Use Of Celebrity Voices To Train GenAI Tools: Part II – Violation Of Consumer Protection Act?

SA
Saikrishna & Associates

Contributor

Founded in 2001, Saikrishna & Associates is a tier-1 full-service law firm offering end-to-end services (from handholding during product ideation/creation to prosecution, regulatory compliances and enforcement) to a gamut of industries spanning the TMT, Entertainment, Electronics, Pharma, Life Sciences, Software, Artificial Intelligence, E-commerce, Automotive, FMCG, Retail and Real Estate Sectors.
In the first article in the series, we explored the potential causes of action that a voice artist (like Lehrman) could bring against an AI tool developer (like Lovo) under Indian Data Protection laws.
India Consumer Protection

In the first article in the series, we explored the potential causes of action that a voice artist (like Lehrman) could bring against an AI tool developer (like Lovo) under Indian Data Protection laws. In this second article, we examines the potential causes of action under the Indian Consumer Protection Act, 2019 ("CPA"), by analysing key arguments in the Lehrman v. Lovo case:

  • Lack of Informed Consent: Lovo contacted voice actors to create voice files without disclosing their use in AI development, misleading the actors about the purpose of their recordings.
  • Unauthorized Use of Voices: The plaintiffs' voices were used without consent on platforms like a YouTube channel promoting Russian military equipment, highlighting the broad and potentially harmful applications of their voices.
  • Promotion of Lovo's Products: The actors' voices were used to promote Lovo's products, with AI-generated avatars named "Kyle Snow" and "Sally Coleman," showcasing the commercial exploitation of their vocal likenesses.
Potential Causes of Action under the Consumer Protection Act, 2019:
  • Engagement in Unfair Trade Practices: The CPA defines unfair trade practices under Section 2(47) as "a trade practice which, for the purpose of promoting a sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice.." Under sub-clause (i)(d) of the same section, it includes within its ambit false representation "that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have" and under sub-clause (i)(e) "that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have". It is therefore potentially arguable any misrepresentation constituting a false approval of the purpose of the voice recordings and/or false affiliation with the voices actors could constitute deceptive/unfair practices, especially when used without authorisation for commercial purposes. The lack of transparency about the use of the actors' voices for AI development arguably constitutes a misrepresentation of the actual purpose, falling squarely under the purview of Section 2(47) of the CPA.
  • Engagement in Misleading Advertisement: Misleading advertisement has been defined under Section 2(28) of the CPA and includes an advertisement which: "i) falsely describes such product or service; or ii) gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or iii) conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or iv) deliberately conceals important information". Thus, the CPA categorizes misleading advertisements as a form of unfair trade practice. By employing AI-generated avatars with the actors' voices, the AI tool developer arguably created a promotional tool that could potentially mislead consumers into believing that these voice actors were genuinely affiliated with or endorsed by the company, when in reality, the actors had not consented to such use. Therefore, it may be argued that this deceptive practice fits within the definition of misleading advertisements as outlined in Section 2(28) of the CPA, particularly as it falsely describes the nature and source of the voices used, and implicitly suggests an endorsement that does not exist.
  • Right of Consumers: Under Section 2(9), "consumer rights" inter-alia include a) "the right to be informed about the quality, quantity, potency, purity, standard and price of goods, products or services, as the case may be, so as to protect the consumer against unfair trade practices"; b) "the right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers"; and c) "the right to consumer awareness". Therefore, the CPA protects consumers against unfair trade practices and provides the right to seek redressal against unfair trade practices.

Enforcement Options:

The voice actors would arguably have two remedies under the CPA against the AI tool developer's violation of rights of consumers, unfair trade practices and false or misleading advertisement, these include:

  • Central Consumer Protection Authority ("CCPA")

    A complaint can be filed under the CCPA which is a regulatory authority under the CPA having powers of investigation, inquiry and injunctive actions. An investigation by the CCPA follows a similar procedure to that conducted by India's Competition Commission. When handling complaints, the CCPA can direct the cessation of unfair trade practices, mandate corrective advertisements to counteract misleading ones, and order compensation and costs up to Rs. 15 lakhs. The CCPA is further vested with suo motu powers, enabling it to independently initiate investigations and inquiries, order the withdrawal of unsafe services, direct the discontinuation or modification of misleading advertisements, impose penalties, and conduct searches and seizures, among other actions.
  • Consumer Disputes Redressal Commissions

    Consumers can file complaints regarding violations of their rights, unfair trade practices, and misleading advertisements at the appropriate level (District, State, or National) based on the value of the goods/services or compensation claimed:
  • District Consumer Disputes Redressal Commission has jurisdiction to entertain complaints where the value of goods or services paid as consideration does not exceed Rs. 1 crore. The types of complaints at the district level include unfair trade practices and violation of consumer rights.
  • State Consumer Disputes Redressal Commission has jurisdiction to entertain complaints where the value of goods or services paid as consideration exceeds Rs. 1 crore but does not exceed ₹10 crore. It also has appellate jurisdiction over the decisions of the District Commission. The types of complaints at the state level include complex cases involving large sums or significant matters of consumer rights.
  • National Consumer Disputes Redressal Commission has jurisdiction to entertain complaints where the value of goods or services paid as consideration exceeds Rs. 10 crore. It also has appellate jurisdiction over the decisions of the State Commissions and can entertain revisions against their orders. The types of complaints at the national level include complaints against false or misleading advertisements and unfair trade practices, and major consumer rights issues.

Additionally, Section 89 of the CPA stipulates criminal penalties for service providers who produce false or misleading advertisements detrimental to consumer interests, including imprisonment for up to two years or a fine up to Rs. 10 lakh for the first offense, and up to five years of imprisonment and a fine up to Rs. 50 lakh for subsequent offences.

Thus, AI tool developers must be mindful of ensuring that their products are compliant with the mandate of the CPA in ensuring protection of rights of consumers. They must be careful in their advertisement claims and disclosures in any marketing material and terms of use, to ensure they are not subjected to the enforcement procedures under the CPA.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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