GoM recommends heavy fine and ban on celebrities endorsing products in misleading ads

A high-level Group of Ministers (GoM) has approved imposing a heavy fine and ban on celebrities who endorse products making unrealistic and dodgy claims.
The GoM headed by Union Finance Minister was tasked to look into the issue of Celebrity endrosement and recommendations of Standing Committee of the Parliament on the recently introduced The Consumer Protection Bill, 2015.
GoM recommendations

• First time offender celebrities should be fined Rs 10 lakh and banned for one year.
• Second and subsequent offenders should be fined Rs 50 lakh and banned for up to 3 year.
• Dropped Standing committee’s proposal of jail term to celebrities found guilty for misleading endorsement.

Background

• The Union Government had introduced The Consumer Protection Bill, 2015 in Parliament to replace the Consumer Protection Act, 1986 to deal with consumer protection and safety.
• The bill proposes tough measures for the protection of consumer rights and providing strict punishment to violators.
• After its introduction it was referred to a Standing Committee, which gave a report suggesting measures like making celebrities accountable for the brands they endorse.
• It also had called for severe penalties such as jail term for celebrities endorsing brands, publishers/broadcasters of misleading advertisements and manufacturers of such products.

Recommendations of Standing Committee

• For the first-time offence, offender celebrities should be penalised with either a fine of Rs 10 lakh or imprisonment up to two years or both.
• For second-time offences, offender celebrities should be penalised with either Rs 50 lakh or imprisonment of five years or both.

What is the issue related to celebrity endorsement?
The issue of accountability of celebrities as brand endorsers was in spotlight after the ban on Nestle India Ltd’s Maggi Noodles over inadequate safety standards and high levels of lead and Monosodium glutamate (MSG). The ban was subsequently lifted. Besides this, some other celebrities, too had faced public ire for endorsing brands that did not meet expectations.

Month: Current Affairs - November, 2016