In a significant move to protect consumer rights, the Indian government has introduced amendments to the Consumer Protection Act, 2019, aiming to impose stricter penalties on misleading advertisements and unfair trade practices. The proposed amendments, tabled in Parliament on February 14, 2025, seek to hold advertisers, brand ambassadors, and manufacturers accountable for deceptive marketing strategies that mislead consumers.
Key Provisions of the Amendment
The new provisions focus on several critical areas to enhance transparency and fairness in the marketplace. Some of the notable changes include:
Heavier Penalties on Misleading Advertisements
- Advertisers and endorsers promoting false or exaggerated claims will face fines of up to ₹50 lakh and potential imprisonment for repeat offenses.
- Endorsers, including celebrities and influencers, will be required to conduct due diligence before promoting any product.
Regulation of Dark Patterns in Online Marketing
- The law will target deceptive online marketing tactics such as false urgency (limited-time deals), hidden charges, and bait-and-switch schemes.
- E-commerce platforms will be required to disclose clear return policies, actual prices, and additional costs upfront.
Strengthened Consumer Redressal Mechanism
- Consumers will now be able to file complaints digitally through a centralized Consumer Grievance Portal, reducing delays in grievance resolution.
- Strict timelines will be introduced for resolving consumer disputes, with penalties for companies that fail to comply.
Mandatory Disclosures for AI-Generated Advertisements
- With the rise of artificial intelligence in advertising, companies will be required to label AI-generated images and content to prevent consumers from being misled.
Government's Justification for the Move
Union Minister for Consumer Affairs Piyush Goyal, while presenting the bill, stated that the amendments were necessary due to the increasing number of cases where consumers were misled by exaggerated claims in advertisements, especially in the health, beauty, and e-commerce sectors. He cited reports indicating that false advertising complaints increased by 42% in 2024, leading to financial losses for thousands of consumers.
“The new law will hold companies and endorsers accountable for deceptive practices, ensuring that consumers make informed decisions,” said Goyal.
Industry and Consumer Reactions
The move has received mixed reactions from industry stakeholders. While consumer rights groups have welcomed the stricter regulations, advertising agencies and influencer marketing firms have raised concerns about the potential impact on creativity and brand promotions.
Consumer activist Nidhi Gupta, founder of the NGO “Consumer Watch India,” praised the amendment, stating, “This is a much-needed reform. For too long, consumers have been misled by celebrities endorsing ineffective health products, weight loss supplements, and fairness creams.”
However, the Advertising Standards Council of India (ASCI) has urged the government to ensure that genuine marketing efforts are not unduly penalized. “There must be a balance between protecting consumer rights and allowing creative expression in advertising,” said an ASCI spokesperson.
Implications for Brands and Influencers
With social media influencers playing a major role in digital advertising, the new regulations will require them to be more transparent about paid partnerships and product claims. Influencers failing to disclose paid promotions or making misleading claims could face heavy fines and legal action.
Legal experts believe that this amendment will make brands more cautious about how they market their products. Companies will now need to fact-check claims rigorously, ensuring that advertisements are based on genuine evidence.
Conclusion
The proposed amendments to the Consumer Protection Act signal a major shift towards stricter consumer rights enforcement in India. If passed, the law will curb misleading advertisements, enhance transparency in online shopping, and hold both brands and endorsers accountable. As consumer awareness grows, this move is expected to bring about a fairer and more trustworthy marketplace for all.
