The Ministry of Consumer Affairs released a draft of the “Central Consumer Protection Authority (Prevention of the Misleading Advertisements and Necessary Due Diligence of Endorsement of Advertisements) Guidelines, 2020”. The guidelines cover, “all types of advertising/ marketing communications regardless of form, format or medium”. It is applicable to manufacturers, service providers, as well as to advertisement agencies and endorsers of products/services.

The guidelines lay down the criteria of valid advertisement, which includes, inter alia, truthful and honest representations; not misleading consumers by exaggerating the capability or performance of the product; not suggesting that the claims made in it are universally accepted.

The guidelines permit comparative advertising if “…factual, accurate and capable of substantiation… not present a good or service as an imitation or replica of a good or service with a protected trademark or trade name”. The guidelines lay down that comparative advertisement in which the competitor is named is permitted in the interest of promoting competition, but the features of the advertiser’s products need to be specified clearly within the advertisement and the subject matter of the comparison shall not be of the nature that confer an artificial or unjustifiable advantage upon the advertiser.

The guidelines also deal with the issue of misleading endorsement by putting an obligation on the endorser of a product or service, to take due care to ensure that all descriptions, claims and comparisons, endorsed or made in advertisements, are capable of being objectively ascertained and substantiated. The endorsement shall not convey any express or implied false, misleading or deceptive representations.

The guidelines further lay down the provisions on, bait advertising, surrogate advertising, puffery, free claims, advertisements targeted at children, prohibited advertisements, disclaimers made in supporting, limiting or explaining claims made in advertisements, duties of manufacturer, service provider and advertising agency, etc.

The MCA invited views/comments/suggestions on the draft guidelines, to be submitted by October 1, 2020 : https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/Date_Extend.pdf.  The MCA notification itself along with guidelines can be accessed here: https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/Draft%20guidelines%20for%20stakeholders%20consultation.pdf

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

Copyright: ALG India Law Offices LLP.

The Ministry of Corporate Affairs (‘MCA’) issued a Statement of Reason dated June 19, 2020 for its decision to review certain penal provisions under the Limited Liability Partnership Act, 2008 (“LLP Act”) for decriminalization. The MCA has decided to undertake review in order to foster “greater ease of doing business” as well as to try to unclog the criminal justice system.

The review has been proposed by the MCA in respect of 20 penal provisions for compoundable offences and the current punishments therefor in the LLP Act, with a view to decriminalise them. The said provisions have been identified as being offences that are “minor, procedural, or technical violations of the LLP Act or offences which may not harm public interest”. These provisions cover punishments covering inadequacy of the number of designated partners; filing particulars of designated partners; eligibility and liabilities of designated partners; changes in designated partners; change in registered office of the LLP; name change of LLP; improper use of words ‘limited liability partnership’ or ‘LLP’; registration of change in partners; maintenance of books of accounts; timely filing of annual returns; providing information requested by Registrar; production of evidence and documents; timely filing of tribunal orders in respect of compromises/arrangements/reconstruction/amalgamation; offences for which no punishment is expressly provided; and, notification of conversion of LLP in correspondences.

The Statement recognizes that at present “more than 1,45,000 LLPs are registered under the said Act and a bulk of them are small and medium enterprises”. To try to foster a better business environment in India by minimising deterrents to ease of doing business, the MCA has identified the aforementioned penal provisions in the LLP Act, the criminalisation of which has been recognised as avoidable. By decriminalising the said penal provisions, the MCA seeks to encourage better compliance with the provisions in addition to try to unclutter the overburdened criminal justice system. 

Stakeholders were invited to submit their suggestions and comments. Amendment of the LLP Act remains pending. The MCA’s notification itself can be accessed here:  https://www.mca.gov.in/Ministry/pdf/Comments_19062020.pdf

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

Copyright: ALG India Law Offices LLP.

Government of India’s Policy Think Tank, Niti Aayog released the Draft Data Empowerment and Protection Architecture (DEPA) in August 2020. The framework looks at empowering financial inclusion through individual agency over data. Towards this, the framework visualizes three building blocks: enabling regulations; cutting edge technology standards; and new types of public and private organisations with incentives closely aligned to those of individuals. The DEPA has been viewed to be an evolving policy, to constantly match the pace of change and growth in the area.

The key problem area identified as background to the framework is the exponential increase in data footprints created by Indians, while still lacking financial stability or resources, or in the words of the framework, Indians “becoming ‘data-rich’ at historic rates, even before becoming economically rich or even financially stable”.  The increase in data footprint is because of better mobile and internet connectivity across the country and the resultant access to online payment systems, enabling more individuals, as well as MSMEs and local businesses, in to create credible transaction histories. Another concern identified with the existing scenario is that the provider of the data is not benefitting from the sharing of the data.  In comparison with data governance frameworks in other countries/regions of the world, the DEPA views the Indian scenario to be unique. Unlike the European GDPR (General Data Protection Regulation) which is based on the largely financial demographic, the Indian scenario is currently moving towards financial inclusion, economic growth and data democracy.

The framework by proposing an individual-consent based data sharing model, views the digital financial footprint and existing data as potentially instrumental in building trust and furthering inclusion through seamless sharing with key institutions such as – hospitals, banks, or future employers. It proposes to do so through the introduction of private organizations known as ‘Consent Managers’ whose role will be to mediate between ‘Information Users’ and ‘Information Providers’, while ensuring informed consent from the individual in the process.

Among the DEPA’s stated guiding principles are “restoring individual agency, promoting informed consent for every data transaction (rather than blanket consent for data use), building in accountability for institutional data controllers…”.The DEPA has been introduced, keeping in mind, the specific challenges including those to credit-access faced by various MSMEs, local businesses and individuals in need.

The framework is open to public comments till November 30, 2020, and can be accessed here: https://niti.gov.in/sites/default/files/2020-09/DEPA-Book.pdf

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

Copyright: ALG India Law Offices LLP.