Advertisements or AD’s are something that every modern-day human being watches every day. These have become an intrinsic part of every product marketing strategy. But many times companies the extreme way of falsely implying facts about their products to the consumers. Such false, puffed up and misleading advertisements are an injustice to consumers and do not allow them to know the truth bout the commodity they are buying. The article studies the same and acknowledges the steps which can be taken by a consumer when they come across a false advertisement.
Advertising the products amongst a large group of people has been a successful marketing practice for a decade now. From the most famous products to some of the locally produced items, advertising is a well-known process known to every human in the modern world. Unique and crowd-appealing advertisements are made to ensure that the brand name is stuck within the minds of the consumer. The power of advertising is such that when a commodity comes to our mind, the very first name which would strike us would be of the brand which has been advertised the greatest number of times in front of our eyes.
But these advertisements many times take the extreme ways and divulge information which is either not true or is misleading. Such false advertisements are an injustice to the consumers. Many laws guard consumers against such misleading, misrepresented, puffed up, and false advertisements. These shall be discussed in the article further.
What are advertisements?
Advertisement is a marketing practice that is used by the producers to communicate directly to the consumers. Through the means of advertising, the consumers are made aware of their products and are persuaded to buy the products which are being advertised. It differs from the conventional methods of selling personally as the message communicated is to the public at large.
The message is communicated through the means of mass media like
- Hoardings and billboards
- Social media sites
- Text messages
Through these means of communication, the consumer is helped in taking the right and informed decision. But also, the brand name of the product is made to be stuck in the minds of the consumers. The marketing is such that whenever the consumers will think of that commodity, the first thing that would flash in their minds would be the name of the most famous brand.
For example: whenever in India someone talks about buying salt then the very first brand name which flashes in their mind is TATA Salt. This was made possible because of the well planned and highly successful network campaigning adopted by the company since the very beginning. It’s tag line Desh ka Namak is fresh among every Indian’s mind.
The objective of the advertising
After looking at the purpose of advertising, one can shortlist the following objectives of advertising:
- Making the consumer aware of the presence of our product in the market.
- To create a brand image and customer loyalty in the market.
- To increase the sales as well as demand for the product in the market.
- Create goodwill of the product amongst the consumers. More the goodwill more will be positive advertising and loyalty from the customers.
- Acknowledge the consumers about the essential details of the product like price, quantity, and nutritional value.
- Inform the customers about the changes with regards to change in price, quantity, packaging, or for introducing a new composition of that product.
Laws related to advertising
ASCI (Advertising Standards Council of India)
The Indian advertising market is monitored and guided by a non-statutory body, the Advertising Standards Council of India (ASCI). It is a self-regulatory body established in 1985 with the purpose of :
- Ensuring true and honest representation and claims to be made in the advertisements.
- Advertisements to not be offensive with regards to generally accepted standards of public decency.
- To ensure that indiscriminate use of advertisements should not be done for the promotion of products regarded as hazardous to society or individuals.
- To ensure fairness in competition so that the consumers can make a choice while observing generally accepted competitive behavior in the business.
To regulate the advertisements, ASCI has also adopted a code for self-regulation in advertising known as the ASCI code. This code applies to advertisements read, heard, or viewed in India and even applies to those advertisements made abroad. All advertisements which are meant to be viewed by Indian Consumers have to follow the ASCI code.
Products banned from advertising as per other laws
As per section 5(1) of the Cigarettes and other Tobacco products (prohibition of advertisements and regulation of trade and commerce, production, supply, and distribution) act, 2003 prohibits the advertising of tobacco and related commodities.
- Organ transplantation
Transplantation of Human Organs Act, 1994 prohibits commercialization of dealings in human organs. Any kind of publishing or distribution of any advertisement with regards to dealings in human organs is prohibited.
- Legal services
The rules formulated by the Bar Council of India under the Advocates Act, 1961 strictly enforce the ban on advertisement and publicity of law firms. These rules were formulated to curb false advertisement of lawyers to gain publicity and to attract clients.
The Cable Television Network Rules, 1994, The Advertising Codes of Doordarshan and the All India Radio and Norms for Journalist Conduct issued by the Press Council of India prohibits any kind of advertisement which intends to directly or indirectly promote the production, sale, or consumption of alcoholic substances. Even the use of minors for advertising alcohol on billboards and signboards is prohibited.
What are false advertisements?
When an advertisement is deceptive, misleading, and gives a wrong impression about the product to the consumer then the advertisement is called a false advertisement. An advertisement can be categorized as misleading if under the following conditions:
- If it has misrepresentation, omission, or practice which misleads the consumer.
- If it has misrepresentation, omission, or practice which harms the business interests of another company.
- False or misleading comparison of goods during the process of advertising.
- Fraudulent use of another’s trademark, firm name, product labeling, or packaging.
- Unauthorized use of confidential, scientific, technical, production, business, or trade information.
