Regulation of Misleading Advertising in India

Advertising has always played a crucial role in shaping consumer choices, creating brand awareness, and promoting products and services. In India, the advertising landscape has evolved significantly over the years, with the introduction of new media, including television, print, and digital platforms. 

However, as advertising grew in scope and impact, so did the need for robust regulations to protect consumers from false, deceptive, or misleading advertising practices. 

Misleading advertising not only affects consumer decision-making but also undermines trust in brands and the integrity of the marketplace. In this article, we will examine the regulation of misleading advertising in India, the laws governing such practices, and the penalties for violations.

What Is Misleading Advertising?

Misleading advertising refers to advertisements that contain false, deceptive, or exaggerated claims about a product or service. These advertisements often mislead consumers into making purchasing decisions based on incomplete, false, or exaggerated information. Misleading advertisements can include:

• False claims about the product’s features, benefits, or effectiveness.
• Misleading pricing, warranties, or guarantees.
• False endorsements or celebrity endorsements that do not accurately reflect the product’s quality.
• Exaggerated claims that cannot be substantiated by evidence.

In India, the regulation of misleading advertisements has become a pressing issue, especially with the rise of digital marketing, where advertisers often engage in aggressive promotional strategies, sometimes crossing ethical lines.

Laws Governing Misleading Advertising in India

India has several laws and regulations in place to address misleading advertising and protect consumer interests. These include the Consumer Protection Act, 2019 (CPA), The Cable Television Networks (Regulation) Act, 1995, Advertising Standards Council of India (ASCI), and others.

The Consumer Protection Act, 2019 (CPA)

The Consumer Protection Act, 2019 is the cornerstone of consumer rights protection in India. The Act aims to protect consumers from unfair trade practices, including misleading advertisements, and provides mechanisms for redressal of consumer grievances.

Misleading Advertisements under the CPA, 2019

Section 2(28) of the CPA defines misleading advertisements as advertisements that:

• Falsely describe a product or service – The advertisement provides an inaccurate or misleading description of the product or service.
• Offer false guarantees – The advertisement makes claims that cannot be substantiated or are entirely false, leading consumers to believe they are entitled to certain benefits.
• Deliberately omit important information – The advertisement withholds crucial information that could influence a consumer’s decision.
• Constitute unfair trade practices – The advertisement leads to unfair consumer decisions, which could be prejudicial to their interests.

The Central Consumer Protection Authority (CCPA), established under the CPA, is tasked with overseeing misleading advertisements and protecting consumer rights. The CCPA is empowered to investigate complaints, take corrective actions, and impose penalties on manufacturers, service providers, and advertisers responsible for misleading advertisements.

Penalties under the CPA, 2019 (Section 89)

Section 89 of the CPA, 2019 outlines penalties for manufacturers, service providers, or advertisers who cause false or misleading advertisements:

• First offence: Imprisonment for up to two years and a fine of up to 10 lakh rupees.
• Subsequent offences: Imprisonment for up to five years and a fine of up to 50 lakh rupees.

These penalties are intended to act as a deterrent and ensure that advertisers are held accountable for misleading practices.

The Cable Television Networks (Regulation) Act, 1995

The Cable Television Networks (Regulation) Act, 1995 governs the operation of cable television networks in India. Section 6 of this Act prohibits the transmission of any advertisement that:

• Is indecent, offensive, or harmful to viewers’ interests.
• Promotes false or misleading information or products.

This Act helps regulate advertisements aired on television, ensuring they meet ethical standards and do not mislead the public.

Advertising Standards Council of India (ASCI)

The Advertising Standards Council of India (ASCI) is a self-regulatory body established in 1985 to promote responsible advertising and ensure that advertisements adhere to ethical standards. ASCI operates under its Code of Self-Regulation, which sets out guidelines for advertisers to follow in order to ensure their ads are truthful, non-deceptive, and respectful of public sentiment.

ASCI’s role is vital in maintaining ethical standards within the advertising industry. It investigates complaints related to misleading ads, whether filed by consumers, competitors, or other stakeholders. ASCI has the power to:

• Investigate advertisements that violate the self-regulation code.
• Ask advertisers to modify or withdraw misleading ads.
• Address complaints against advertisements aired on television, printed in newspapers, or shared on digital platforms.

However, while ASCI is a powerful self-regulatory body, it lacks the enforcement authority of the government. Its recommendations are not legally binding, and advertisers can choose to disregard ASCI’s guidance. Despite this limitation, ASCI plays a significant role in promoting responsible advertising in India.

The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954

The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 was enacted to prevent the publication of misleading advertisements related to drugs and magical remedies. This Act prohibits any advertisement that claims a drug can cure specific ailments or conditions without scientific evidence.

Under this Act, it is illegal to promote products that make unproven or fraudulent health claims. Advertisements that promise “magical” cures for diseases are not only misleading but also dangerous, as they may encourage consumers to rely on ineffective treatments instead of seeking proper medical advice.

Regulatory Framework for Misleading Advertisements

The regulation of misleading advertising in India is not confined to any one law or body. Instead, it involves a combination of statutory laws, self-regulation, and judicial oversight.

Role of the Supreme Court in Regulating Misleading Advertising

The Supreme Court of India has played a pivotal role in shaping the regulation of misleading advertisements in the country. In recent years, the Court has issued directions aimed at protecting consumers from deceptive advertisements.

For instance, in a case involving Patanjali Ayurved, the Supreme Court directed that advertisers submit a self-declaration as an interim measure to curb misleading advertising. Advertisers were required to submit their self-declarations in line with the Cable TV Network Regulations, 1994, ensuring that ads are accurate and truthful.

The Court also emphasised the role of endorsements by public figures and influencers in advertising. Recognising their influence, the Court directed that public figures exercise prudence and accountability when endorsing products. This was an important step towards curbing misleading advertising that relies on celebrity endorsements to deceive consumers.

Guidelines for Digital Advertising

With the rise of digital platforms, misleading advertising has taken new forms, especially on social media. The Ministry of Consumer Affairs issued the Guidelines for Prevention of Misleading Advertisements and Endorsements (2022) to address the growing issue of deceptive digital ads. These guidelines:

• Require advertisers to provide evidence for health-related claims in ads.
• Ensure that products unsuitable for children are not marketed to them.
• Mandate that influencer endorsements reflect honest opinions.

These guidelines aim to create a more transparent and accountable advertising ecosystem, particularly in the digital space, which has seen an increase in misleading ads.

Landmark Cases on Misleading Advertisements

In the case of Havells India Ltd. v. Amritanshu Khaitan & Ors. (2015), the Delhi High Court set important precedents for determining whether an advertisement is misleading. The Court outlined two essential elements:

• The advertisement must deceive its intended audience.
• The advertisement must influence consumer behavior or cause harm to competitors.

This case was instrumental in defining the parameters of misleading advertising, focusing on both the deceptive nature of ads and their potential to harm consumer interests.

Penalties for Misleading Advertising

Penalties for misleading advertising are intended to serve as a deterrent for companies that attempt to deceive consumers. Under the Consumer Protection Act, 2019, violators can face imprisonment and hefty fines for publishing misleading advertisements. Section 89 of the CPA outlines the penalties:

• First offence: Imprisonment of up to two years and a fine of up to ten lakh rupees.
• Subsequent offences: Imprisonment of up to five years and a fine of up to fifty lakh rupees.

These penalties underscore the seriousness with which the Indian legal system treats misleading advertising and the importance of consumer protection.

Conclusion

The regulation of misleading advertising in India has come a long way, with a combination of legislative measures, self-regulation, and judicial intervention. The laws governing advertising aim to protect consumers from false, deceptive, and harmful ads, which can influence purchasing decisions and undermine trust in the marketplace.