DUE DILIGENCE: ON SURROGATE ADVERTISING

DUE DILIGENCE: ON SURROGATE ADVERTISING (TH)

General Studies Paper II - under the sections of Governance, Constitution, Polity, Social Justice, and Government Policies & Interventions.

General Studies Paper IV- under Ethics, Integrity, and Aptitude.

Introduction

Surrogate advertising refers to the practice of indirectly promoting a restricted or banned product such as tobacco or alcohol by advertising a legally permissible product like mouth fresheners, silver-coated elaichi, packaged water, or soda under the same brand name, logo, packaging, or visual identity.

 Recent regulatory actions, including notices issued by the Maharashtra Food and Drug Administration (FDA) to prominent celebrities endorsing elaichi products tied to pan masala brands, have highlighted the urgent need to address this issue. The core challenge lies in fulfilling the constitutional mandate under Article 47 to improve public health while respecting commercial speech and fundamental trade freedoms under Article 19(1)(a) and Article 19(1)(g) of the Constitution.

Balancing Public Health Protection and Regulatory Freedom

Balancing stringent public health protections against arbitrary regulatory enforcement poses a significant policy dilemma in India's regulatory framework,

1.       Subverting Tobacco Control: Indirect promotion bypasses the statutory ban under the Cigarettes and Other Tobacco Products Act (COTPA), 2003. By maintaining high brand recall through permissible products, companies preserve market equity for prohibited parent items, undermining national public health goals and non-communicable disease control.

2.      Psychological Impact on Vulnerable Audiences: High-octane marketing and celebrity endorsements create aspirational value around brands. Adolescents and impressionable consumers frequently fail to differentiate between an advertisement for a mouth freshener and the underlying tobacco or pan masala product using identical themes.

3.      Risks to Genuine Business Extensions: Categorising every brand extension as illegal creates uncertainty. A company legitimately expanding into mineral water or lifestyle goods faces harassment if regulators treat every common brand name as a proxy without empirical proof.

4.     Judicial Benchmark on Evidence: In DGHS vs. Som Pan Products Pvt. Ltd. (2024), the Delhi High Court clarified that the State cannot classify an advertisement as surrogate promotion merely because a brand is registered across multiple product categories. Regulators must establish a clear, evidence-based link demonstrating that the ad actively functions as a proxy for a restricted item.

Current Issues and Legal Framework

Surrogate advertising thrives due to subtle marketing tactics, fragmented institutional oversight, and evolving advertising platforms,

1.       Evasion and Determining Intent: Advertisers deliberately blur lines using identical colour palettes, fonts, background scores, and taglines. Establishing legal surrogate intent requires demonstrating market context, expenditure-to-revenue ratios, and consumer perception rather than relying on literal text.

2.      Fragmented Regulatory Architecture: Multiple agencies hold overlapping jurisdictions without a single unified authority,

Ø  COTPA, 2003 (Section 5): Prohibits direct and indirect promotion of tobacco products under the Ministry of Health and Family Welfare.

Ø  Consumer Protection Act, 2019 (Section 21) & CCPA Guidelines (2022): Empowers the Central Consumer Protection Authority to penalize misleading ads, restrict surrogate branding, and hold endorsers liable.

Ø  Food Safety and Standards Act, 2006 (Section 24): Prohibits misleading claims regarding health and food products through FSSAI regulations.

Ø  Cable Television Networks Regulation Act, 1995 (Rule 7): Bans broadcasting ads promoting tobacco, liquor, or restricted goods on television networks.

3.      Deficit in Endorser Due Diligence: Celebrities frequently claim ignorance by stating they endorsed a legal item like elaichi. However, given their public influence, endorsers have a legal obligation under CCPA rules to perform due diligence on the parent brand identity before signing contracts.

4.     Digital Media Monitoring Gaps: The transition from traditional print/TV media to influencer marketing, social media campaigns, and OTT dynamic placements makes real-time tracking difficult for enforcement agencies.