An orange juice brand ‘VS’ claimed in its advertisements that each of its 200 ml pack carried the orange juice of three whole oranges. But the truth is that the pack did not consist of actual orange juice, but just orange extract and preservatives. So by advertising the misleading information the advertisement made by VS would be a false advertisement.
Laws related to false advertisements
Consumer Protection Act, 1986
The Consumer Protection Act, 1986, is to be followed for advertising all the products that are present in the market place. A consumer may file a complaint regarding false and misleading advertisements under the said act. Under the Act, misleading advertisements are under the definition of “Unfair trade practice” i.e. a trade practices which is used for promoting the sale, or supply of any goods or for providing any service by adopting any unfair practice including the following:
- The exercise of making any statement, whether orally or in writing or by visible representation which
- Falsely represents that the goods are of a certain standard, quality, quantity, grade, composition, style, or model
- Represents falsely that the services are of a certain standard, quality, or grade
- Falsely denotes any re-built, second-hand, renovated, reconditioned, or old goods as new goods
- Represents that the goods or services are having some sponsorship, approval, performance, characteristics, accessories, uses, or benefits which such goods or services actually do not have
- Represents that the seller or the supplier are having a sponsorship or approval or affiliation which such seller or supplier actually does not have
- Makes a false or misleading depiction about the necessity for, or the usefulness of, any goods or services
- Gives to the public any warranty or guarantee of the performance, efficiency, or life length of a product or of any goods which is not based on a proper test
- Makes a public representation in a form that means to be a warranty or guarantee of a product or of any goods or services or a promise to replace, maintain or repair an article or any part or to repeat or continue a service until it has achieved a specified result, if such claimed warranty or guarantee or promise is immensely misleading or if there is no reasonable way that such warranty, guarantee or promise will be performed
- Significantly misleads the public about the price at which a product or similar products or goods or services, have been or are, usually sold or provided, and, for this purpose, a depiction as to price shall be provided by suppliers relevant market unless it is specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made
- Gives false or misleading facts disapproving of the goods, services, or trade of another person.
- Permits the publication of any advertisement either in any newspaper or any other medium, for the sale or supply at a bargain price, of goods or services that are not proposed to be offered for sale or supply at the bargain price, or for a period that is, and in quantities that are, rational, with regards to the nature of the market in which the business is carried on, the nature and size of the business, and the nature of the advertisement.
- Withholding from the participants of any scheme which offers gifts, prizes, or other items free of charge, at its end the information about the final results of the scheme.
- Permits the sale or supply of goods proposed to be used, or are of a kind likely to be used, by consumers, knowing that the goods do not comply with the standards prescribed by the competent authority with regards to performance, composition, contents, design, constructions, finishing or packaging as prescribed to prevent or reduce the risk of injury to the person using the goods.
- Allows the hoarding or demolition of goods, or refuses to sell the goods or to make them available for sale or to provide any service, if such hoarding or ruining or refusal raises or tends to raise or is intended to raise, the cost of those goods or other similar goods or services.
- Manufacturing of counterfeit goods or offering such goods for sale or adopting dishonest practices in the provision of services.
The consumer courts can, however, take various measures and actions if he encounters any unfair and restrictive trade practice. The measures are:
The court can issue interim orders stopping such advertisements and also award compensation for loss or suffering
The court can also ask the advertiser to issue a correct advertisement.
Advertising Standard Councils of India (ASCI)
In August 2006, the ASCI Code was made changes in rules for TV advertisements by amending the Cable Television Networks (Amendment) Rules, 2006. According to Rules of ASCI, advertisements should not be discriminatory on grounds of race, caste, etc. If any advertisement tends to provoke people to do a crime, cause disorder, or any incident or show of any vulgarity then such advertisements should be stopped immediately. For resolving the disputes relating to such matters the Consumer Complaints Council (CCC) was also established.
Press Council of India (PCI)
It is a statutory, quasi-judicial body that acts as a watchdog of the press. It decides the complaints against and by the press for violation of ethics and for violation of the freedom of the press respectively. If one has a complaint against a newspaper, for any publication which he/she finds objectionable and affects him /her personally, or non-publication of material, he/she write it to PCI. It should be specified that in what manner the publication/non-publication of the matter is objectionable within the meaning of the Press Council Act, 1978, and enclose a copy of his/her letter to the editor, pointing out why he/she considers the matter objectionable. If the Council is prima facie satisfied that the matter reveals sufficient ground for investigation then it issues notice to the newspapers and then contemplates the matter through its Inquiry Committee based on written and oral evidence presented before it.
- Red Bull case- United State of America
The Austrian energy drink company, Red Bull was sued in 2014 for its slogan of ‘Red Bull gives you wings’ by Benjamin Careathers (first plaintiff of the case). He had sued the company on the grounds that even after 10 years of consumption he did not find any development of wings on his body, neither any increase of physical or mental strength was observed. According to him, the benefit of Red Bull was no more than a cup of coffee and so the advertisements as aired by Red Bull were misleading the consumers. The suit ended outside the court with Red Bull passing a total claim of $13 million to all its consumers.
