Celebs to be held responsible for ads? New law to let consumers file class-action suits

India is all set to get a new consumer protection law that will give the common buyer several facilities that people in the fast-growing economy need. 

Primary among these will be a single organisation that will deal solely with consumer protection matters, and a provision that will hold celebrities responsible if they are found endorsing products that are substandard or are engaging in false advertising. 

What's more, it will also have provisions for filing of class-action suits — lawsuits filed by a group of people as a whole against products or services — as well as clauses that will bring e-commerce dealings under the purview of consumer protection. 

Protecting the customer

The biggest measure in the new consumer protection bill — drafted in 2015 and to be tabled in the Lok Sabha during the ongoing Monsoon session of Parliament — is that it will initiate the setting up of the Central Consumer Protection Authority.

The executive agency will have the power to intervene and stop unfair trade and advertisement practices, and will also have the power to launch class-action suits. 

And these class-action suits themselves are another provision of the new bill that overhauls the existing one, which had come into force in 1986. 

A class action lawsuit is defined as a case filed by one person on behalf of many who have been harmed by the services, products or actions of a single entity.

For example, had this law been in force at the time Maggi noodles went off the market in mid-2015 following allegations that it had broken food laws in India, the entire debacle would have resulted in the country's first class action lawsuit. 

Bringing corporates to task

Other provisions of this new law will hold the manufacturer, producer and even the seller accountable in case any product is found deficient or harmful in any manner, be it right at conception or at the point of sale. 

The law will also bolster the current mechanisms that exist at various levels to address consumer concerns and complaints. 

It will also bring under its purview all e-commerce transactions. It will also ensure that people can file consumer complaints electronically. 

Other provisions

Another provision of the law will be directed at celebrity endorsers, who will be held accountable in case the products or services they are endorsing are found to be harmful or indulging in false advertisement. 

Something similar had happened during the aforementioned Maggi noodles controversy when a lawyer had sued its celebrity endorsers Amitabh Bachchan and Madhuri Dixit. The current law will ensure that such celebrity endorsers are punished in such cases. 

And finally, since the law will be much more stringent and cast a wider net, there is every possibility that it will be misused. It is to deter exactly such misuse that any person filing frivolous lawsuits under it will have to pay fines of Rs 10,000-Rs 50,000. 

After it is passed by the Lok Sabha, the new bill will need the nod of the Rajya Sabha and newly-elected PResident Ram Nath Kovind to become a law.