Ever since the Consumer Protection Bill 2019 was approved by the Rajya Sabha on August 6, a lot of buzz has been created around penalising manufacturers / advertisers and its impact on the ‘business of brands’. From whatever we have observed, the government is very serious about protecting the interest of consumers and will ensure the new bill fulfils its objective. Hence, the advertising fraternity will have to be more mindful of the communication they create; they cannot afford to make mistakes as the consequences will be severe for the brands.
“Honesty in communication will improve consumer awareness of the core brand story. We have seen several instances of brands misleading consumers by masquerading as the real product though not made of such ingredients. This will hopefully come to an end,” says RS Sodhi, Managing Director, GCMMF (Amul).
Consumer protection is always welcome and is a sign of a developed nation. The penalty terms were already made stringent for manufacturers in the previous version of the bill and that continues to hold. At the same time, one can only hope that the execution of the act will be in fair spirit and will also attempt to safeguard manufacturers by adopting a rational balanced perspective than lopsided literal interpretations. For some, this act may also help in identifying frauds and counterfeit cases.
The bill has the right intent and will encourage advertisers and brands to put forth tested and validated claims, invest in testing protocols and hopefully will improve overall product and service quality positively.
“At the same time, a balanced interpretation of the law and execution is needed to ensure that it does not end up being misused, harming the interests of advertisers unilaterally,” cautions Kamal Nandi, Business Head and EVP, Godrej Appliances and President, Consumer Electronics and Appliances Manufacturers Association (CEAMA).
Ironically, there will always be a line between brands consciously trying to overstate their brand and product promise, and sometimes a product genuinely underperforming by sheer exception. The former must be discouraged in every way but then it will have to be proven in court that the brand consciously indulged hyperbole and inaccurate information. But how it gets proven versus a genuine unanticipated underperformance has to be decided after going through the details minutely, experts said.
“The issue that needs to be probed and further explored is what happens when a very small sample of any product doesn’t perform as per the standards it is supposed to uphold — who and to what extent are stakeholders then responsible for. Take for example, automobiles. In the recent past, some very big brands have had to order recalls both in India and internationally. I don’t think it was their intent to put an underperforming product out there but it happened. So, how will the bill act with various stakeholders in such cases?” Karan Kumar, Chief Brand and Marketing Officer, Fabindia, points out.
Fear of 'Licence Raj'
According to the new consumer protection bill, a manufacturer is liable for jail for up to two years with fine up to Rs 10 lakh for the first offence. Consequent offence may lead to five years with fine up to Rs 50 lakh. For some, the bill raises fears of a 'Licence Raj' and corruption, where officials can harass brands and intimidate them.
Fearing the risk, Harish Bijoor, Brand Guru & Founder, Harish Bijoor Consults Inc. suggests a tight control on officials who will implement this. “We need a system of whistle blowers who will blow the whistle when the first such act of corruption is seen and felt,” he says.
While harsh penalties will act as a deterrent, there is a possibility of misuse, especially given the harsh jail-term provisions. So it is important that the legal system and implementers of the law are also sensitive to the potential misuse, the experts said.
D Shivakumar, Chairman, Advertising Standards Council of India (ASCI), however, disagrees with this notion and suggests that we should wait and see the actual framework. However, given that advertisers are answerable to consumer complaints; it would require them to follow stricter norms of internal checks and ethical marketing, he said.
“If the advertiser has followed the clear guidelines laid down by ASCI, which leaves no scope of ambiguity for either lawmakers or advertisers, I don’t see there should be any issue arising for advertisers,” says Shivakumar.
Sodhi too echoes similar sentiments and says that it is nothing, and just an apprehension which law breakers and unscrupulous players can have. “Honest businesses have nothing to worry about.”
Narrow escape for creative agencies
Today brands are operating in a competitive world with multiple players in each segment/ industry. Communicating the value proposition of the product/service has never been more challenging given the high levels of marketing noise and clutter all around. So, communication creativity will now be tested even further in the light of this bill. No stringent laws, however, have been meted out for ‘creative agencies’.
So, isn’t it unfair because creative agencies are the brain behind the ads (misleading or not) and they should be held liable too, we asked.
“Creative agencies create advertisements as per the briefs they are given by the advertisers. In that sense it is only fair that it is the advertiser would be ultimately responsible for the communication and product claims,” says Shivakumar.
According to him, creativity will continue to prosper, ad agencies will not be restrained in any manner as the briefs from the advertisers would be carefully crafted with the ‘dos and don’ts’ in place. Advertising can continue to be creative and entertaining but devoid of false promises or untruths.
In a nutshell, the advertisers will have to put robust internal mechanisms in place for reviewing and approving advertising communication before it is published. If the brand-building process inherently involves honest and truthful communication, there should not be any impact on the business of brands.