- The Volkswagen Case- United States of America
In 2016, the Federal Trade Commission (FTC) had filed a suit against the company Volkswagen for cheating on its emission tests continuously for seven years. Whenever the cars would be tested for the emission of pollutants, a sensor system within the cars would reduce the exhaust of harmful pollutants temporarily. This would fool the testers and show a substantially less amount of pollutants emission by the car. For this, the suit ended with Volkswagen paying a fine of $90 billion for violating the laws of the Clean Air Act.
- Colgate-Palmolive (India) Limited vs. Anchor Health & Beauty Care Private Ltd, 2009
Colgate-Palmolive had approached the court on the ground that the respondent, Anchor Health was using the words “only” and “first” in its toothpaste. According to the petitioners, the advertisement tried to say that this was the ‘only’ toothpaste containing all the 3 ingredients Viz., calcium, Fluoride, Triclosan and it was the “first” of all kinds of toothpaste to provide all-round protection. The petitioners pleaded that even their products have all the 3 ingredients and these ingredients were prevalent even before Colgate had established itself as a pioneer in the world of dental care. The claims made by Anchor were contented to be false and the advertisement had contended to be a false and misleading one.
The court after a detailed analysis of various case law and provision concluded that the reasons behind the use of the words “only” and “first” are not reasonable. The advertisement actually gives out the impression that Anchor is the only toothpaste containing all three ingredients. Similarly, the use of the word “first” is not in regard to the slogan “all-round protection” as it is proposed to project. The words “only” and “first” fall under the pursuits of Section 2(1)(r)(1)(i) of the Unfair Trade Practices and Section 47(vi) of the Consumer Protection Act, 1986. Thus, Anchor was barred from using the said words in their advertisement.
- Horlicks Ltd and Anr. v. Heinz India Pvt. Ltd., 2018
An application filed by Horlicks Limited for an interim injunction against the publication of certain allegedly withering advertisements by Heinz. The health drink Complan, manufactured by Heinz claimed in one of its advertisements that one cup of that drink carried protein equal to protein in two cups of Horlicks. Justice Manmohan presented his results on the idea that commercial speech is a protected category of speech under Article 19 (1) (a) of the Constitution. The Hon’ble Judge examined the impugned advertisement and found it to be non-degrading to the reputation of Horlicks. The advertisement was not degrading because it was supported by medical pieces of evidence and proofs in the court. Thereby the advertisement was not misleading and the petition was dismissed.
The aim of incorporating all these provisions is to prevent and bar such practices that are deceptive or unfair to consumers. Trade and commerce are expanding day by day. The nature of rivalry and struggle among various products, goods, and services have become ferocious now. In this context, one of the substances of these provisions is to give high priority in these matters which relate to the basic requirements of life and have a serious influence upon helpless, poor, elderly people and children of our society who are a part of a huge consumer society. The purpose of these provisions is to extend defense to the final consumers’ goods and users of services and also to protect them from objectionable practices by the business community. The consumers must get what is promised by the seller or service providers. By any method, any quality, anywhere, is a belief which is created in the minds of the consumers about some quality or usefulness of goods or services, but in fact, by providing the goods and services that do not have the standard, will be unfair to consumers and will certainly amount to unfair trade practice.
Frequently Asked Questions (FAQ’s)
- What is an advertisement?
Ans. Advertisement is a marketing practice that is used by the producers to communicate directly to the consumers.
- What is a false advertisement?
Ans. When an advertisement is deceptive, misleading, and gives a wrong impression about the product to the consumer then the advertisement is called a false advertisement.
- Under what provisions can a false advertisement be punished?
Ans. A consumer may file a complaint regarding false and misleading advertisements under the Consumer Protection Act. One can also approach the PCI if a violation of ethics has been done by the press.
- How does ASCI help in fighting false advertisements?
Ans. To regulate the advertisements, ASCI has adopted a code for self-regulation in advertising known as the ASCI code. This code applies to advertisements read, heard, or viewed in India and even applies to those advertisements made abroad. All advertisements which are meant to be viewed by Indian Consumers have to follow the ASCI code.
- Under what provision are advertisements of alcohol barred in India?
Ans. The Cable Television Network Rules, 1994, The Advertising Codes of Doordarshan and the All India Radio and Norms for Journalist Conduct issued by the Press Council of India prohibits any kind of advertisement which intends to directly or indirectly promote the production, sale, or consumption of alcoholic substances.
 Included under the definition of unfair trade practises, Section 47 of Consumer Protection Act
 Chapter III, rule 3.1 (b) The Code for Self-Regulation of Advertising Content in India
 40 PTC 653 Mad