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LIABILITY OF CELEBRITIES IN ADVERTISING: WHO IS RESPONSIBLE WHEN A PRODUCT FAILS TO MEET STANDARDS?

INTRODUCTION

In today’s consumer-driven society, advertisement plays a crucial role in promoting products and influencing consumer behaviour. Celebrities are often used in advertisement campaigns to promote the product and enhance the brand’s image. However, with the rise of social media and the increasing importance of consumer trust, there are many questions arising about the liabilities of celebrities in advertising and what happens when a product fails to meet the promised standards. In this blog, we will explore the role of celebrities in advertising and the responsibilities of celebrities and manufacturers in evaluating liabilities.

ROLE OF CELEBRITIES IN ADVERTISEMENTS

Celebrities play a significant role in the advertisement due to their ability to attract attention and influence consumer choices. According to MarketWatch [1] , a celebrity endorsement can increase sales by 4% almost immediately. Celebrity endorsements, as they are commonly known, involve the association of a well-known personality with a brand or product to enhance its appeal to consumers.

There are several reasons to use celebrities for advertising. One of them is that celebrities bring a strong fanbase with them that can instantly increase the visibility and reach of the brand they are endorsing. Celebrity endorsement brings particular influence to the product, while the brand information transmitted by celebrities is often more convincing compared to the information conveyed by non-celebrities [2] . When a consumer sees their favourite celebrity as the face of the brand, they are more likely to trust and relate to that brand. This influences their choices, brand associations, and even social behaviour.

PRODUCT LIABILITY AND CONSUMER PROTECTION LAWS

Product liability refers to the legal responsibility of manufacturers and advertisers for any harm or damage caused by their products [3]. It is the legal obligation of manufacturers and endorsers that they meet certain standards and provide accurate information to their consumers. This involves accepting legal responsibility in cases of physical injuries, financial losses, or property damages from defective or unsafe items.

The Consumer Protection Act, 2019  [4], plays a vital role in safeguarding the rights and interests of consumers and provides guidelines and standards for product safety, labelling, and advertising. The law provides the right to consumers to seek compensation or remedies in case of defective products or misleading advertisements. The guidelines issued by, the Central Consumer Protection Authority [5] states that “Any endorsement in an advertisement must reflect the genuine, reasonably current opinion of the individual, group or organisation making such representation and must be based on adequate information about, or experience with, the identified goods, product or service and must not otherwise be deceptive.”

The importance of product safety and quality standards cannot be overstated. Upholding these standards is not only important to protect consumers from potential harm but also to maintain the reputation and credibility of manufacturers and endorses.

RESPONSIBILITY OF MANUFACTURERS AND CELEBRITIES

Celebrities as brand ambassadors play a crucial role when endorsing a product. As the face of a brand, celebrities hold significant influence over consumer perceptions and purchasing decisions. Consumers often tend to be influenced when an attractive celebrity endorses a company. As a result, consumers positively respond to relevant products  [6] . While endorsing a product, consumers often interpret their endorsement as a sign of quality and reliability.  Endorsers, especially celebrities, feature in advertisements to promote products and services. This has a massive impact on the average consumer. As consumers deeply trust some celebrity endorsers and follow them. [7]

It is essential for celebrities to recognize this power and carefully consider the product they choose to endorse. Celebrities need to represent the brands that align with their personal views, a good fit between celebrities and product nature increases the advertisements’ persuasive power and publicity effectiveness [8] . Celebrities must research the product they endorse, examine ingredients, and evaluate their quality and safety. Celebrity endorsers have a responsibility to ensure the advertisements they appear in are truthful, honest, and free from misleading claims that can be verified through independent and scientific scrutiny. Both the ASCI code and the Consumer Protection Act, 2019 mandate that endorsers take measures to ensure that the representations they make in advertisements do not deceive consumers.[9]

EVALUATING LIABILITIES IN CASE OF PRODUCT FAILURE

Evaluating liability in cases of product failure. In 2016, Nestle India had to withdraw its popular Maggi noodles from the market after tests revealed high levels of lead, and MSG and Bollywood actress Madhuri Dixit, who had endorsed the product, faced a class-action lawsuit and public backlash [10]. This case raised questions about the responsibility of celebrities in endorsing products and their duty to ensure the safety and quality of the items they promote.

In a recent case involving Byju and Shahrukh Khan, where both were fined 50,000 by District Consumer Commission and ordered to return the fees deposited by the student for not meeting teaching standards and engaging in false advertisement. [11]

It is difficult to determine the liability of celebrity in endorsement because celebrities can be held liable for misleading claims about the product but they cannot be held liable for the product itself. Mostly, it is the responsibility of the company manufacturing products to ensure their safety and quality.

However, it is the responsibility of celebrities to ensure that the product they are endorsing is safe. They should review and verify the claims that would be made in the advertisement and ensure that they are not misleading.

