Advertising plays an important role in the contemporary economy as it influences consumption and fashion market trends. Nevertheless, misuse is likely, where misleading advertisements may be viewed as a violation of consumer rights and unfair trade practices. Misleading adverts are materials that carry untruthful, deceptive, or inaccurate content aimed at confusing the customers who...
Advertising plays an important role in the contemporary economy as it influences consumption and fashion market trends. Nevertheless, misuse is likely, where misleading advertisements may be viewed as a violation of consumer rights and unfair trade practices. Misleading adverts are materials that carry untruthful, deceptive, or inaccurate content aimed at confusing the customers who will then make uninformed decisions leading to possible adverse effects.
" Section 2(1) of The Consumer Protection Act, 2019 provides a definition of "Advertisement" refers to any form of audiovisual publicity, representation, endorsement, or statement conveyed through light, sound, smoke, gas, print, electronic media, the internet, or a website; it also includes any paperwork such as notices, circulars, labels, invoices, or wrappers;[1]
Understanding Misleading Advertisements
What is a misleading advertisement?
Misleading advertising is an advertisement that contain false, deceitful, or misleading data meant to deceive clients into making uninformed decisions that could be harmful. In this regard, it is considered deceptive if it portrays products or services dishonestly. For instance, when a shampoo company claims that their shampoo can solve hair loss and dandruff issues after just one use, such a statement is deemed to be false and misleading. Misleading advertisements can influence consumers with fantastical images rather than the grim reality of the product's process.
“The Consumer Protection Act of 2019 defines "misleading advertisement" under Section 2(28). It refers to any advertisement concerning a product or service that :
- Provides an incorrect description of the product or service; or
- Offers a deceptive guarantee, or has the potential to deceive consumers about the product or service's nature, substance, amount, or quality; or
- Makes a direct or indirect claim that, if made by the product's manufacturer, seller, or service provider, would be considered an unfair trade practice; or
- Intentionally hides crucial information.”[2]
According to Section 10 of this act, a Central Consumer Protection Authority has been set up to oversee issues related to consumer rights violations, unfair trade practices, and deceptive advertisements that are detrimental to the public and consumer interests. Its role is to advocate, safeguard, and enforce consumer rights collectively.[3]
Under Section 16 of the same act, it is the responsibility of the District Collector to conduct further investigations into the matter within their jurisdiction.[4]
Legal Framework
Laws and regulations against misleading advertisements
The Consumer Protection Act, 2019
This new Act replaced the consumer protection law of 1986, which is more than three decades old. The Consumer Protection Act 2019 was passed by the Parliament with the objective of overhauling the earlier regime and replacing the Consumer Protection Act 1986 (1986 Act).
The new Act provides the specific definition of misleading advertisement and extended the meaning of Unfair Trade practices. Apart from this, CCPA has been established to prevent the misleading advertisements which hamper the rights of the consumer.
The Bureau of Indian Standards (Certification) Regulations, 1988
Under Rule 7 (1) (l), (g), and (h), deceptive advertisements related to BIS certification are prohibited.
Food Safety and Standards Act, 2006
Section 24 restricts certain types of advertisements and unfair trade practices for the purposes of promotion, sale and supply of foods. It ensures that no advertisement shall be made of any food which is misleading or deceiving or contravenes the provisions of this Act, the rules and regulations made there under.[5]
The cable television network Act, 1995& the Cable Television Amendment Act, 2006
Advertisements that do not adhere to the ASCI's Code for Self-Regulation are prohibited.
The Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply, and Distribution) Act, 2003
Section 5 Prohibits any advertisement of cigarettes or tobacco products in any medium.[6]
Drug and Magic Remedies Act, 1954
Section 3 of the act prohibits any advertisement promoting drugs for the diagnosis, cure, mitigation, treatment or prevention of any disease, disorder or condition specified in the Schedule and the schedule lists a number of diseases, disorders or conditions such as diabetes, cataract, cancer, fevers (in general), obesity, rheumatism, impotence, high or low blood pressure, female diseases, epilepsy, stature of persons, venereal diseases, glaucoma, sterility in women, dropsy, etc.7
Establishment of the ASCI (Advertisement standard council of India), 1985
The Advertising Standard Council of India (ASCI) was formed as a non-statutory body. It introduced a self-regulated system for maintaining ethical standards in Indian advertising. The ASCI evaluates advertisements based on its own Code of Advertising Practice, often referred to as the ASCI code. This code is relevant to all ads that are read, heard, or seen in India, irrespective of their origin or place of publication, as long as they are aimed at Indian consumers.
According to Chapter I (4) of the ASCI Code, “Advertisements should not manipulate facts or mislead the consumer through either implications or omissions.”[8]
Guidelines for Preventing Misleading Advertisements in India
In June 2022, The Central Consumer Protection Authority(CCPA) notified the Guidelines on Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022[9] with immediate effect to safeguard consumer rights from a wide range of advertising issues.
These guidelines aim to define the basic elements of effective advertising, distinguish misleading advertising from effective advertising, and identify key aspects of advertising that reach different groups of people.
These guidelines focus on bait, ads claiming to be free, and ads targeted to children. The guidelines state that an advertisement is considered misleading if it does not meet the standards/characteristics of the product or service. Characteristics mentioned in the Advertising Guidelines include not producing misleading advertising but making honest and transparent statements, ensuring that statements live up to their promises, not being used for advertising and making generally accepted claims.
