Misleading Advertisements Under Consumer Protection Act In India
Author: Aditi Prabhu
Student, School of Law Christ University, Bangalore
Many of us have come across advertisements with our favorite actors/actresses for a product or a service. We immediately go to purchase it, and the actual result of the product/service is a total let down of the version displayed to us. You may now feel like you were lured into buying a product that just seemed special because of your favorite celebrity endorsing it or is it because the company is blatantly portraying their product as something it never was?
Think about the Fair and Lovely ad and the millions of Indian women who wanted to become fair just like Yaami Gautam, and they were crushed because they couldn't attain the “fairness” as portrayed in the ad.
False or misleading advertisements are those that portray a specific product or service in such a way that either omits key details or uses images to trick a viewer into purchasing the item.
WHAT IS A FALSE OR MISLEADING ADVERTISEMENT?
Section 2(28) of the Consumer Protection Act, 2019(hereafter the Act) defines Misleading advertisement concerning any product or service, means an advertisement as that which “falsely describes such product or service; or conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or deliberately conceals important information; gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service;”
Section 2(48)(f) of the Act also defines misleading advertisements as a part of Unfair trade practices, as “making a false or misleading representation concerning the need for, or the usefulness of, any goods or services;”
Misleading advertisements were not specifically covered by the law before the Consumer Protection Act of 2019. Consumers who have been wronged may still be able to seek remedies under Section 2(1)(r) of the Consumer Protection Act of 1986, which defines Unfair trade practices, as well as under Section 36-A of the Monopolies and Restrictive Trade Practices Act of 1969, which has since been superseded by the Competition Act of 2002.
AUTHORITIES UNDER THE COPRA 2019 TO DEAL WITH MISLEADING ADVERTISEMENT
The Central Consumer Protection Authority (CCPA), also known as the Central Authority, was introduced under Chapter III of the Act by the government and given several powers and functions to protect and safeguard consumer interests. One of the goals of the Central Authority is to ensure that “no false or deceptive advertisements are published for any goods or services that violate the terms of this Act or the rules or regulations made thereunder”. Additionally, it intends to stop anyone from taking part in the publication of these advertisements.
Section 10 of the COPRA 2019 establishes the CCPA and grants it the authority to decide on issues relating to “consumer rights violations, unfair trade practices, and false or misleading advertisements that are harmful to the interests of the public and consumers, as well as to advance, defend, and uphold the rights of consumers as a group.”
A complaint alleging unfair trade practices or deceptive advertising may be sent to the Central Authority, the District Collector, or the Commissioner of the regional office. The Director-General or the District Collector may then, per Section 18 of the Act, conduct an investigation or inquiry into the complaint, either on their own “suo-moto” or in response to a complaint or directions from the Central Government.
Role of ASCI
The Advertising Standards Council of India is another reputable organization that monitors deceptive or false advertising (ASCI). The ASCI is a Non-Governmental Organization founded in 1985 in response to the absence of any law governing "advertisement" and "misleading advertisement" under the COPRA 1986 or the MRTP Act, 1969. ASCI has one primary goal- “ to maintain and promote public trust in advertising by ensuring that advertisements adhere to its Self-regulation Code, which requires advertisements to be honest, truthful, decent, against dangerous items, and competitively fair.” The Supreme Court recognized the ASCI's self-regulatory function in Common Cause v. Union of India (2018).  The ASCI is still active today, monitoring compliance with its code of self-regulation and proactively filing complaints against deceptive or false advertising to safeguard consumers' interests.
PENALTY FOR MISLEADING ADVERTISEMENT
If the CCPA is satisfied with the investigation or inquiry performed, the Central Authority may issue directions regarding false advertisements under Section 21 of the Act. The following orders may be issued by the Central Authority if it decides that the
advertisement is deceptive in such a manner that it is harmful to the interests of the general public:
● Impose a fine of up to 10 lakh rupees on the manufacturer or endorser, with the potential to increase to 50 lakh rupees for each subsequent violation.
● Prohibit the endorser from endorsing any product or service for a year, and up to three years for each successive violation.
● Impose a fine of up to 10 lakh rupees on anyone who publishes or is involved in the publication of a fraudulent or misleading advertisement.
Only if the endorser failed to exercise reasonable diligence to confirm the veracity of the claims made in the advertisement for the product they are endorsing may they be held accountable under Sections 21(2) and 21(3) of the act. For instance, if a famous person states in an advertisement that Boost, Horlicks, or Complan may cause a child to grow taller in just a week, they are obligated to check the veracity of their claims. The Central Authority may levy a fine if the endorser's justification is insufficient.
Similar to this, a person or publisher can only be held liable if they can prove that they published or made arrangements to publish the advertisement in the course of their business. They are not entitled to defense if they were aware of the Central Authority's order to withdraw or modify the advertisement in advance.
In the same section, a provision for deciding the quantum of penalty to be followed is as follows- “the number of people and the area affected or affected by the offense, its frequency and duration, the vulnerability of the class of people most likely to suffer harm as a result of the offense, and the gross revenue from the sales effected as a result of the offense.”
The complaint when in a proceeding before consumer commissions, as per Section 39 of the COPRA 2019, the District Commission is satisfied with the findings against the allegations made against the complainant, with regards to the misleading advertisement, the following orders may be issued:
● To issue corrective
PREVENTION OF MISLEADING ADVERTISEMENTS GUIDELINES
The Central Authority published ‘Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements’ on June 9, 2022. These guidelines define "bait advertisement," "surrogate advertisement," and state what "free claim advertisements" are. These recommendations have been developed to protect the interests of children, taking into account the impact it can have on their young minds due to their susceptibility, which makes them an easy target for product sales. The Central Authority has issued this directive to ensure that any advertisement with children as the target audience should ensure that no celebrity from the sports, music, or film industry should be featured, and for such products which require a health warning under the law for such advertisement or cannot be purchased by children. The policy further states that disclaimers, which serve to restrict the company's liability, must not attempt to hide any material facts that would render them misleading or their commercial intent, and that they should not rectify false information contained in an advertisement.
The guidelines also lay down duties to be performed by the manufacturer, service provider, advertiser and advertising agency, and due diligence to be carried out while endorsing, etc.
The CCPA also imposes a penalty on those who violate the directions issued in the guideline for an amount of 10 lakh rupees and 50 lakh rupees for every subsequent contravention.
Consumer Protection Act, 2019, § 2(28), No. 35, Acts of Parliament, 2019(India).
Consumer Protection Act, 2019, § 2(48)(f), No. 35, Acts of Parliament, 2019(India).
Consumer Protection Act, 2019, § 21, No. 35, Acts of Parliament, 2019(India).
The Advertising Standards Council of India, https://ascionline.in/index.php/ascicodes.html (last visited 29th June 2022)
Consumer Protection Act, 2019, § 21, No. 35, Acts of Parliament, 2019(India).
Consumer Protection Act, 2019, § 89, No. 35, Acts of Parliament, 2019(India).
Press Information Bureau, https://pib.gov.in/PressReleasePage.aspx?PRID=1832906 (last visited 1st July,2022)