Jyotsna JayaramPartner
Akshaya Parthasarathy Senior Associate
Sanah JavedAssociate
Key Developments
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Central Consumer Protection Authority releases guidelines prohibiting the use of dark patterns
With an aim to preserve consumer autonomy and choice, the Central Consumer Protection Authority (CCPA) has notified the Guidelines for Prevention and Regulation of Dark Patterns, 2023 (Guidelines) under the Consumer Protection Act, 2019 (CPA).
The Guidelines are likely to have a far-reaching impact as they prohibit the use of any dark pattern i.e., any practice or deceptive design pattern using UX/UI interactions on any platform designed to mislead or trick users into doing something they do not want to do. The Guidelines provide a number of illustrations of dark patterns. Employing dark patterns would amount to misleading advertisements, unfair trade practices, or the violation of consumer rights under the CPA. Given this, entities operating across industries should review their customer interfaces and strategies for customer acquisition, customer retention, and sales acceleration to comply with the Guidelines.
(To read our detailed update on the Guidelines, click here.)
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Advertising Standards Council of India introduces additional conditions on advertising expenditure for qualification as a legitimate brand extension product or service
The Advertising Standards Council of India (ASCI) has put in place various criteria for the advertisement of products or services that bear the same branding as restricted products that cannot be advertised, such as tobacco or liquor (Brand Extensions). These include thresholds for sales turnover and a requirement to register with the relevant government authority.
In a move that further tightens the restrictions around the advertisement of Brand Extensions, the ASCI has introduced the following additional criteria that a Brand Extension should meet to not be viewed as surrogate marketing for the advertisement-restricted products:
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The scale of the advertising must be proportionate to the sales of the Brand Extension and therefore the advertising budget, including payments for celebrity endorsements, media spending in the preceding year, and average spending on advertising production in the past three years, should not exceed the thresholds of 200% of the sales turnover in the first couple of years of launch, 100% in the third year, 50% in the fourth year and 30% in subsequent years.
The date of launch is the date of the first invoice for the sale of the Brand Extension. It has also been clarified that any variant launched under the Brand Extension will not be treated as a fresh extension and the original date of the first Brand Extension would apply.
- Evidence demonstrating the above must be certified by a reputed and independent chartered accountant firm.
Entities engaged in manufacturing and selling advertisement-restricted products like liquor are likely to be more closely scrutinised by ASCI going forward. Internal strategies may need to be re-examined to improve organic marketing and explore low-cost, high-impact advertising options.
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These developments display a growing emphasis on protecting consumers’ rights and interests, particularly through the regulation of advertising and other consumer-facing behaviours occurring prior to the sale of a product or service. Notably, according to recent news reports, the CCPA has already issued notices under the Guidelines, despite their recency. Therefore, stakeholders increasingly need to ensure that their legal, business, and product teams collaborate to keep up with the evolving regulatory restrictions and adapt their practices accordingly. The coming months will see more such developments. For instance, the ASCI's draft guidelines on transparency in advertisements making environment-related claims (such as products being ‘eco-friendly’ or ‘sustainable’) may be finalised.