MITIGATING RISKS AND BEST PRACTICES

The Annual Complaints Report of 2022-23 [12], released by the Advertising Standards Council of India (ASCI), sheds light on the increasing number of complaints against misleading advertisements. Surprisingly, a significant 55% of the complaints received by ASCI were against advertisements featuring celebrity endorsements during that period. To reduce these increasing cases, it is important that before entering into endorsement deals, celebrities conduct thorough research to minimize the potential risk to their image.

To further mitigate risks, manufacturers must prioritize product testing and quality checks. The guidelines provided by Central Consumer Protection Authority (CCPA) [13]   should be followed to ensure that the advertisements are truthful and are not misleading. By implementing effective measures, such as increased product testing, quality checks, and comprehensive research prior to entering endorsement deals, the industry can work towards reducing the occurrence of misleading advertisements.

CONCLUSION

In the dynamic world of celebrity endorsements and product advertising, liability for product failures requires careful consideration. Celebrities and manufacturers both share a responsibility to ensure that products meet established standards and accurately reflect their claims. Upholding ethical advertising practices, prioritizing consumer protection, and fostering accountability are crucial for maintaining trust in the marketplace. By adhering to best practices and fostering a culture of responsibility, celebrities and manufacturers can work together to deliver high-quality products that meet and exceed consumer expectations.

Author(s) Name: Yashika Saxena

Reference(s):

[1] MarketWatch, https://www.marketwatch.com/ accessed 23 May 2023

[2] Lili Zhai, Abdullah Al Mamun, Naeem Hayat, Anas A. Salamah, Qing Yang and Mohd Helmi Ali, ‘Celebrity Endorsement, Brand Equity, and Green Cosmetics Purchase Intention Among Chinese Youth’ (Original Research, 07 March 2022) https://www.frontiersin.org/articles/10.3389/fpsyg.2022.860177/  accessed 23 May 2023

[3] Bieber, Christy, ‘ What Is Product Liability? (2023 Guide) ‘ (Forbes, 26 October 2022) https://www.forbes.com/advisor/legal/product-liability/what-is-product-liability/ accessed 23 May 2023

[4] https://egazette.nic.in/WriteReadData/2019/210422.pdf accessed 23 May 2023

[5] ‘CCPA Guidelines’ (Advertising Standards Council of India, September 2022) https://www.ascionline.in/wp-content/uploads/2022/09/ccpa-guidelines.pdf  accessed 23 May 2023

[6] Lili Zhai, Abdullah Al Mamun, Naeem Hayat, Anas A. Salamah, Qing Yang and Mohd Helmi Ali, ‘Celebrity Endorsement, Brand Equity, and Green Cosmetics Purchase Intention Among Chinese Youth’ (Original Research, 07 March 2022) https://www.frontiersin.org/articles/10.3389/fpsyg.2022.860177/  accessed 23 May 2023

[7] ‘Endorser Due Diligence’ (Advertising Standards Council of India) https://www.ascionline.in/endorser-due-diligence/  accessed 23 May 2023

[8] Lili Zhai, Abdullah Al Mamun, Naeem Hayat, Anas A. Salamah, Qing Yang and Mohd Helmi Ali, ‘Celebrity Endorsement, Brand Equity, and Green Cosmetics Purchase Intention Among Chinese Youth’ (Original Research, 07 March 2022) https://www.frontiersin.org/articles/10.3389/fpsyg.2022.860177/  accessed 23 May 2023

[9] ‘Endorser Due Diligence’ (Advertising Standards Council of India) https://www.ascionline.in/endorser-due-diligence/  accessed 23 May 2023

[10] Vahanvati, Aliefya, Sabherwal, Simran, and Varanasi, Anuradha, ‘The Case for Responsible Endorsement’ (Impactonnet) https://www.impactonnet.com/amp/impact-feature/the-case-for-responsible-endorsement-3821.html  accessed 23 May 2023

[11]  ‘Indore: BYJU’s and Shah Rukh Khan Fined Rs 50k Each for Not Meeting Teaching Standards, False Advertisement’, (Free Press Journal,29 April 2023), https://www.freepressjournal.in/indore/indore-byjus-and-shah-rukh-khan-fined-rs-50k-each-for-not-meeting-teaching-standards-false-advertisement  accessed 23 May 2023

[12]  ‘Annual Complaints Report 2022-23’ (Advertising Standards Council of India, May 2023) https://www.ascionline.in/wp-content/uploads/2023/05/Annual-Complaints-Report-2022-23.pdf accessed 24 May 2023

[13] ‘CCPA Guidelines’ (Advertising Standards Council of India, September 2022) https://www.ascionline.in/wp-content/uploads/2022/09/ccpa-guidelines.pdf  accessed 23 May 2023