This article is written by Vernita Jain from, NLIU ,Bhopal as part of internship application at iPleaders.

INTRODUCTION

Any advertisement or promotion through Television, Radio, or any other electronic media, Newspapers, Banners, Posters, Handbills, wall-writing etc. to misrepresent the nature, characteristics, qualities or geographic origin of goods, services or commercial activities so as to mislead the consumer could be broadly defined as a misleading advertisement.

Advertising is the most important and legitimate means by a seller to awaken the interest of the buyer in his product. Advertising industry has become a big business, growing at considerable rate and is on the expansion spree for the last few years and. However, the growth of this industry has given rise to prevalent malpractices carried out by advertisers to have an edge over their competitors in the same industry.

As far as its constitutionality is concerned, an advertisement is often described as commercial speech protected under Article 19(1) (a) of the Indian Constitution[1]. As a facet of the right to information, it facilitates the dissemination of information about the sellers and their products.

 A consumer is considered to be a king/queen and that s/he is considered to be intelligent and the ultimate decision maker with respect to the fortunes of many a company. He has to be protected from the prevalent malpractices of the industry and should be encouraged to give a wider choice of good quality products. This can be achieved by imposing strict regulations to curb malpractices of advertisers.

WHAT IS A FALSE OR MISLEADING ADVERTISEMENT?

India is one of the major contributors in the world trade and business. This in turn results in increased competitions among various producers and businessman. One can go to any extent to win in the battle that he is fighting with  its competitors..One of the ways to increase sales and luring costumers towards them is through advertisements and one can go to any extent to mislead customers.

The consumers are protected under The Competition Act[2] which provides criminal and civil regimes to address false or misleading representations. Under both regimes, the Act prohibits the making, or the permitting of the making, of a representation to the public, in any form whatever, that is false or misleading in a material respect.

‘Consumer trust in advertising relies in no small part on the ability of the industry to effectively and transparently police itself,’

         -Stephen Loerke, Managing Director, World Federation of Advertisers.

 In India, the role of self-regulation is provided by Advertising Standards Council of India with the support of the Advertising Industry. Advertisers (80%) usually comply with the decision of ASCI’s Consumer Complaints Council even if they do not agree with it. A complaint when made to the ASCI regarding any misleading advertisement, if an advertiser does not voluntarily withdraw the offending advertisement, ASCI writes to the media and they stop or refuse it.

According to the act[3], such practises of misleading advertisements are called as one among Unfair Trade Practises. Unfair Trade Practises means that, trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provisions of any services, adopts any unfair method or unfair or deceptive practice.[4]

POSITION IN INDIA

Rule 7(9)[5] prescribes that “No advertisement which violates the standards of practice for advertising agencies as approved by the Advertising Agencies Association of India, Bombay, from time to time, shall be carried in the cable service.”

 The Advertising Standards Council of India (ASCI) is a non statutory Tribunal set up in 1985 and incorporated under section 25 of the Companies Act[6]. It entertains and disposes of complaints based on its Code of Advertising Practice (CAP). The Code is based on fundamental principle, “To ensure the truthfulness and honesty of representations and claims made by advertisements and to safeguard against misleading advertisements”.

 ADVERTISEMENT STANDARDS COUNCIL OF INDIA (ASCI)

For long, advertisements were regulated by the courts, government, tribunals, or police that depended upon the nature of each case. Additionally, absence of a single comprehensive legislation created a lot of confusion in terms of a proper code to follow by the industry and the authority to regulate or guide the pattern of advertising.The duty of the ASCI was to entertain and dispose off complaints based on its Code of Advertising Practice[7].

Gradually, the ASCI Code received huge recognition from the advertising industry, the importance of the ASCI increased with the growing malpractices and the warnings issued by it to the advertisers against the misleading advertisements.Nonetheless, the ever increasing role of ASCI and its importance in regulating advertising practices in India was felt by the government too and the ASCI Code was made compulsory[8] for TV advertisements in August 2006. The Rules regarding the advertisement were also amended as, “No advertisement which violates the Code for Self-Regulation in Advertising, as adopted by the ASCI, Mumbai for public exhibition in India, from time to time, shall be carried in the cable service.”[9] This move has provided a binding effect on the ASCI Code.

One of the overarching goal of ASCI is, to maintain and enhance the public’s confidence in advertising. It is the duty of ASCI to ensure that advertisements conform to its code for self-regulation which requires advertisements to be truthful and fair to consumers and competitors. The advertisements make truthful and honest representations and claims which is essential to prohibit misleading advertisements[10], not be offensive to public decency or morality;  Not promote products which are hazardous or harmful to society or to individuals, particularly minors; and  Observe fairness in competition keeping in mind consumer’s interests. Also, they should be within the bounds of generally accepted standards of public decency and propriety; and not used indiscriminately for the promotion of products, hazardous or harmful to society or to individuals, particularly minors, to a degree unacceptable to society at large, and fair in competition[11].

