CCPA takes aim at surrogate advertising through CSR, drafts new guidelines

The Central Consumer Protection Authority (CCPA) is working on new guidelines to tackle surrogate advertising, particularly through corporate social responsibility (CSR) initiatives. These rules are intended to curb the promotion of restricted products like liquor and tobacco under the guise of social campaigns, ensuring that businesses cannot use CSR activities as an indirect way to advertise banned goods.

The draft guidelines, which are nearing completion, will define what constitutes surrogate advertising and will impose penalties for violators. Companies found promoting alcohol or tobacco through indirect means, such as using brand names, logos, or colour schemes linked to restricted products, could face fines of up to ₹50 lakh.

Surrogate advertising often occurs when liquor brands sponsor sports events, cultural festivals, or environmental campaigns, subtly incorporating their logos and product identity into these activities. Some brands also align themselves with health and safety initiatives, like responsible drinking programs, or fund community development projects, all while leveraging their CSR initiatives for indirect advertising.

However, the new rules will allow for genuine brand extensions, where companies can advertise new products or services unrelated to their restricted items, provided they are genuinely available in the market and not just a cover for promoting banned products. If a liquor or tobacco company launches a new, unrelated product, such as a soft drink or merchandise, under the same brand name, they will be permitted to advertise it, as long as they can demonstrate that the product has a valid sales record and market presence.

The guidelines will focus on ensuring that CSR campaigns are not exploited for misleading advertising, while still allowing companies room for legitimate brand diversification. The rules are expected to be released for public comment once all formalities are completed.