Current Government Measures & Way Forward

Addressing surrogate advertising requires robust enforcement, inter-agency collaboration, and clear evidentiary standards,

1.       Existing Government Actions: The Central Consumer Protection Authority (CCPA) issued explicit guidelines in 2022 defining surrogate ads and restricting brand extensions unless the secondary product has independent distribution and market existence. Enforcement authorities like the Maharashtra FDA have issued show-cause notices to celebrities, while self-regulatory bodies like the Advertising Standards Council of India (ASCI) require proof of independent manufacturing and turnover.

2.      Adopting a Brand Identity Standard: Regulators should evaluate ads using an overall visual identity test. If an ad shares the exact typography, colour scheme, sound logo, and tagline of a restricted product, it must face scrutiny regardless of the physical item showcased.

3.      Mandatory Endorser Accountability: Celebrities and media agencies should execute verified due diligence to ensure the endorsed product possesses genuine market availability, independent sales metrics, and regulatory clearances.

4.     Unified Regulatory Coordination: An inter-agency task force comprising CCPA, FSSAI, Ministry of Health, Ministry of Information & Broadcasting, and state FDAs should formulate standardized operating procedures (SOPs) to eliminate jurisdictional friction.

5.     Evidence-Based Action & Tech Surveillance: Prosecutions must rely on concrete market data and consumer impact studies rather than administrative discretion. Incorporating AI-driven visual surveillance tools can assist in detecting indirect brand placements across digital platforms.

Conclusion

Surrogate advertising in India presents a complex policy challenge bridging consumer protection, public health under Article 47, and commercial speech rights under Article 19. While legal tools like COTPA 2003, CPA 2019, CCPA guidelines, and NTCP provide a robust statutory framework, effective enforcement requires balancing public health protection with regulatory restraint. India can curb indirect brand promotions without causing arbitrary regulatory overreach by enforcing mandatory endorser due diligence, unifying inter-agency coordination across CCPA, FSSAI, and state FDAs, and adopting evidence-based tests for surrogate intent.

SOURCE: https://www.thehindu.com/opinion/editorial/due-diligence-on-surrogate-advertising/article71365211.ece

QUESTION

“Surrogate advertising weakens prohibitionary health policies and constitutes an unfair trade practice." Analyze the socio-economic impacts of surrogate marketing of harmful goods in India, and evaluate the adequacy of current legal measures in curbing brand-recall strategies. (10 Marks, 150 Words).

Introduction

Surrogate advertising circumvents bans on marketing hazardous items such as alcohol, tobacco, and gutka by promoting non-prohibited products (e.g., packaged water, soda, silver-coated elaichi) under the identical brand name, logo, and visual identifiers. This strategy directly undermines public health objectives and market integrity in India.

Socio-Economic Impacts

1.       Public Health Burden: Maintained brand recall sustains consumption of harmful substances, exacerbating non-communicable diseases like oral cancers and liver cirrhosis.

2.      Financial Strain: The healthcare expenditure for managing these chronic illnesses falls disproportionately on low-income households, trapping families in medical debt.

3.      Market Distortion: Established conglomerates leverage massive marketing budgets for extension products, creating an unfair competitive barrier against genuine, compliant small-scale businesses.

Legal Framework & Regulatory Gaps

While the Cable Television Networks Rules and the CCPA's Guidelines for Prevention of Misleading Advertisements (2022) explicitly ban surrogate ads, critical enforcement challenges persist,

a)    Proof of Intent: Judicial precedents often require regulators to prove specific "surrogate intent," allowing brands to claim extension products are legitimate stand-alone businesses.

b)    Revenue Disparity: Genuine sales of extension items (like soda or water) are often fractional compared to the primary hazardous product, proving their primary function is brand preservation.

Conclusion

Strengthening anti-surrogate mechanisms requires imposing strict turnover-ratio tests on extension brands, enforcing standardized plain packaging, and holding media channels jointly liable for hosting deceptive promotions.