Consentia on Multidisciplinary Research

A CRITICAL COMPARATIVE STUDY OF MISLEADING ADVERTISEMENTS IN INDIA: WITH SPECIAL REFERENCE TO FOOD, DRUGS AND COSMETICS

“Advertising may be described as the science of arresting human intelligence long enough to get money from it”      -Stephen Leacock.                                                                                                                                  

INTRODUCTION:

After globalization, India is rapidly embracing consumerism. Competition in the market has increased manifold and the producers face an increasing need to attract customers to buy their products. Therefore, a lot tactics are employed to lure the audience. As long as the techniques used are fair, there will be a healthy competition, which will translate to the benefit of the consumers. But the problem arises when misleading tactics are used. These misleading advertisements have an adverse impact on the customers. False and misleading advertisements in fact violate several basic rights of consumers: the right to information, the right to choice, the right to be protected against unsafe goods and services as well as unfair trade practices. Hence, a check on misleading advertisement becomes imperative.

Advertising affects society and gets affected by it. It is therefore, necessary to use this weapon with caution to avoid a corrosive effect on social values. In the era of globalization, advertising plays a major role in the competitive business world. Many industries capitalize on the power of advertising to attract or to win customers away from their business rivals.

The impact of advertising is so huge that it causes many people to purchase things that they do not want initially. The advertisement has a very strong psychological impact. Even if a person is not in a need of a product, advertisements create an urge in him/her to buy the product. Advertisement is a means by which a seller approaches the buyer. An advertisement will be successful if it evokes confidence in the public. Therefore, any practice which tends to impair this confidence should not be permitted.

According to Mary Gardiner Jones,[1] “advertisements today are said to be primarily designed to communicate by evoking the overall feelings of their audience and associating their expectations and desires – both material and psychological in some way with the product. As one advertising expert puts it, “the role of advertising is to connect human desires with production and so to create mass markets and to make the satisfaction and these desires an economic function.”

A well-organized advertising also enables the consumer to make an informed choice of the goods he/she chooses to buy. Hence, it is understood that advertising is important and it is also understood that prevention of misleading advertisements is also equally important. Misleading advertisements distort competition and of course, consumer choice.

At the International scenario, The United Nations Guidelines for Consumer Protection (UNGCP) act as an international reference point of the consumer movement. Taking into account the interests and needs of consumers in all countries, particularly those in developing countries, recognizing that consumers often face imbalances in economic terms educational levels, and bargaining power, and bearing in mind that consumers should have the right of access to non-hazardous products, as well as importance of promoting just, equitable and sustainable economic and social development, these guidelines for consumers protection have been framed.

The United Nations Guiding Principles on Business and Human Rights (UNGP) are a global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity. On June 16, 2011, the United Nations Human Rights Council unanimously endorsed the Guiding Principles for Business and Human Rights, making the framework the first corporate human rights responsibility initiative to be endorsed by the United Nations. The UNGP encompass three principles outlining how states and businesses should implement the framework: (1) the state duty to protect human rights; (2) the corporate responsibility to respect human rights; and (3) access to remedy for victims of business-related abuses. The UNGP have received vast support from states and civil society organizations, as well as from the private sector.

ADVERTISEMENT UNDER CONSTITUTION OF INDIA

Commercial Advertisement comes within the domain of freedom of speech and expression guaranteed under Article 19 (1) (a) of the Constitution of India. However special restraint is needed in commercial speech including advertising. There is no doubt that Article 19(1)(a) ensures Right  to freedom of speech and expression but it is not an absolute right, Article 21- Right to life and personal liberty, Article 38 -State to secure a social order for the promotion of welfare of the people, Article 304-Restrictions on trade, commerce and intercourse among States. There are many other legislation to protect such misleading advertisements such as Monopolies and Restrictive Trade Practices Act, 1969,Competition Act 2003, The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954, The Food Safety and Standards Act, 2006, Legal Metrology (Packages Commodities )Rules 2011, Legal Metrology Act 2009 ,The Drugs and Cosmetics Act, 1940 etc but the point where these legislations fails is that it is not comprehensive & due to not implementing the provisions strictly & properly.

