Do Large Advertisers Desire Government Regulation of Advertising?

Often, industry fails to realise that it has a good thing going with self-regulation. By its own actions, it can create a draconian alternative that neither helps the industry, its intermediaries or consumers. After all, retiring bureaucrats are ever eager to propose the setting up of ‘independent regulatory bodies’ which offer them an extension of service at better pay and perks than the best government jobs.

It has happened with the capital market where faction-ridden brokers ran stock exchanges like private clubs. We have five financial regulators, but almost no redress for retail consumers’ grievances. A regulator for the real-estate industry is a crying need due to rampant flouting of rules, harassment of consumers and refusal to self-regulate.

However, the advertising industry has to be the strangest of them all. It is almost as though the industry, which is the big beneficiary of a strong, self-regulatory body, wants to work at damaging the Advertising Standards Council of India’s (ASCI’s) credibility.

For at least 15 years now, I have been part of ‘civil society’ or NGO groups discussing the need for government regulation of false and misleading advertising. The allegation was that ASCI was an ineffective self-regulator. In 2011, the then minister for consumer affairs, KV Thomas also made similar remarks, even as the government was notoriously lax in enforcing a clutch of statues specifically to protect consumers.

Since then, ASCI has sharpened its act considerably. It has expanded its reach by a more systematic process of monitoring advertisements, permitting the filing of online complaints and using social media to increase outreach and awareness. It has also launched an e-learning portal with an online training programme for advertisers and communication professionals. The next step would probably be for ASCI to make it mandatory for marketing executives of member companies and creative and client-service executives of advertising agencies to take this course and understand what is unacceptable advertising and why it is so.

This would probably put a stop to ASCI members, mainly multinational companies (MNCs), behaving like petulant children and dragging ASCI to court when complaints against their advertisements are upheld. Sistema Shyam Teleservices filed cases against two ASCI orders. The first was one where a large number of consumers had found its portrayal of a woman’s birthing process ‘gross and indecent’ and ‘offensive to women’. Yet, it obtained a stay order from the Delhi High Court. The second time, however, its legal action over the speed claims of its Internet service did not work to its advantage.

Amazon, Hero MotoCorp and a water purifier company were others who challenged ASCI’s orders in court. But Reckitt & Coleman (R&C), which makes Harpic and Dettol, has outstripped all—with four cases. Interestingly, R&C, which thinks ASCI’s processes are biased, has no problem using its fast-track mechanism to complain about its competitors. Another set of entities, which has challenged ASCI in court, are teleshopping channels who mint money by allowing a slew of unknown companies to market magic potions and miraculous remedies through actors and television stars.

Strangely, this flurry of cases by MNCs with mega advertising budgets comes at a time when ASCI’s credibility is actually at an all-time high. The information & broadcasting ministry has made the ASCI Code a part of the Cable Television Networks Act, thereby making it mandatory for television channels to comply with the Code.

In 2014, the ethics committee of Medical Council of India also strongly backed ASCI’s effort against fake advertisements. On 18 March 2015, the department of consumer affairs launched a web portal called ‘Grievances against Misleading Advertisements’ with a focus on agriculture and food, health, education, housing, financial services and e-commerce.

Someone has to tell these bulge-budget advertisers that if they prefer a government regulator to sit in judgement on their advertisements, it would ratchet up their costs, compliances and disclosures, not to mention delays and endless red-tape which will impact creative freedom. Given the utter lack of accountability of almost every statutory regulator set up by the government, we know for sure that it would not help either consumers or advertisers. Maybe it is time for the industry to get together for some blunt-speak.

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