Navigating Advertising Regulations in India’s E-commerce M&A

India’s e-commerce sector is undergoing a transformative wave of mergers and acquisitions (M&As) in 2024–25. This shift is driven by the pursuit of scale, technological synergies, and market dominance. For senior leaders in digital-first industries, navigating advertising regulations post-merger is now a critical priority. It helps ensure marketing compliance, reduce legal risks, and maintain consumer trust in a highly regulated digital environment.

Industry Overview & Legal Context of Advertising Regulations

The e-commerce M&A landscape in 2024–25 is marked by rapid consolidation among Direct-to-Consumer (D2C) brands, marketplaces, and platform-led businesses. This surge in e-commerce M&A is fueled by digital adoption and the need for unified branding strategies. However, post-merger integration faces intense scrutiny from regulators like the Competition Commission of India (CCI), the Advertising Standards Council of India (ASCI), the Ministry of Electronics and Information Technology (MeitY), and the Ministry of Consumer Affairs. These bodies enforce Advertising Regulations to ensure ethical marketing, particularly for consumer-facing digital campaigns.

Advertising Regulations are pivotal in tech-driven consolidations, as merged entities must align digital marketing strategies spanning social media, influencer campaigns, and programmatic ads with consumer laws. Non-compliance can lead to penalties, reputational damage, and eroded consumer trust, making marketing compliance a strategic priority for post-merger success.

1. Recent Regulatory Developments Impacting Advertising Regulations (as of 2025)

The regulatory framework governing Advertising Regulations in India is evolving rapidly:

• ASCI Guidelines: The Advertising Standards Council of India (ASCI) has strengthened its rules on influencer marketing, mandating clear disclosures (e.g., #ad or #sponsored) and cracking down on surrogate advertising for restricted products. A 2023 amendment requires influencers in financial sectors to disclose qualifications, enhancing marketing compliance.
• DPDP Act: The Digital Personal Data Protection (DPDP) Act, enacted in 2023, restricts targeted advertising by mandating robust user consent and prohibiting behavioral tracking for children. This impacts post-merger data-driven marketing strategies, requiring compliance with consumer laws.
• Consumer Protection Act (CPA): Enforced by the Central Consumer Protection Authority (CCPA), the CPA imposes fines up to INR 50 lakh for misleading ads, including deceptive pricing, greenwashing, or unsubstantiated claims. A 2024 case saw a wellness brand penalised for false health claims, highlighting legal risks.
• High-Profile Cases: Recent e-commerce M&A cases underscore non-compliance risks, with ASCI flagging brands for deceptive pricing and misleading claims, reinforcing the need for adherence to Advertising Regulations.
• Budget 2025 & DPIIT Updates: Emerging policies from Budget 2025 and the Department for Promotion of Industry and Internal Trade (DPIIT) focus on transparency in cross-brand promotions, foreign-funded marketing, and ad-tech disclosures, further shaping Advertising Regulations.

2. Key Challenges in Marketing Compliance Post-Merger

Post-merger integration presents significant challenges for marketing compliance:

• Inconsistent Brand Messaging: Disparate legacy and new teams often struggle to align brand voices, risking consumer confusion and violations of Advertising Regulations.
• Merged Tech Stacks: Combining customer relationship management (CRM) platforms can create data-sharing and consent risks under the DPDP Act, exposing firms to legal risks.
• Platform-Specific Regulations: Platforms like Amazon, Meta, and Google enforce unique Advertising Regulations, where non-compliance can lead to account suspensions or reduced reach.
• Consumer Trust Erosion: Inconsistent disclaimers or influencer tag failures can erode trust, inviting ASCI scrutiny and potential lawsuits.
• Reverse Liability: Acquirers may inherit legal risks from ongoing ASCI cases or past violations by the target company, necessitating thorough due diligence.

3. Strategic Implications Using a Hybrid Consulting Lens

• Go-To-Market (GTM) Strategy

1. Align Marketing Playbooks: Customise a unified, compliance-led marketing framework to ensure adherence to Advertising Regulations across all campaigns.
2. Centralise Approval Workflows: Streamline content approval processes to prevent non-compliant ads, enhancing marketing compliance.
3. Incorporate Compliance Audits: Embed regular audits into campaign lifecycles to maintain alignment with consumer laws and Advertising Regulations.

• Legal & Risk Management Strategy

1. Post-Merger Risk Assessments: Evaluate ongoing campaigns for compliance with Advertising Regulations and consumer laws to mitigate legal risks.
2. Update Legal Frameworks: Revise terms, conditions, disclaimers, and opt-ins to align with ASCI and DPDP norms.
3. Unified Data Consent: Develop a cohesive consent structure across platforms to comply with consumer laws and avoid penalties.

• Technology Enablement

1. AI Tools: Deploy AI for real-time ad copy vetting, influencer tracking, and DPDP-compliant targeting to enhance marketing compliance.
2. Automated Audit Trails: Implement systems to document compliance and consent, ensuring defensibility during regulatory reviews.

Illustrative Examples

• Legal Risk Mitigation

In a 2024 e-commerce M&A, a retailer acquired a fashion D2C brand facing ASCI scrutiny for 22 non-disclosed influencer campaigns. The legal and tech teams customised a unified consent capture module, reissued disclosures across social media, and trained influencers on Advertising Regulations, averting penalties and restoring brand credibility.

• Strategic Integration

In a 2025 e-commerce M&A involving a wellness brand, the marketing compliance team consolidated regional ad practices and integrated AI-driven legal review tools. This reduced regulatory friction by 40% within three months, ensuring compliance with Advertising Regulations and consumer laws.

Conclusion: Prioritising Advertising Regulations in E-commerce M&A

Advertising regulations are a cornerstone of successful e-commerce M&A. They act as both a legal safeguard and a strategic checkpoint. Proactive marketing compliance, legal foresight, and operational integration are vital to reduce legal risks and protect brand equity. These efforts also help build lasting consumer trust. By customising GTM strategies, using the right technology, and performing detailed due diligence, leaders can turn regulatory hurdles into market leadership opportunities. LawCrust’s expertise in navigating advertising regulations ensures smooth post-merger compliance and supports long-term growth.

About LawCrust

LawCrust Global Consulting Ltd. delivers cutting-edge Hybrid Consulting Solutions in Management, Finance, Technology, and Legal Consulting to ambitious businesses worldwide. Recognised for our cross-functional expertise and hybrid consulting approach, we empower startups, SMEs, and enterprises to scale efficiently, innovate boldly, and navigate complexity with confidence. Our services span key areas such as Investment Banking, Fundraising, Mergers & Acquisitions, Private Placement, and Debt Restructuring & Transformation, positioning us as a strategic partner for growth and resilience. With an integrated consulting model, fixed-cost engagements, and a virtual delivery framework, we make business transformation accessible, agile, and impactful.

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