The main aim of the code[12] is to protect the legitimate interests of the consumers by regulating patently false, misleading, and objectionable advertisements broadcast on television, radio, and internet by advertisers, media, and advertising agencies. Both the advertising agencies and advertisers are required to produce such substantiation as and when called upon by ASCI. Before advertising, marketers must hold documentary evidence to prove all claims, whether direct or implied are capable of objective substantiation; advertisements should comply with the law and should not incite anyone to break it; and consumers should not be encouraged to use products to excess. Products should be safe and without side effects[13].

PROCESS OF COMPLAINT

There are three types of complaints handled by ASCI:

 (a) Complaints from the general public including government officials, consumer groups,    etc.,

 (b) Suo Moto complaints from the member of the ASCI Board, CCC, or the Secretariat and,

 (c) Intra industry i.e. complaints from one advertiser against another.

 The methods of registering a complaint are:

(i) Letter addressed to The Secretary General, the Advertising Standards Council of India, 219 Bombay Market, Tardeo, Mumbai 400 034;

(ii)  Throughemail (asci@vsnl. com; [email protected]);

(iii) Online Procedure: visit ASCI’s website www.ascionline.org and register a complaint. The form is simple and you will get a tracking number which will help you track the progress of the redress of your complaint. You can even download the offending advertisement, which will help speed up the process;

(iv) Phone: you can ring ASCI on 022 23513982 or 022 23521066 or 1-800-22 –2724 (toll free). If the complaint is complete, the decision will be taken by ASCI’s Consumer Complaints Council (CCC) within an approximate period of a month.

All complaints are finally redressed by ASCI’s CCC. This body consists of 21 members – 12 members from civil society and nine from industry. The civil society members consist of consumer activists (women/children/consumers), eminent academicians, journalists, doctors, lawyers and scientists.

On receipt of a complaint, the Secretariat acknowledges the complaint and requests the advertiser or agency to provide comments in respect of the complaint. The CCC decides upon the complaints within a period of 4 to 6 weeks, once the party concerned is afforded an opportunity of presenting its case. If the complaint is upheld, then the advertiser and its agency are informed of the CCC decision within 5 working days. The advertiser is given 2 weeks to comply with the CCC decision. Non-compliant advertisements are published in ASCI’s Media quarterly release on an all India basis[14].

ASCI ON TELECOME SECTORS

In many cases ASCI has cracked the whip on telecom operators, pertaining to false claims and over-the-board promises. Some of the cases against telecom operators are:

The Idea Cellular’s advertisements for IIN (Idea Internet Network) were taken to be misleading. The ads shown basically showcased how Internet can transform lives in rural areas. In one particular video ad, they have shown bias visuals, which give an impression that all women in Haryana are backward. A complaint against this advertisement was launched and ASCI considered it to be misleading.

Vodafone created advertisements with text: “Share photos 43% faster” and “The fastest 3G network”; ASCI rapped them, and asked them to withdraw such misleading ads.

In case of, Colgate-Palmolive (India)  vs Anchor Health & Beauty Care[15],If the advertisement in question sends a message to a man of average intelligence and a weak brain amenable to an advertisement wash, as though the defendant’s product is either the only product containing all 3 ingredients or the first in the market, such a message is misleading. This is exactly why, the first lesson taught to a consumer, in movements to create awareness, is that “every rupee spent on advertisement is a nail on the coffin of consumer’s sovereignty“.

In Eureka Forbes Ltd.,-vs- Pentair Water India (P) Ltd[16], the Karnataka High Court also followed the ratio laid down in all the aforesaid rulings and granted an injunction restraining the defendant from disparaging either UV water purifiers in general or the plaintiffs product Aquaguardin particular.

Hindustan Lever Ltd vs. Colgate Palmolive India Ltd . In the said case, the subject matter of dispute was an advertisement issued by Hindustan Lever Ltd., claiming that its “New Pepsodent” toothpaste was “102% better than the leading toothpaste”. Colgate Palmolive Ltd., filed a complaint on the file of the MRTP Commission under Section 36A {(viii) & (x)} of the MRTP Act. They also moved an application for injunction. In the injunction application, the MRTP Commission recorded a prima facie finding that the reference made in the advertisement to the “leading toothpaste” was that of Colgate. Therefore an interim order of injunction was granted apart from certain directions. The said order was under challenge before the Supreme Court. The Supreme Court refused to interfere with the order on the ground that the interlocutory order passed by the Commission was purely a discretionary order.

