Due diligence: curbs on surrogate advertising must avoid regulatory overreach

Why in the News

The Maharashtra Food and Drug Administration (FDA) Commissioner has begun summoning celebrity endorsers of a pan masala brand, treating the endorsement as a surrogate promotion of tobacco. The action moves enforcement from the manufacturer to the person who supplies the brand recall, and it tests whether the state can discharge the burden of proof that the courts have already placed on it.

What is surrogate advertising?

1. Definition: Surrogate advertising is the promotion of a banned product through a legally saleable substitute that carries the same brand name, packaging and visual identity.
2. How it operates: A tobacco or liquor manufacturer registers an extension product such as elaichi, soda or music CDs, then advertises that extension so the parent brand stays visible where direct advertising is prohibited.
3. The legal test: An advertisement becomes surrogate when the substitute product has no market identity independent of its association with the prohibited product.
4. The case at hand: The FDA holds that the pan masala brand endorsed by three leading film actors has no identity independent of tobacco, so endorsing it amounts to endorsing tobacco.

What is endorser liability?

1. Meaning: Endorser liability is the statutory responsibility placed on a celebrity or influencer for a false or misleading claim made in an advertisement they lend their name to.
2. Source of the duty: The Consumer Protection Act, 2019 created this liability along with monetary penalties, which removes ignorance of the manufacturer's intent as a defence.

Why has enforcement shifted from the manufacturer to the endorser?

1. The asymmetry named: The person carrying the persuasive power bears almost none of the health or economic cost of the product being consumed.
2. Where the cost lands: The consumer absorbs that cost, and an underfunded public health system absorbs the treatment burden that follows.
3. Why the manufacturer route stalls: Brand extension is legal on its face, so acting only against the manufacturer leaves the advertisement itself untouched.
4. Why the endorser route bites: Requiring endorsers to explain their decision making applies the endorser liability principle at the enforcement stage rather than only after a complaint.
5. The wider field: The same asymmetry runs through advertisements making unsubstantiated health claims such as "boosts immunity", and through educational and financial products.

What must the state prove before it can call an advertisement surrogate?

1. The governing ruling: The Delhi High Court in DGHS vs Som Pan Product Pvt. Ltd. (2024) held that the state carries the responsibility of proving a case of surrogate advertising.
2. Brand registration is not proof: The mere registration of an extension brand does not by itself establish that the advertisement is surrogate.
3. Legality is not a shield either: The existence of a technically legal product does not automatically permit the particular advertisement built around it.
4. What follows for the FDA: Suspicion must be converted into inquiries under the Cigarettes and Other Tobacco Products Act (COTPA), 2003 and its Rules and under the Food Safety and Standards Act, 2006 that survive judicial scrutiny.

Why does the existing regulatory regime struggle with such advertisements?

1. Fragmentation: Regulation is scattered across a series of Acts and Rules with no single authority owning the surrogate advertising question end to end.
2. Forum shopping: Advertisers use the multiplicity of legal and administrative instruments to draw the judiciary into the dispute and stall enforcement.
3. Definitional gap: No statute defines the threshold at which an extension product's independent market identity becomes real rather than nominal.
4. Health stakes: India carries the world's largest burden of oral cancer, which is what makes treatment of these advertisements as unfair trade practices a consumer health question rather than a marketing dispute.

Does tougher enforcement strengthen the rule or invite regulatory overreach?

1. The case for acting: Penalties or prohibitions in this case would materially narrow the space that surrogate advertising currently exploits.
2. The case for restraint: An action that fails the evidentiary standard set in 2024 becomes a precedent that advertisers cite in every later proceeding.
3. The self defeating outcome: Enforcement seen as arbitrary strengthens the very practice it was meant to end, by converting a public health question into a dispute about administrative excess.
4. The distinction that matters: Targeting the marketing chain is legitimate, targeting individuals without completing the statutory inquiry is not.

