We are all familiar with the quirky and satirical advertisements of ‘Men Will Be Men’ for Seagram’s Imperial Blue Superhits Music CDs. Needless to mention, the brand “Imperial Blue” is in fact a popular brand of Indian whisky, owned by Pernod Ricard and launched in the year 1997. Since Indian law prohibits advertisements that promote, directly or indirectly, production, sale or consumption of cigarettes, tobacco products, alcohol in India, these producst are advertised throgh surrogate adversiting or brand extension.

Time and again there have been numerous case laws, Court rulings and Govt. notifications prohibiting/regulating advertisement of these products in India. ASCI, the self-regulatory body of advertisements in India, has been playing a proactive role in this regard thereby keeping all these ads in check.

Evolution of Surrogate Advertising in India

In India, the Ministry of Information and Broadcasting (I&B), through The Cable Television Networks (Regulation) Act, 1995 (‘Act’) and The Cable Television Networks Rules, 1994 (‘Rules’) as well as other policies and guidelines issued from time to time, has been regulating content on private satellite channels, network of multi system operators, and local cable operators (LCOs).

Rule 7 of the Rules prescribes the advertising code which has to be conformed to by cable operators while broadcasting advertisements through their cable service. Rule 7(2) specifically enlists advertisements that cable operators would not be allowed to broadcast. Rule 7(2) prohibits advertisements that “promotes directly or indirectly production, sale or consumption of cigarettes, tobacco products, wine, alcohol, liquor or other intoxicants.”

A proviso to the above Rule was inserted through an amendment on August 9, 2006 [G.S.R. 469 (E)][1], which permitted advertisements of products that use a brand name or logo, which is also used for cigarettes, tobacco products, wine, alcohol, liquor, or other intoxicants, subject to conditions that (i) the story board or visual of the advertisement must depict only the product being advertised and not the prohibited products in any form or manner; (ii) the advertisement must not make any direct or indirect reference to prohibited products; (iii) the advertisement must not contain any nuances or phrases promoting prohibited products; (iv) the advertisement must not use particular colours and layout or presentations associated with prohibited products; (v) the advertisement must not use situations typical for promotion of prohibited products when advertising the other products:

“Provided further that all such advertisement shall be previewed and certified by the Central Board of Film Certification (CBFC) suitable for unrestricted public exhibition prior to telecast or transmission or retransmission.”

Timeline of Various Orders by the Government Pertaining to Surrogate Advertising

  • A notification[2] issued by the Ministry of I & B on February 27, 2009, had stated that such ads found to be “genuine brand extensions” shall be previewed and certified by the CBFC.
  • Another directive[3] that was issued on June 17, 2010, was quite blunt on the rules as it directed all TV channels to stop carrying any ad of a product that even used a brand name or logo used for wine, alcohol and liquor. According to this directive, it looks that even though any other product was being advertised, the ad will be prohibited if it contained the name of an “alcoholic beverage” company.
  • Recently, the Ministry of I & B on September 15, 2020, issued an advisory[4] with a view to curb surrogate advertisements, saying that such ads are to be previewed and certified by the CBFC to ascertain whether they are suitable for unrestricted public exhibition and are in accordance with stipulated conditions. This is the latest order by the government in this regard.

Is the Advisory binding in nature?

  • The question which arises here is that whether such “advisories” issued by the Ministry of I & B are binding on the parties. The Court in the case of Kritika Padode v. Union of India & Anr.[5] had established that an advisory is not a legally binding order. The court had mentioned that they were just “mere advice to the private satellite TV channels”.
  • Also, in the 2019 Allahabad High Court Judgement, Struggle Against Pain v. State of U.P.[6] where the main issue pertained to “Surrogate Advertisement”, there was no mention of a CBFC certificate being required.

ASCI Code

Rule 7 sub-rule (9) was amended[7] on August 2, 2006, which made the Advertising Standards Council of India (ASCI) Code compulsory for the regulation of television advertisements. The ASCI is however a self-regulating body for advertising and primarily has the power to pull up an advertiser for any violations against the advertising code. The Code does not though explicitly mention the requirement of a CBFC certificate to advertise something “surrogate”.