Calcutta HC in case of Reckitt Colman vs. M.P.Ramachandran laid down following principles-

 (1) That a person is entitled to claim that his product is the best in the world, even if it is untrue and,

(2) That while doing so he would also be entitled to claim that his product is better than his competitor’s, even if it is untrue.

But with so many regulatory measures and legacy regulators introduced in the recent past, it may not now be possible for manufacturers and marketers of goods and services, even in developing countries, to make “false, misleading and harmful” claims in advertisements.

HAPPENINGS IN U.S.A

 In U.S., the Federal Trade Commission takes care of false and misleading advertisements.

There is a paradigm shift from “competitor’s interest” to “consumer’s interest” in such cases. Section 5(a)(1) of the Federal Trade Commission Act[17], declares as unlawful “unfair methods of competition in Commerce and unfair or deceptive acts or practices in Commerce”. It empowers the Commission to prevent such acts or practices.

DEVELOPMENTS IN U.K

The Advertising Industry in U.K., has been successful in self-regulation. In 1961 with the establishment of Advertising Association established the Committee of Advertising Practice (CAP) began self regulation. The Advertising Standards Authority (ASA) was established in 1962 to ensure compliance with the CAP Code.

 There are 2 Committees known as Committees of Advertising Practice CAP (Broadcast) and CAP (Non Broadcast) which are independently administered by the Advertising Standards Authority (ASA)[18].

The job of ASA is to regulate the content of advertisements, sales promotion and direct marketing in the U.K and make sure that the standards are kept.. The Advertising Standards Codes are separated into Codes for TV, Radio and all other types of advertisements. The fundamental principles underlying the Advertising Standards Codes are that the advertisements should not mislead, cause harm or offence. There are specific rules for certain products and marketing techniques, which include rules for alcoholic drinks, health and beauty, children, motoring, environmental claims, gambling, direct marketing and prize promotions. The majority of U.K., advertising is within the Codes and when the ASA upholds complaints, most advertisers agree to change or remove the advertisement. If they do not, ASA relies on the backing of the Office of the Fair Trading (OFT)[19]

. In essence there are 3 different authorities in U.K., viz.,(1) The Director General of Fair Trade, to consider complaints against regular advertisements, (2) the IBA to consider complaints about commercial radio and television advertisements and (3) the Cable Authority to consider complaints about misleading cable advertisement[20]s.

RECENT DEVELOPMENTS

The ASCI pulled up Hindustan Unilever (HUL) for advertisement of its water purifier product ‘Pureit Ultima’ “The TVC of Pureit Ultima claims, ‘Pureit Ultima RO+UV. Sirf is mein hai Purity Indicator jo saaf saaf dikhata hai ki paani kitna pure hai’, which was false and misleading.

Similarly, complaint against LG Electronics was upheld as its advertisement “claims India’s only true water purifier which was not adequately substantiated.”

Complaint against Bharti Airtel was upheld for its Airtel Broadband advertisement claiming “offer of Airtel Broadband — 60 GB @ Rs 1099 with unlimited calls, was not substantiated with evidence of the customers who have availed this scheme.” Regarding an advertisement of VLCC, ASCI said the claims were considered to be misleading.

[1] Article 19(1) (a) talks about: to freedom of speech and expression;

[2] The Competition Act, 2002

[3] Ibid.

[4] M/S.Philips Medi. … vs M/S.Indian Mri Dia. & Res. Ltd. & …

[5] Rule 7(9) the Cable Television Network Rules, 1994

[6] Companies Act, 1956.

[7] Called the “ASCI Code”

[8] Gazette of India, Extraordinary (Part II- section 3(i)) dated August 2, 2006 issued by the Government of India.

[9] “Advertising and Promotion: an IMC Perspective” by  Shah Kruti, and D’Souza Alan,(2009),Tata McGraw-Hill Education

[10] Jain ANiruddha in her article “ Misleading Advertisements: Concepts, Concerns and remedies”

[11] Ibid.

[12] Supra N. 5

[13] See , http://www.india-seminar.com/2013/647/647_alan_collaco.htms

[14] “Regulation by advertisement by advertising regulating council of India: A Critical Appraisal” by Nirmala.K and M.D Krishna.

[15]  Colgate-Palmolive (India) … vs Anchor Health & Beauty Care 2009 (40) PTC 653 (Mad.)

[16] In Eureka Forbes Ltd.,-vs- Pentair Water India (P) Ltd[16] 2007 (4) Kar.L.J. 122

[17] Ibid.

[18] “Media & Entertainment Law” by   Smartt  Ursula .

[19] Supra N. 16

[20] Ibid.