Challenges to regulating surrogate advertising

1. Proving the negative: The state must establish that a lawfully sold product has no independent market, which requires sales and distribution evidence that regulators rarely collect. e.g. brand extensions in elaichi and mouth freshener categories report genuine retail sales, which manufacturers cite as proof of independent identity.
2. Split jurisdiction: Tobacco control sits with the health administration, food safety with the FDA and unfair trade practices with consumer authorities, so no single body carries the case through. e.g. the present action begins with a state FDA whose primary statute is the Food Safety and Standards Act, 2006, not COTPA.
3. Digital advertising escapes the frame: Influencer posts and platform advertisements are transient and geo targeted, so they leave little evidence for a later inquiry. e.g. short video endorsements of betting and fantasy gaming platforms circulate widely without the disclosure labels print and television carry.
4. Weak deterrence in practice: Penalties are small relative to advertising budgets and are contested for years. e.g. tobacco control prosecutions under COTPA are typically compounded at low fines rather than pursued to conviction.
5. Sponsorship and event routes: Prohibited categories reach audiences through sports and cultural sponsorship where the brand appears without any product claim. e.g. surrogate liquor branding through music, soda and sporting event sponsorship has continued despite the advertising prohibition.
6. Enforcement capacity: State drug and food administrations are staffed for sampling and licensing work, not for evidentiary media investigations. e.g. food safety officer vacancies in several States leave routine sampling targets unmet, before any advertising inquiry is added.

Conclusion

The action against celebrity endorsers is a defensible extension of endorser liability into the enforcement stage, and it addresses a real asymmetry between who persuades and who pays the health cost. Its survival depends entirely on whether the inquiry under COTPA, 2003 and the Food Safety and Standards Act, 2006 meets the evidentiary standard the Delhi High Court fixed in 2024. A well grounded order would narrow the space for surrogate advertising across tobacco, health claims, education and finance. An unsupported one would leave the practice stronger than it found it.

Advertising Regulation in India

1. What it covers: Advertising regulation governs the content, placement and truthfulness of commercial communication, and reaches the advertiser, the agency, the publisher and the endorser.
2. Mixed model: India uses statutory control for specific product categories alongside self regulation by the Advertising Standards Council of India (ASCI), a voluntary industry body whose code is not itself law.
3. Statutory anchor since 2019: The Central Consumer Protection Authority (CCPA), constituted under the Consumer Protection Act, 2019, can order the discontinuation of a misleading advertisement and impose penalties on the advertiser and the endorser.
4. Prohibited categories: Direct advertising of tobacco products is banned, and liquor advertising is restricted, which is precisely what creates the incentive for brand extension.
5. Scale: India is among the world's largest advertising markets by volume of impressions, with digital and influencer marketing now the fastest growing segment and the least documented.

Laws and Rules Governing Advertising and Surrogate Promotion

1. Cigarettes and Other Tobacco Products Act (COTPA), 2003: Prohibits direct and indirect advertisement, promotion and sponsorship of tobacco products and regulates sale to and around minors.
2. Section 5: Bars advertisement of cigarettes and other tobacco products, including indirect advertisement, which is the provision surrogate advertising is tested against.
3. Consumer Protection Act, 2019: Defines misleading advertisement, creates the CCPA, and imposes liability and penalties on manufacturers and endorsers.
4. Endorser penalty: Provides monetary penalty on an endorser for a false or misleading advertisement, with a prohibition on further endorsements for a stated period on repetition.
5. Food Safety and Standards Act, 2006: Regulates food product claims and advertising, and prohibits misleading claims about the nature, quality or health effect of a food.
6. Cable Television Networks (Regulation) Act, 1995: Bars advertisement of prohibited products on cable television through the Advertisement Code framed under it.
7. Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954: Prohibits advertisements claiming cure for listed diseases and conditions.
8. Central Consumer Protection Authority (Prevention of Misleading Advertisements and Endorsements) Guidelines, 2022: Set conditions for a non misleading advertisement, regulate bait and surrogate advertisements, and fix due diligence duties for endorsers.
9. Endorsement Know hows for digital advertising, 2023: Require celebrities, influencers and virtual influencers to disclose a material connection with the advertiser in a clear and prominent manner.

Government Initiatives in Advertising and Consumer Protection

1. National Tobacco Control Programme (NTCP): Implemented by the Ministry of Health and Family Welfare to enforce COTPA, run awareness campaigns and support cessation, targeted at tobacco users and youth.
2. National Tobacco Quitline and mCessation: Provide telephone and mobile based cessation support to tobacco users seeking to quit.
3. Jago Grahak Jago: Consumer awareness campaign of the Department of Consumer Affairs, aimed at informing consumers about misleading advertisements and grievance routes.
4. National Consumer Helpline and the INGRAM portal: Give consumers a single point to lodge complaints against misleading advertisements and unfair trade practices.
5. Eat Right India: Food Safety and Standards Authority of India (FSSAI) campaign to curb misleading food claims and promote safe and healthy food, aimed at consumers and food businesses.

