CII whitepaper: No place for another regulator to control misleading advertisements

In the wake of concerns raised by Department of Consumer Affairs (DCA) of the Ministry of Consumer Affairs, Food and Public Distribution, about a need for stronger government intervention in case of misleading advertisements, CII National Committee on Marketing has released a whitepaper on “Self regulation in advertising in India – a critical evaluation.” The paper takes an independent view of the concerns regarding misleading advertisements and critically evaluates the role and responsibilities of all stake holders – regulators, industry, activists and consumers.

To construct an independent view, CII has involved KPMG in India, Amarchand Mangaldas and AZB & Partners as knowledge partners. The concluded analysis has further been substantiated through discussions with various stakeholders – advertisers like HUL, ITC and Godrej Consumer Products Ltd., etc.,  media companies such as Star India and The Hindu and members of the civil society.

According to the whitepaper, the solution to the problems posed by misleading advertisements   is not to add another legislation, in form of an Administrative Authority as proposed by the DCA, to the existing basket of laws. It advocates co-regulation between Advertising Standards Council of India (ASCI) and other regulators such as DCA and Ministry of Information and Broadcasting (MIB) to enforce compliance currently vested with ASCI but without any punitive powers. The paper recommends only in cases of non-compliance of the Consumer Complaints Council’s (CCC) decisions should the matter be referred to the parent regulatory body for further actions.

The whitepaper states that ASCI is committed to the cause of self regulation in advertising and protection of interests of consumers through initiatives such as National Advertising Monitoring Service (NAMS) for monitoring almost all TV and print ads to ferret out misleading ads; and bi-monthly CCC meetings versus monthly ones for speedier resolutions of consumer complaints, the processing time for which is around 4-6 weeks. “We are also evaluating a procedure called ‘Suspension pending investigation’ for highly objectionable advertisements wherein a commercial will be withdrawn till CCC takes a final decision,” explained Sam Balsara, past chairman, ASCI & chairman and managing director, Madison World.

Besides co-regulation and suspension, the paper also suggests some areas of improvements for ASCI including: Mandatory membership of ASCI for all industry players; integrating ASCI code into statutory provisions; and expanding coverage of ASCI code to digital and social media.

According to Balsara, one of the key challenges facing ASCI is the lack of awareness amongst stakeholder specially the consumers. The whitepaper, thus, recommends building awareness about ASCI’s role and code amongst the stakeholders through actively leveraging various media vehicles.

The paper further stresses on an incessant drive to improve the complaints handling system with an emphasis on continuous review and improvements to the system. This will revitalize ASCI as a more efficient and transparent self-regulatory organization.