Concerns Over Regulatory Vacuum About Surrogate Advertising
Gaurav Saxena (The Leaflet) 22 September 2022
Surrogate advertisements, despite being admonished from time to time and being prohibited, still seem to be aired on the regular. One way out is to provide the ASCI with more power to take action against bad actors. Legal action could also be taken against the broadcasters who choose to broadcast such advertisements.
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Why have certain advertisements aired during recent international cricket tournaments generated controversy?
 
With he rise of mobile-based financial apps since the onset of the pandemic, betting apps have come in vogue. There is now a market for betting platforms in India, and this has naturally led to more advertisements for such services.
 
Of course, betting and gambling are prohibited items in terms of advertising and are also banned in most parts of India, and so this has led to surrogate advertising in the space. These betting platforms, such as Betway and 1xBet, have been constantly advertising on over-the-top platforms during sports events. They have used professional athletes such as former international cricketers Yuvraj Singh and Suresh Raina, for ads. This led to the Union Government issuing a strongly-worded advisory which reads as follows: –
 
“The advertisements of online betting are misleading and do not appear to be in strict conformity with the Consumer Protection Act 2019, Advertising Code under the Cable Television Networks Regulation Act, 1995, and advertisement norms under the Norms of Journalistic Conduct laid down by the Press Council of India under the Press Council Act, 1978
 
This advisory does not seem to have been followed, with there being visible 1xBet advertisements through the recently concluded Asia Cup cricket tournament – advertising its sports blog, with Singh being the face of the campaign.
 
What is surrogate advertising?
 
Surrogate advertising is not a new phenomenon in Indian advertisement. For years, companies dealing with tobacco and alcohol, for example, have had to resort to surrogate advertising in order to get eyeballs on to them – as ads for tobacco and alcohol are as such illegal. It was common to see brands such as Kingfisher advertise non-alcoholic products of theirs such as CDs and sodas, even though these were not real businesses and in essence, consumers were all aware of what Kingfisher’s primary business is.
 
Surrogate advertising is an ingenious method that has been used to bypass rules by advertising a product that is otherwise not legally allowed to be advertised. This is done through creating ads for the brand itself, using celebrities to promote often fictitious products associated with the brand without actually marketing the product that the brand is widely known for.
 
The reason for the rise of surrogate advertisement has been the legal framework in place that prohibits advertisement of certain products. Tobacco products cannot be openly advertised as provided by the Cigarette and Other Tobacco Products Act, 2003, which bans all sorts of advertisements of tobacco and related products. The Cable Television Networks Rules under the Cable Television Networks (Regulation) Act prohibit the direct or indirect promotion, and advertisement of intoxicants such as alcohol and tobacco. The Advertising Standards Council of India (‘ASCI’), a self-regulation council, has a code for self-regulation of advertising content in India. Chapter 3 of this code essentially deals with the advertisement of products considered as hazardous or harmful to society. Clause 3.6 deals with “indirect advertisement”, which is in essence surrogate advertisement, and the ASCI Code prohibits the same.
 
Simply put, surrogate advertising is an ingenious method that has been used to bypass these rules by advertising a product that is otherwise not legally allowed to be advertised. This is done through creating ads for the brand itself, using celebrities to promote often fictitious products associated with the brand without actually marketing the product that the brand is widely known for – for example, in the case of Kingfisher, with its non-advertisable product being its alcohol/beer.
 
Have there been instances of surrogate advertising?
 
There have been several instances of surrogate advertising ever since advertisement of certain products was banned. Bacardi, Imperial Blue, Mcdowell’s (all liquor brands), and Kamla Pasand (a tobacco brand) have all used alternate products to promote their main products – being either tobacco or alcohol.
 
This form of marketing even reached the Indian Premier League, when the Bengaluru franchise, owned by United Spirits (of which fugitive businessman and former politician Vijay Mallya was chairman), went on to name its franchise in the league as “Royal Challengers Bangalore” – an homage to its whisky brand ‘Royal Challenge’. This was immediately challenged in court, on the basis that the name was an indirect way of promoting liquor. However, the petition was dismissed, holding that the name ‘Royal Challengers’ does not necessarily insinuate at a connection to the liquor product.
 