Regulatory and Legal Trends
The ASCI Annual Complaints Report for the fiscal year 2022–23[10] highlighted real money gaming, education, and healthcare as the sectors with the highest number of deceptive advertisements. An alarming 92% of the scrutinized gaming ads did not adhere to the guidelines for real money gaming, failing to caution consumers about the potential risks of financial loss and addiction.
Furthermore, out of the 503 deceptive ads featuring celebrities that were analyzed by the ASCI, 97% showed that the celebrities did not provide proof of the necessary due diligence mandated by the Consumer Protection Act. Violations related to influencers made up 26% of the complaints handled by the ASCI, with a total of 2,039 grievances lodged against them. Misconduct by influencers was especially rampant in sectors like personal care, food and beverage, and fashion and lifestyle.
The Patanjali Misleading Advertisements Controversy
In the Patanjali misleading advertisements case, the Supreme Court of India reprimanded Patanjali Ayurved, led by Baba Ramdev, for flouting court orders on misleading advertisements. Despite an apology, the court doubted the sincerity of the company's remorse and warned of contempt charges. Patanjali came under scrutiny for running advertisements even after promising not to, which might have resulted in legal consequences.
The Indian Medical Association (IMA) had filed a petition in the Supreme Court after Patanjali published an advertisement titled 'Misconceptions Spread By Allopathy: Save Yourself And The Country From The Misconceptions Spread By Pharma And Medical Industry'. The IMA accused Patanjali of contributing to vaccine hesitancy during the pandemic and making false and unfounded claims about curing certain diseases through the use of Patanjali products.
In response to the misleading advertisements, the Supreme Court ordered Patanjali to issue public apologies in various newspapers. However, the court later refused to accept the apologies, stating that they were made only because Patanjali had no other option.
This case serves as a stark reminder of the legal consequences of misleading advertising and the importance of adhering to advertising regulations. It also highlights the role of the judiciary in upholding consumer rights and ensuring fair trade practices.
Supreme Court Issues Directions Against Misleading Advertisement
On May 7th, the Supreme Court issued a pivotal order with several measures to protect consumers from misleading advertisements. Here are the key directions:
Equal Responsibility of Advertisers and Endorsers: The court noted that endorsements by public figures, influencers, celebrities, etc., significantly influence product promotion. Therefore, it is imperative for them to act responsibly when endorsing any product in advertisements.
Self-Declaration Forms by Advertisers: Before issuing any advertisements, advertisers are required to upload a self-declaration form. This form needs to be in line with the Cable Television Network Rules, 1941. The self-declaration is to be uploaded on the Broadcast Seva Portal, run under the Ministry of Information and Broadcasting. The advertisement can run on the relevant channels only after this.
Creation of a Separate Portal for Print Media: The court directed the Ministry to create a separate portal for uploading the self-declaration for press/print media within four weeks. All advertisers must file the self-declaration before issuing any advertisements in the print media.
The bench of Justices Hima Kohli and Ahsanuddin Amanullah issued this directive while hearing the contempt case involving misleading advertisements by yoga guru Ramdev's Patanjali Ayurved, which claimed to cure illnesses like diabetes with its drugs and products.
Preventive Measures and Legal Remedies
How consumers can protect themselves from misleading advertisements :
- Be Informed: Understand the common tactics used in misleading advertisements. For example, some ads may exaggerate the capabilities of a product or omit key information.
- Verify Claims: Don't take the claims made in advertisements at face value. Do your own research to verify the claims.
- Read the Fine Print: Advertisements often include important information in the fine print. Make sure to read it carefully.
- Report Misleading Advertisements: If you come across a misleading advertisement, report it to the appropriate regulatory body such as the Central Consumer Protection Authority (CCPA).
- Seek Legal Remedies: If you have been harmed by a misleading advertisement, you may be able to seek legal remedies under laws like the Consumer Protection Act, 2019.
Penalties for misleading advertisement:
Section 21 – Under Section 21, if an advertisement is found to be deceptive or misleading, the Central Authority has the power to order its discontinuation or modification. If the Central Authority finds it necessary, it can also impose a penalty on the manufacturer, endorser, or publisher of the misleading product advertisement.[11]
Section 89 – Under Section 89, any manufacturer or service provider who is responsible for a false or misleading advertisement that harms consumer interests can be penalized. The punishment can include imprisonment for up to two years and a fine of up to ten lakh rupees. For each subsequent offence, the penalty can include a jail term of up to five years and a monetary fine reaching up to fifty lakh rupees.[12]
Misleading advertisements pose a significant challenge in today's consumer-driven market. While legal frameworks like The Consumer Protection Act, 2019, provide robust mechanisms for consumer protection, the responsibility also lies with advertisers to ensure honesty in their communication. Stricter enforcement of guidelines and increased consumer awareness are crucial for a fair and transparent advertising ecosystem. Ultimately, the goal is to replace the art of deception in advertising with the art of truthful and ethical persuasion.
Views are personal.
[6] Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply, and Distribution) Act, 2003, § 5, No. 34, Acts of Parliament, 2003 (India).
[8] Advertising Standards Council of India, ASCI Code, Ch. I(4), https://www.ascionline.in/the-asci-code/ (last visited May 4, 2024)
[9]Department of Consumer Affairs, CCPA Notification, https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/CCPA%20Notification.pdf (last visited May 4, 2024).
[10]Advertising Standards Council of India, Annual Complaints Report 2022-23, https://www.ascionline.in/wp-content/uploads/2023/05/Annual-Complaints-Report-2022-23.pdf (last visited May 4, 2024).