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tl;dr
As per MIB’s new rule which went into effect on June 18, 2024, all advertisers and advertising agencies have to obtain a ‘Self-Declaration Certificate’ (“SDC”) for all new ads, including digital ads, that will be published/ broadcasted. Meant to tackle the issue of misleading claims in ads, this move by MIB attempts to fill a policy gap that doesn’t exist with a rushed and, to quite an extent, an unfeasible intervention, thereby increasing compliance burden of advertisers.
Important documents
- IFF’s letter to MIB on SDC dated June 15, 2024 (link)
- MIB’s guidelines for uploading SDC (link)
- MIB’s feature on the Press Council of India’s portal (link)
Why should you care?
As per a recent analysis, ad impressions on digital mediums increased by almost 4 times in 2023 as compared to 2019 and even within 2023, there was a surge of 71% in ad impressions during Quarter 4 over Quarter 1. Another report published in 2020 reveals that the digital advertising market will reach INR 62,045 crore in 2025. The report also reveals that digital media has surpassed television and secures the largest ad expenditure share of 44%, followed by television (32%) and print media (20%). Given the exponential rise previously and currently being witnessed in the digital ads market, we believe that the self-declaration model prescribed by the Ministry will not be feasible for implementation on digital platforms and must be recalled.
Background
On June 04, 2024, the Ministry of Information and Broadcasting (“MIB”) launched a feature on the Press Council of India’s portal that facilitates self-declaration by advertisers and advertising agencies for digital advertisements (“ads”). This move by MIB imposes an obligation on all advertisers and advertising agencies to obtain a ‘Self-Declaration Certificate’ (“SDC”) for all new ads that will be issued/telecast/aired/published on or after June 18, 2024. Advertisers will only obtain the SDC once they have submitted their self-declaration form signed by an authorised representative. MIB has also released Guidelines for advertisers using the Press Council of India portal to upload SDCs. These guidelines list the various details and documents, such as a letter of authorisation and full script of advertisement, that need to be submitted by advertisers in order to obtain their SDC.
Reportedly, the SDC is meant to tackle the problem of misleading claims in ads and to ensure compliance with all relevant regulatory guidelines. This decision by MIB follows a May 07, 2024 directive issued by the Supreme Court (“SC”) in the Indian Medical Association Vs. Union of India [Writ Petition (Civil) No 645/2022], where the SC instructed all advertisers/advertising agencies to submit an SDC before publishing or broadcasting any advertisement. The case pertained to the misleading advertisements published by Patanjali Ayurved.
Noble intentions, misguided actions
We appreciate the Ministry’s efforts to streamline and ease the process by supplying a sample format for the letter of authorisation. Given the rising instances of misleading ads, both on offline and online platforms, we understand the intent and reasoning behind introducing such a guideline. However, the Ministry must reevaluate if these proposed measures constitute a proportionate and feasible response. The prescribed method of self-declaration will undoubtedly increase compliance burden for all organisations, including micro and small entities, and will also increase difficulty for the Ministry as the volume of ads is higher on digital platforms as compared to non-digital platforms. Given that several ads published on digital platforms are automated, the Ministry must consider the infeasibility of implementation of the SDC mandate for such ads.
Notably, MIB met with members of the media and advertising industry to discuss the guidelines. In the meeting, industry members reportedly shared their concerns about the difficulties in implementing the SDC mandate. Notably, the Indian Society of Advertisers (“ISA”) wrote to MIB requesting postponement of the prescribed process until the SC hears the concerns of the ISA about the directive passed on May 7, 2024. In the letter, the ISA lists the complexities and practical challenges associated with the SDC process such as a lack of security for the uploads, lagging, slow uploads, challenges in OTP generation, file size limitation of 1 MB for every creative, signing authority for each creative, duration of validity of the certification, whether every language version, social media message, tweet, reel, AFP, brand integration needs to be certified, etc. We believe that, in general, the Ministry must conduct more broad-based discussions with other relevant stakeholders such as civil society and researchers.
Latest developments
On June 25, MIB met with the media and advertising industry stakeholders including Meta, Google, and ISA where it reportedly acknowledged challenges and concerns raised by them. Stakeholders shared that they witnessed multiple campaign cancellations by brands and a reduction in the number of ads being placed in the week since the SDC regime came into effect.
Suggestions made by stakeholders during the meeting that the Ministry is reportedly considering include simplifying the mechanism of obtaining the SDC and reducing the SDC mandate to certain sectors such as the food and health sectors. MIB has also decided to form a ‘core committee’ with key stakeholders including advertisers to have insights into the industry’s concerns and challenges.
Recent reporting reveals that MIB will soon issue an advisory to ease the rules on self-declaration of advertisements by limiting the SDCs only to ads related to food and health products and requiring advertisers to apply for them only once a year.
Policy 101: don’t fill a gap that doesn’t exist
Since MIB has referred to the SC directive dated May 07, 2024, we cautioned the Ministry in our letter against the introduction of any rushed policy interventions aimed at regulating product endorsement on digital platforms by social media influencers, celebrities, and public figures. We are concerned by the SC’s statements which bestowed equal responsibility on advertisers and endorsers for misleading advertisements. Any attempt to regulate endorsements made by influencers or celebrities in the same/similar way as that of advertisers may lead to consequences for online free speech. It is also worth evaluating if there is indeed a policy gap to be filled here since the Ministry of Consumer Affairs has already released health and wellness guidelines as well as the ‘Endorsement Know-Hows’ guidelines for celebrities, influencers and virtual influencers. These guidelines also require influencers and celebrities to mandatorily make disclosures whenever there’s a material connection “between an advertiser and celebrity/influencer that may affect the weight or credibility of the representation made by the celebrity/influencer”.
We further brought to the Ministry’s notice that the Consumer Protection Act, 2019 already defines and prohibits misleading ads and has a penalty provision of up to 10 lakh rupees on manufacturers, advertisers, and endorsers. Further, the ‘Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022’ notified by the Central Consumer Protection Authority comprehensively lays down the dos and don’ts for as well as duties of advertisers, specifically regarding surrogate ads, free claims, bait ads, and ads targeting children. Given that adequate legal instruments exist to regulate misleading ads and to establish accountability of advertisers, we requested MIB to reconsider the need for such a policy as well as the rushed compliance timeline proposed by the Ministry.