Legal considerations surrounding the use of AI in advertising, as per ASCI and Khaitan & Co

ASCI and Khaitan & Co's paper sheds light on regulatory ambiguity and challenges surrounding the use of AI in advertising.

The Advertising Standards Council of India (ASCI) and Khaitan & Co, a full-service law firm, have jointly released a comprehensive whitepaper on generative artificial intelligence (AI), highlighting the opportunities, risks and legal considerations around the use of AI in advertising.  

Manisha Kapoor, CEO and Secretary General, ASCI, said, "AI is a groundbreaking technology with immense potential, especially in advertising. As advertisers increasingly adopt AI, they must be aware of its impact on consumers and society. From an ASCI and consumer protection perspective, advertisements made with AI are subject to the same principles of regulation and consumer protection that any ad is. As this field evolves, greater regulatory clarity will also have to keep pace with technological development. Privacy,  copyrights, and responsibility over content creation are key issues that need to be dealt with in time. We extend our gratitude to Khaitan & Co. for their legal expertise and collaboration in producing this report." 

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Tanu Banerjee, Partner, Khaitan & Co, said, "AI is set to disrupt how any business works today. The adoption of generative AI is particularly high in the advertising sector, given how  AI has revolutionised the way creative materials used in ads can be developed. However,  though the evolving AI technology offers massive opportunities, it also presents several legal risks and challenges, such as issues around ownership of content, privacy of data, AI  bias, authenticity of prompts etc. While the regulatory framework for AI evolves, it’s critical for advertisers to be aware of the existing regulations and legal principles, to safeguard against these risks and to ensure ethical use of generative AI. We are very grateful to ASCI  for their support and invaluable insights in preparing this report." 

Generative AI enables advertisers to automate the creation of original content, including text, images, articles, marketing collaterals and more. It also enhances customer experiences through chatbots, AI assistants and interactive advertising. The whitepaper acknowledges the limitless applications of generative AI in advertising while addressing concerns around its potential misuse and manipulation, particularly related to consumer protection.

With a focus on the Indian legal framework, the whitepaper highlights the legal risks and challenges that advertisers may face when utilising generative AI. It addresses issues such as potential copyright infringement, prevention of unlawful content, and data privacy concerns. 

Some of the best practices outlined in the whitepaper to mitigate risks associated with generative AI are: 

• Review the AI platform’s terms of use and licensing compliance to reduce liability risks.
• Obtain the necessary authorisations and licenses for uploaded materials, including copyrighted and trademarked content. 
• Avoid prohibited input prompts and carefully check the output for prohibited content before commercial use. 
• Mitigate liability risks by implementing robust content review processes, establishing guidelines, and including AI disclaimers in marketing materials. 
• Safeguard confidential information and ensure data privacy by enforcing non-disclosure agreements and implementing robust security measures.
• Upskill human labour in editorial oversight and compliance to avoid employee displacement. 

The whitepaper concludes by addressing the future of generative AI and the unique challenges that must be addressed for its responsible and ethical deployment. It emphasises the importance of principles such as fairness, accountability, transparency, and ethics within the AI community. Advertisers are encouraged to embrace these principles, ensuring fairness in decision-making, accountability for actions, transparency in operations, and ethical considerations in their impact on individuals and society.  

You can access the whitepaper here: