Misleading Advertisements & Law

The study will serve as an exclusive piece of information that provides an insight into the revolution in the advertising sector. Since the revolution of any variable has significant impacts thus the 21st century has been drastically affected by the negative impact of such a revolution because of which the global economies poses a threat to industrial and human resources. The study will identify how big business giants, with their ill consumer practices have to lead to the disturbance of the ecological balance. Moreover, such practices geared up during the Global pandemic resulting in the lowest growth rate over the years. The study will provide measures and outline laws and regulations in order to inhibit the growth and make customer- service sustainable in nature.


Advert and consumer relationships have become a part and parcel of our generation. However, in the present era of globalization where the world has transformed into a global village, it can be assimilated that advertising plays a key role in developing and garnishing a strong brand identity in the market place. Advertising is one of the pervasive elements in this customer based society it is used to inform, persuade, and remind customers about the product and service leading to increased sensitivity and a better understanding of the market strategies. Thus advertising helps the consumer to make informed- purchase decisions. Despite all this advertising has been accused of an array of sins ranging from economic waste, sexism, manipulation, deceit, triviality and moral pollution. Moreover instead to combat such activities the problem of misleading and dysfunctional ads is getting worse day by day moreover such practices are giving rise to negative attributes like creating class consciousness, materialism, conspicuous consumption and other values. Some of the ways through which such advert are being driven into the society are :

Historical Background

The very first signs of advertising are dated back to the Egyptian’s steel cravings in 2000BC, which traced the first print advert which was published in 1472 when Williams Caxton printed ads for a book and tracked them to do of a church in England. The first newspaper got published in the year 1704 in the U.S, following which the first U.S billboards displayed circus was adverted in the year 1835 measuring 1835. The advent of the advert was streamlined to the electronic medium, the radio, in the year 1992 where the host HM Blackwell founded his own TED talk of 10 minutes about the virtues of living a carefree life, the advert charged $50 for 10 minutes. Personalization was at its pinnacle when Rosser Reeves introduced the idea of a unique selling proposition following which the concept of market research was introduced. One of the major breakthroughs in the history of the advert was on 1st July, 1941when the first legal and continental advert was broadcasted on T.V screens on WNBT. After the concept of Online advertising, mobile advertising making the world it is that it is.

Different Types of False Advertising Techniques

  1. Mislabeling:  It is a common form of advertising where the entities use misleading information on product packaging or in websites. The companies make false claims by stating the product is on sales but it was never offered. Examples of such activities were found in the stores of Ann Taylor, Michael Kors.
  2. Failure to Disclose:  A business that is not open to its customers by not including the material information about its product or only partially discloses information can be considered to be engaged in false advertising. Such information is one such sensitive piece in the sales of drugs. Thus the consumers should be aware of items they purchase however failing to disclose such information may lead to strict legal action.
  3. Flawed Research:  Flawed research can be defined as representations found to be unsupported by accepted authority or research or which are under the control of the certain definitive authority. There are companies who make claims based on such flawed researches thus categorizing them under these techniques.
  4. Product Disparagement and Trademark Infringement: The companies may get into trouble for the false advert if they tend to deteriorate the competitor’s product or service as a part of their marketing strategy. Intellectual property rights law prohibits such practices.
  5. Bait and switch: Under this, if the company claims about the price or quality of a particular product or service with no plans to sell or provide such services at the price which is being offered then it may lead to harsh legal measures.

False Advertising Scandals of Big Time

  1. Volkswagen:  The car company had deceived customers with its clean environment campaign called “ clean diesel”. However, it was revealed that the company had cheated more than 50,000 customers, where the numbers were sold on false claims that the cars were low –emission, environmentally friendly. And the company paid $61 billion for violating the Clean Air Act.
  2. Red bull:   The company was sued for its slogan “Red Bull gives you wings”. The company used the tagline for about two decades claiming that the caffeinated drink could improve a consumer’s concentration and reaction speed. A customer who was a regular consumer of the product claimed that he had not developed wings over 10 years of time or shown improved physical abilities, considering this the company had to pay $10 to every US customer who is a consumer since 2002 including $13 million for the suit bought in by the class action.
  3. Kellogg:  Kellogg a popular rice-based Krispies cereal claimed that the cereal improved the immunity of a child with 25% of daily value antioxidants and nutrients including Vitamin A, B, C and E.  However the claims were true, consequently Kellogg agreed to pay $2.5 million to affected consumers as well as donated worth of products in charity.
  4. New balance:  The company claimed that the sneakers could help wearers burn calories, however on research conducted by Reuters it was concluded that there was no such benefit. Moreover, the company claimed the sneaker uses hidden board technology that activates quads, hamstrings and calves. All the claims being false New balance agreed to pay a settlement of $2.3 million.
  5. Hyundai: The automobile company overstated the horsepower of the cars imported to the US in 2004, 8,40,000 consumers purchased the cars in 1996-2002. Thus Hyundai agreed to pay more than $85 million in for the settlement to take place.

