PETITION (L) NO. 1688 OF 2015

[11] Ultra Home Construction Pvt. Ltd. Vs. Purushottam Kumar Chaubey

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