Key Facts about Tobacco Control and Advertising Regulation

1. World No Tobacco Day is observed on 31 May each year.
2. India has the world's largest burden of oral cancer, which is the health basis for the strict treatment of tobacco surrogate advertising.
3. India is a party to the World Health Organization Framework Convention on Tobacco Control (WHO FCTC), the first international public health treaty, which India ratified in 2004.
4. Pictorial health warnings must cover 85 percent of the principal display area on both sides of a tobacco product package in India, among the largest such requirements globally.
5. The Advertising Standards Council of India (ASCI) was set up in 1985 as a voluntary self regulatory body and its code has no statutory force of its own.

Challenges in Advertising and Consumer Protection Regulation

1. Self regulation without teeth: ASCI rulings bind only members and carry no penalty, so a non member advertiser faces no consequence. e.g. several offshore betting and crypto platforms advertising into India are outside ASCI's membership entirely.
2. Influencer economy outpaces disclosure rules: Paid endorsements are presented as personal opinion, and disclosure labels are omitted or hidden. e.g. financial influencers recommending securities without registration led the Securities and Exchange Board of India to restrict regulated entities from associating with unregistered advice givers.
3. Dark patterns in digital interfaces: Design choices such as false urgency and forced action steer consumers without any express claim to test. e.g. the Department of Consumer Affairs notified guidelines in 2023 listing thirteen specified dark patterns on e commerce platforms.
4. Regulatory capacity gap: The CCPA and State food and drug administrations have small investigation teams against a very large advertising volume. e.g. misleading claims in the coaching and edtech sector produced a separate CCPA advisory only after repeated complaints.
5. Cross border advertising: Advertisements served from outside India for products banned within India are hard to reach through domestic statutes. e.g. offshore betting platforms advertise through surrogate news and sports content channels aimed at Indian audiences.
6. Health claims without evidence: Immunity, weight loss and fortification claims sit between food law and drug law and are contested at the margin. e.g. claims on health supplements and nutraceuticals repeatedly draw FSSAI action for lacking substantiation.

Back2Basics: Food Safety and Standards Authority of India (FSSAI)

1. Governing Act: Established under the Food Safety and Standards Act, 2006.
2. Year established: Constituted in 2008, with the Act's substantive provisions brought into force from 2011.
3. Parent ministry: Functions under the Ministry of Health and Family Welfare.
4. Mandate: Lays down science based standards for articles of food and regulates their manufacture, storage, distribution, sale, import and advertising.
5. Composition: Headed by a Chairperson of the rank of Secretary to the Government of India, with a Chief Executive Officer and members drawn from States, industry, consumer groups and food technology.
6. Enforcement structure: Implemented on the ground by State Food Safety Commissioners, Designated Officers and Food Safety Officers, which is why a State FDA leads the present action.

Way Forward

1. Complete the statutory inquiry: Convert the summons into a documented proceeding under COTPA, 2003 and the Food Safety and Standards Act, 2006 that records evidence of the extension product's dependent market identity.
2. Define independent market identity: Notify an objective test combining sales volume, distribution reach and advertising spend of the extension product relative to the parent brand.
3. Single window coordination: Create a joint mechanism between the CCPA, the health administration and State food and drug administrations so one authority carries a surrogate advertising case to conclusion.
4. Raise the penalty to advertising spend: Link penalties to the advertising outlay of the campaign so the fine is not absorbed as a cost of business.
5. Mandatory pre certification for prohibited categories: Require prior vetting of advertisements for brand names shared with tobacco and liquor products before release.
6. Extend disclosure enforcement to digital: Audit influencer endorsements for the material connection disclosure and publish enforcement outcomes so the rule becomes visible.
7. Consumer side remedy: Publicise the CCPA and National Consumer Helpline routes so complaints against misleading endorsements do not depend on regulator initiative alone.

Matching Previous Year Question

“[2014, GS2, 12.5 marks] The setting up of a Rail Tariff Authority to regulate fares will subject the cash strapped Indian Railways to demand subsidy for obligation to operate non-profitable routes and services. Taking into account the experience in the power sector, discuss if the proposed reform is expected to benefit the consumers, the Indian Railways or the private container operators.”