Advertising is considered the most effective way to communicate with clients. By promoting various products and brands, advertising helps customers become more aware of their choices in the market. It caters to people of all ages and utilizes diverse media types, strategies, and methodologies to reach a wider audience. Furthermore, advertising plays a crucial role in consumer protection by addressing the issue of misleading ads. The Consumer Protection Act provides provisions to tackle this problem, but the Indian government has established explicit criteria to ensure fair advertising practices. On June 8, 2022, the Department of Consumer Affairs announced the implementation of the Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 guidelines.
The purpose of these guidelines is to safeguard consumers from being misled by false claims, exaggerated promises, inaccurate information, or misleading statements. Such deceptive practices violate several consumer rights, including the right to be informed, the right to choose, and the right to protection from hazardous products and services, all guaranteed by Section 2(9) of the Consumer Protection Act, 2019.
The Central Consumer Protection Authority has exercised its authority under section 18 of the Consumer Protection Act, 2019, and issued guidelines to prevent misleading advertisements and endorsements. While the definition of ‘misleading advertisement’ is provided under section 2(28) of the Consumer Protection Act, 2019, the guidelines outline a set of qualities and criteria that advertisements should follow to avoid being deemed deceptive. Essentially, the guidelines serve as suggestive standards for advertisements. Conversely, any advertisement that fails to meet the criteria or standards outlined in the guidelines may be considered misleading according to the exclusionary principle.
The key conditions for an advertisement to be considered not misleading set out by the guidelines are as follows:
- The advertisement should be honest and truthful representation;
- The advertisement should not mislead:
- by exaggerating the accuracy, scientific validity or practical usefulness or performance or service of the goods;
- about the nature or extend of the risk to the consumer’s personal security or that of its family, if they do not purchase the advertised product;
- The advertisement does not depict rights granted to customers by any law as a distinguishing characteristic of the advertiser’s offer in any way;
- It does not imply that the claims made in such advertising are generally recognised if there is a large gap between the scientific opinions regarding such claims;
- It ensures that the claims that have not been independently substantiated but are based merely on the content of a publication do not mislead consumers;
- It complies with the provisions included in any other industry-specific laws as well as the rules and regulations enacted pursuant to such laws.
Bait advertisements are promotions that offer goods, products, or services at a low price to attract customers. While the Guidelines do not explicitly prohibit bait advertisements, they do specify certain requirements that must be met. When publishing a bait advertisement, it is crucial to ensure that the consumer can purchase the advertised good, product, or service at the advertised price. Furthermore, there must be sufficient supply to meet the expected demand at the time of publication. If the advertised item is only available for a limited time, this should be disclosed in the advertisement. Any restrictions on the availability or supply of the good, product, or service, such as age or geographic limitations, should be clearly stated. Lastly, there should be no incentives for consumers to buy the item under less favorable market conditions than usual.
The Guidelines place restrictions on the use of surrogate or indirect advertisements. These guidelines prohibit any advertisement that explicitly or implicitly implies that it is for goods or services whose advertising is otherwise restricted or prohibited by law. The concept of “surrogate advertisement” refers to the circumvention of such restrictions or prohibitions by portraying an advertisement as one for other goods or services that are not subject to such limitations.
However, there is a clause that allows the use of a brand that was previously used for “prohibited” goods or services, as long as it does not violate the Guidelines. This clause may seem ambiguous, and it should be read in conjunction with rule 7(2)(viii) of the Cable Television Network Rules, 1994, which outlines the conditions under which the same brand used on “prohibited” goods can be advertised for other permissible goods or services.
Furthermore, advertisements targeting children or featuring children must not exploit their innocence or lack of experience.
Any advertisement that refers to, targets, or uses minors must go by a number of requirements outlined in the Guidelines, which, among other things, state that such advertisements must not:
- condone, encourage, incite, or unreasonably model behaviour that might be risky for kids;
- make any health or nutritional claims or benefits without being sufficiently and scientifically supported by an established body;
- be such as to foster negative body image in kids;
- Exaggerate the features of goods, products, or services in a way that causes kids to have unrealistic expectations of them; etc.
In order to prevent misleading advertisements and endorsements, the Central Consumer Protection Authority has issued guidelines under Section 18 of the Consumer Protection Act, 2019. These guidelines set forth criteria for advertisements that may not be considered deceptive. While bait advertisements are not outright banned, they must follow certain requirements, such as ensuring that the advertised product or service is available at the advertised price and that there is sufficient supply to meet anticipated demand. Surrogate or indirect advertisements are also restricted, and it is not permitted to use celebrities in commercials for products that are prohibited from sale to minors or require a health warning. Advertisements for junk food are not allowed during children’s programming, and disclaimers must adhere to specific rules regarding language, font, placement, speed, and legibility. Penalties for non-compliance with the Guidelines are not specified separately, but the CCPA may use its investigative and enforcement powers as specified in Section 18 of the Act, and fines ranging from INR 10 to 50 lakh may be imposed.
The Consumer Protection Act’s Guidelines are expected to be strict and limit the leeway advertisers had previously when producing and releasing advertisements. They represent a significant shift in the regulatory framework for advertisements, which had mostly been self-regulated through the ASCI Code. The viability of advertising specific goods and services may be affected by the restrictions. For example, “junk food” ads that target children may require significant modifications to comply with the Guidelines. Since the Guidelines apply to all forms and formats of advertising, including unconventional forms such as social media influencers, metaverse ads, non-fungible token ads, and pop-up or disappearing online ads, they must adhere to the Act and Guidelines’ regulations. The Guidelines will be crucial in comparative advertisement/disparagement cases, which were previously only covered by tort law and judicial precedent.
- Consumer Protection Act, 2019
Authored by Vatsal Vatta , Legal Intern, LawDiktat
Edited by Sahid, Team Member, LawDiktat.