In 2014, social activist Teena Sharma had filed a Public Interest Litigation at the Delhi High Court, seeking a ban on surrogate advertising. She also sought directions from the court to the broadcasting ministry to frame guidelines to take actions against companies violating the Advertising Code. These proceedings, however, were later withdrawn.
 
In 2018, Irish actor and film producer Pierce Brosnan was admonished by the Delhi government after appearing in a surrogate advertisement of Pan Bahar, a pan masala brand. The Delhi government’s Health Department had issued him a show-cause notice as also the pan masala group, asking them why punitive action ought not to be taken against them. Brosnan put out a statement saying he was cheated by the brand and had no intention to partake in advertising. He even appealed to other celebrities to stay away from forms of surrogate advertisement. This incident, of course, brings up the question as to what the liability of a celebrity taking part in surrogate advertisement is.
 
What do the recently notified guidelines on misleading advertisements issued by the Central Consumer Protection Authority say about surrogate advertising?
 
On June 9, the Central Consumer Protection Authority issued the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022, in exercise of its power under Section 18 of the Consumer Protection Act. The guidelines were essentially to prevent false and misleading advertisements, and making endorsements relating thereto.
 
There is some uncertainty as to what is and isn’t allowed under the new guidelines, with stakeholders aiming to have talks with the authorities in order to determine the exact legal status – with some of these companies also having actual real-world products which exist independently of the prohibited product and requiring their own marketing.
The Guidelines define “surrogate advertising” in clause 2(h) as follows: –
 
“… an advertisement for goods, product or service, whose advertising is otherwise prohibited or restricted by law, by circumventing such prohibition or restriction and portraying it to be an advertisement for other goods, product or service, the advertising of which is not prohibited or restricted by law.”
 
Clause 6 of the guidelines deals with the prohibition of surrogate advertising: –
 
“6. Prohibition of surrogate advertising. —
 
(1) No surrogate advertisement or indirect advertisement shall be made for goods or services whose advertising is otherwise prohibited or restricted by law, by circumventing such prohibition or restriction and portraying it to be an advertisement for other goods or services, the advertising of which is not prohibited or restricted by law.
 
(2) An advertisement shall be considered to be a surrogate advertisement or indirect advertisement, if–
 
(a) such advertisement indicates or suggests directly or indirectly to consumers that it is an advertisement for the goods, product or service whose advertising is prohibited or restricted by law;
 
(b) such advertisement uses any brand name, logo, colour, layout and presentation associated with such goods, product or services whose advertisement is prohibited or restricted:
 
Provided that mere use of a brand name or company name which may also be applied to goods, product or service whose advertising is prohibited or restricted shall not be considered to be surrogate advertisement or indirect advertisement, if such advertisement is not otherwise objectionable as per the provisions set out in these guidelines.”
 
These came about as a result of a questionable perfume ad which seemed to promote sexual violence against women. ASCI immediately invoked a special process over it, with the advertiser having to file a response in that instance.
 
The guidelines essentially prohibit surrogate advertising. They also address misleading ads aired during programs meant for children.
 
There is still, however, some uncertainty as to what is and isn’t allowed under the guidelines, with stakeholders aiming to have talks with the authorities in order to determine the exact legal status – with some of these companies also having actual real-world products which exist independently of the prohibited product and requiring their own marketing.
 
With reference to the aforesaid Brosnan matter, the guidelines also place a responsibility on the celebrities to do their due diligence prior to endorsing something.
 
What is the way forward?
 
Advertisers still seem to be getting away with surrogate advertising, which the 1xBet ads are the latest instance of. The way forward is yet to be clarified. Surrogate advertisements, despite being admonished from time to time, and even being prohibited with the recently notified guidelines, still seem to be aired on the regular.
 
One way out is to provide ASCI with more power to take action against bad actors. Legal action could also be taken against the broadcasters who choose to broadcast such advertisements – whether that will happen is doubtful, with even Doordarshan airing the ads being run by 1xBet during the recently concluded India-West Indies men’s international cricket series.
 
(Gaurav Saxena is an advocate, with a keen interest in the intersection between sports and law, currently engaged as a judicial clerk at the Supreme Court of India.)
 
Comments
saharaaj
4 days ago
people find ingenious ways to get around the law . Mostly laws are framed with intent of mischief to extract rent
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