The ASCI[8] has provided guidelines for the qualification of brand extensions, which are:

  1. The product or service should be registered with an appropriate government authority eg Central Value Added Tax (CENVAT)/ Value Added Tax (VAT)/ Food and Drug Administration (FDA)/ Food and Safety Standards Authority of India (FSSAI)/ Trade Marks Registry (TM).
  2. The availability of the surrogate product in the market must be at least 10% of the leading brand’s market share as measured in metro cities where the product is being advertised.
  3. The sales turnover of the product or service should exceed Rs 5 crore per annum pan-India or Rs 1 crore per annum per state where the distribution has been established.
  4. A valid certificate must have been obtained from an independent organisation such as AC Nielsen or a category-specific industry association before advertising.

This has yet again been notified in a Press Release recently issued by ASCI on November 2, 2020[9]. The Press Release reiterated that advertisements for brand extensions could not feature anything prohibited by law or that pertained to banned products nor could it refer to or hint at such products. The Press Release was issued to keep a check on advertisements that were being broadcasted during the IPL. Further, the IPL broadcaster also confirmed that all advertisements were checked for CBFC clearance so that they are not in violation of the Act.

The ASCI further sought responses from advertisers, within 7 days, to validate their claims of their product or service being a genuine brand extension, which included sales, distribution and market share data certified by an independent body. The advertisement was to be allowed to continue only if it met the criteria for a genuine extension. However, if no response was received, then order would be passed ex-parte.

ASCI Rulings

The Consumer Complaints Council (CCC) set up by ASCI handles complaints pertaining to advertisements that come before the ASCI. On perusing complaints for the year 2019-2020, there were 12 rulings related to surrogate advertising and brand extensions. Based on the cases, it may be inferred that ASCI places emphasis on adherence to its Guidelines for Qualification of Brand Extension Product or Service.[10]

Consumer Protection Act, Rules & Guidelines

The draft Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Guidelines, 2020, was issued in August 2020, by the Central Consumer Protection Authority (CCPA) in the exercise of the powers conferred by clauses (c) and (d) of sub-section (1) of section 18, read with clause (l) of sub-section (2) of section 18 of the Consumer Protection Act, 2019 (Act 35 of 2019) (CPA).

The draft guidelines have been framed for the prevention of false or misleading advertisements as well as due diligence to be carried out for endorsements. Hence, the scope of the guidelines pertains to all advertising/ marketing communications regardless of form, format or medium and apply to manufacturers/service providers whose products/services are the subject of the advertising/marketing communications, as well as to advertisement agency and endorser (wherever applicable) of the product/service.[11]

The draft guidelines under Rule 8 have also included Surrogate Advertising. Further, the guidelines state that the provisions of the CPA would apply for any violations of the provisions of the guidelines. Hence, we can gather that should there be any contraventions to the guidelines once it is notified, the CPA would have the powers to impose penalties on the manufacturers or endorsers.

Conclusion

It may be noted from the Cable TV Act & Rules that the amendment was made to permit surrogate advertisements for genuine brand extensions, but solely with such advertisements being compliant with the requirements provided therein and in the ASCI Code. Hence, one such prerequisite is that the advertiser needs to obtain a certificate from the Central Board of Film Certification (CBFC) for such advertisements to be allowed on the cable service. This has again been reiterated in several notifications issued by the Ministry of I & B and ASCI.

From the above rulings and the press release, it can be gathered that ASCI has come down heavily on advertisements for even the slightest of references to banned products (such as alcohol and the like) in their surrogate advertisements. Hence, adhering to such requirements provided in the Rules, Code and other related guidelines/notifications issued from time to time may be the way to ensure that such advertisements are displayed to the public. The ASCI being a self-regulatory body has no powers to penalize the advertisers and may only have them modify or remove their advertisements should they not comply with their Code. However, under the draft guidelines issued by CCPA, which has defined surrogate advertisements, directions could be issued, and penalties could be imposed against false or misleading advertisements by manufacturers/endorsers. Based on this, we would have to wait and watch on how both bodies would work together or if the powers of the ASCI for false and misleading advertisements would decrease.