Laws and Legislations

  1. Drugs and Magic Remedies Act:   The drugs and magic remedies Act of 1954 tend to prohibit majorly 4 types of advert pertaining to drugs and magical cures. Section 3 states that no person shall be indulged in the publication of any advert which promotes a drug or leading to the use of a drug for:
  2. The procurement of miscarriage in women or the prevention of conception in women.
  3. The maintenance or improvement of the capacity of a human being for sexual pleasure.
  4. Correction of menstrual disorders in women.
  • The Cable television Network Regulation Act and Rules: The Act states that “No person shall transmit or re-transmit through a cable service, any advertisement unless such advertisement is in conformity with the prescribed advertising code”. The Act provides seizure of the equipment being used by the cable operator for operating the cable TV network. Chapter IV of the Act, under ‘Offences and Penalties’, prescribes for first offense, imprisonment which may extend to two years or a fine which may extend to ` 2000 or both. For every subsequent offense, it can go up to five years or ` 5000 or both.
  • Food safety and Standards Act:  The law provides to deal with a false and misleading advert which are pertaining to food. The advertisements included are such content that is broadcasted on electronic media. Section 24 of the Act states 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 thereunder.
  • No person shall engage himself in any unfair trade practice for purpose of promoting the sale, supply, use and consumption of articles of food or adopt any unfair or deceptive practice including the practice of making any statement, whether orally or in writing or by visible representation which:
  • falsely represents that the foods are of a particular standard, quality, quantity or grade-composition
  • makes a false or misleading representation concerning the need for, or the usefulness
  • gives to the public any guarantee of the efficacy that is not based on an adequate or scientific justification thereof:

Provided that where a defense is raised to the effect that such a guarantee is based on adequate or scientific justification, the burden of proof of such defense shall lie on the person raising such defense. Section 53 provides for penalty for misleading advertisements, extending to `10 Lakhs.


Advertising creates the desire to possess better and newer items by educating the buyers about a better lifestyle. Advertising gives a direct stimulus to the consumer which in turn prompts the producer to produce more and better quality. Advertising and selling have played an important part in expanding the economic system by stimulating consumers into buying more. Advertising makes people work harder than they otherwise would. This has had the effect of raising the aggregate level of the economy. In the long run, advertising has probably played a major part in making people favorably disposed towards high levels of consumption and in creating new products and ideas. Thus, advertising also increases employment levels, directly and indirectly.

However, with the technological revolution, it has to lead to the creation of several false advert techniques, with flexible laws and liberal implications it has provided a way for negative market disruptions. To control such activities the government should adopt stringent vigilance laws, rigid rules and regulations, prominent legal actions against the entities violation such norms providing a base for consumer-friendly market conditions.


Q1. When was the first advertisement broadcasted on social media?

The first advertisement was broadcasted on Radio by HM Blackwell in the year 1992.

Q2. The sports company who fraudulently advertised that its sneakers are capable of burning Calories?

New Balance was the sports company who claimed that its sneakers are capable of burning calories.

Q3. Which Section of the drugs and magic remedies Act provides for punishment over the publication of advertisements pertaining to the promotion or usage of drugs?

Section 4 of the Drugs and magic remedies Act provides for punishment over the publication of advertisements pertaining to the promotion and usage of drugs.

Q4. Name some of the false advertising techniques?

Mislabeling, failure to disclose and flawed research are some of the false advertising techniques.

Q5. Name some Big advertising frauds by global business companies?

New balance, red bull coca-cola are some of the global business companies that have been recorded with false advertising techniques.


1.  Tyson Quick “ Advertising Evolution: How personalization has improved over time”. Available at: https://instapage.com/blog/evolution-of-advertising (1st July,2020)

2. “A brief look at the history of modern Advertising” Available at: https://www.mdgadvertising.com/marketing-insights/a-brief-look-at-the-history-of-modern-advertising/ .( 25th April,2020)

3. The tint “ The history and evolution of advertising” Available at : https://www.tintup.com/blog/history-evolution-advertising-marketing/ . (29th Junw,2016)

4. The free dictionary “ False Advertising” Available at : https://legal-dictionary.thefreedictionary.com/Types+of+False+Advertising .

5. Rupin Chopra “ Rise in false and misleading advertisement” Available at : https://www.mondaq.com/india/advertising-marketing-branding/932574/rise-in-false-and-misleading-advertisements-amidst-coronavirus-outbreak (13th May,2020)

6. Federal trade commission protection Americans consumers” Advertising and marketing on the internet”. Available at https://www.ftc.gov/tips-advice/business-center/guidance/advertising-marketing-internet-rules-road

7. Business Insider “ False Advertisment” Available at : https://www.businessinsider.in/advertising/18-false-advertising-scandals-that-cost-some-brands-millions/slidelist/51630710.cms

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