April 7, 2022 | 3 minute read

False and Misleading Advertisements in India

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Sharad Vadehra

Managing Partner

Get in touch

Sharad Vadehra

Managing Partner

Advertisements, via both print and digital methods, act as a powerful medium for promotion of a product, brand or service. The main objective of an advertisement is to inform the target consumers of the products and services being offered, convince them into believing that their facilities are finer than the rest and maintaining awareness about their products/ services in the minds of the prospective customers. The advertisements should thus enable a person to make well informed purchase decisions.

Owing to the immense competition in the market, the consequent pressure to attract more consumers, and the constant urge of traders to increase their sales, profits and business, the advertisers often resort to false and misleading campaigns without providing any scientific or clinical data to back their claims. For example, advertisements on health care with unsubstantiated claims about curing Covid-19 or education advertisements with tall claims of job guarantees, etc.

Such false advertisements unquestionably mislead consumers and injure and hurt competitors. They, in fact, breach various rights of the customers such as the right to be informed, to choose and to be safeguarded against potentially dangerous goods and services. The deceptive advertisements therefore have a negative impact on the consumer decisions.

India does not unfortunately have an all-inclusive statutory body for regulation of advertisements. One of the major legislations pertaining to advertisements in India at present is the Consumer Protection Act, 2019 under which the Central Consumer Protection Authority (CCPA) has been established for regulating matters relating to violation of the rights of the consumers, unfair trade practices and false or misleading advertisements which are prejudicial to the interests of public and consumers and to promote, protect and enforce the rights of consumers as a class. Where, pursuant to investigation, this Central Authority is satisfied that the advertisement is false or misleading or in contravention of consumer rights, it has the power to issue direction to the concerned trader/ manufacturer/ endorser/ advertiser/ publisher to either modify the ad or discontinue the same altogether. Further, a penalty extending up to ten lakh rupees (approximately equivalent to USD 13,182) may also be imposed upon the errant manufacturer or the endorser. Thus, the Act also holds the endorser, be it a popular celebrity, responsible for unfair trade practices. The Central Authority further has the power to prohibit the endorser of a false or misleading advertisement from making endorsement of any product or service for a period which may extend to one year and up to three years for every subsequent contravention.

In one of its recent orders, the CCPA noting absence of any compelling study or material indicating worldwide prominence of Sensodyne products, directed the Sensodyne toothpaste to cease the telecast of its misleading commercial within seven days in which it was claimed that the stated toothpaste is recommended by dentists worldwide and that it is the world’s number one sensitivity toothpaste. The Authority also commanded payment of ten lakh rupees (approximately equivalent to USD 13,182) as penalty.

Some of the other laws on misleading advertisements include the Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply, and Distribution) Act, 2003 which prohibits such advertisements which are related to the regulation of trade and commerce and production, supply and distribution of cigarettes and other tobacco products; the Cable Television Networks (Regulations) Act, 1995 which bars any person from broadcasting or re-broadcasting any programme through a cable service unless the same is in conformity with the prescribed advertisement code and also requires that the cable service providers ensure that no such advertisement is aired that is indecent, immoral and has the potential of creating ill-will between different religious groups; and the Indian Penal Code which prohibits obscene, defamatory publications and statements which incite friction or acrimony in the society.

In this regard, it is also imperative to mention the self-regulatory and non-statutory body- the Advertising Standards Council of India (ASCI)- which deals with advertising in India and ensures that moral and ethical practices are followed. It has also developed an ASCI code. The body seeks to ascertain that the advertisements are decent, truthful and harmless while observing fairness and equity in competition.

In conclusion, as discussed in our previous blogs, we reiterate that advertisements, many a times even subconsciously, leave an impressionable impact on the minds of the consumers. The issues of deceptive representations, ambiguous prices, and misrepresentation and falsification of facts by advertisers more often than not leave the Indian consumers exposed and in a vulnerable position.

It is thus important that a unified legal framework is formulated to regulate the advertising industry to ensure of a healthy and ethical competition between companies and to protect the gullible customers from becoming victims of any false advertising.

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