MEANING OF MISLEADING ADVERTISEMENT:

The term misleading advertisement has not been specifically defined under the Consumer Protection Act, 1986 or any other legislation in India. However, Section 2(1)(r) defines the term ‘unfair trade practice’ (r) “unfair trade practice” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely:–

(1) the practice of making any statement, whether orally or in writing or by visible

representation which,–

(i) falsely represents that the goods are of a particular standard, quality, quantity, grade, composition, style or model;

(ii) falsely represents that the services are of a particular standard, quality or grade;

(iii) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;

(iv) represents that the goods or services have sponsorship, approval, performance,

characteristics, accessories, uses or benefits which such goods or services do not have;

(v) Represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier does not have;

(vi) makes a false or misleading representation concerning the need for, or the

usefulness of, any goods or services;

(vii) gives to the public any warranty or guarantee of the performance, efficacy or length of life of a product or of any goods that is not based on an adequate or proper test

thereof: Provided that where a defence is raised to the effect that such warranty or guarantee is based on adequate or proper test, the burden of proof of such defence shall lie on the person raising such defence;

(viii) makes to the public a representation in a form that purports to be–

(i) a warranty or guarantee of a product or of any goods or services; or

(ii) a promise to replace, maintain or repair an article or any part thereof or to

repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out;

(ix) materially misleads the public concerning the price at which a product or like

products or goods or services, have been or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly 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;

(x) gives false or misleading facts disparaging the goods, services or trade of another person under which misleading advertisements may be covered.

The Major Law Lexicon[2] defines ‘Misleading Advertisement’ as, “Advertising that deceives or is likely to deceive those to whom it is addressed or whom it reaches and, because of its deceptive nature, is likely to affect consumers’ behaviors or injuries or is likely to injure a competitor”.

Identifying misleading advertisements

An advertisement is called deceptive when it misleads people, alters the reality and affects buying behavior[3]. According to Federal Trade Commission (USA) deception occurs when –

  1. There is misrepresentation, omission, or a practice that is likely to mislead.
  2. The consumer is acting responsibly in given circumstances
  3. The practice is material and consumer injury is possible because consumers are likely to have chosen differently if there is no deception[4].

In India, due to severe restrictions on advertising certain products like alcohol, tobacco products, medicines and baby food, a whole genre of misleading / surrogate advertising has emerged. In such advertising, a brand is endorsed using a product different from the actual product being promoted. Like in the matter of United Breweries Limited vs. Mumbai Grahak Panchayat, the matter of debate included the advertisements of Bagpiper Soda. This advertisement was held to be a surrogate advertisement for Bagpiper whiskey. The National Consumer Disputes Redressal Commission, New Delhi, held that the word “soda” was used in an inconspicuous manner, while the word “Bagpiper” was boldly stated, with the baseline “India’s largest, World’s No. 3”[5]

Examples and instances of Misleading Advertisements on Food

  • The National Survey on Milk Adulteration 2011 (snap shot survey) was conducted by the Food Safety and Standards Authority of India to ascertain the quality of milk and identify different type of adulteration in the liquid milk throughout the country[6]. The survey was carried out by the Regional Offices of the FSSAI located at Chennai (Southern Region), Mumbai (Western Region), Delhi (Northern Region), Guwahati, (North Eastern Region) and Kolkata (Eastern Region) with the following objectives:

1. To identify the common adulterants in milk in rural and urban areas of different states.

2. To find out the non-conforming samples in loose and packed milk.

The samples were collected randomly and analyzed from 33 states & the total sample size was 1791[7].

The samples were sent to the govt. laboratories namely, Department of Food and Drug testing, Government of Pondicherry, Central Food Laboratory, Pune, Food Research and Standardization Laboratory, Ghaziabad, State Public Health Laboratory, Guwahati and Central Food Laboratory, Kolkata for analysis. The following parameters were analyzed such as Fat (%), SNF (%), Neutralizers, Acidity, Hydrogen Peroxide, Sugar, Starch, Glucose, Urea, Salt, Detergent, Skimmed milk powder, and Vegetable fat to ascertain the presence of adulterant.

The total conforming samples to the FSSA standards were 565 (31.5%). The total non-conforming samples were found to be 1226 (68.4%).

The non-conformity of samples in rural areas were 381(31%) out of which 64 (16.7%) were packet samples and 317 (83.2%) were loose samples respectively and in urban area the total non confirming samples were 845 (68.9%) out of which 282 (33.4%) were packed and 563 (66.6%) were loose samples which is shown the below flowchart.

Samples
Rural Area

381 (31%)

Urban Area

845 (69%)

 

Packet samples

64 (16.7%)

90

Loose samples

317 (83.3%)

 

Loose samples

563(66.6%)

 

Packet samples

282 (33.4%)

 

T

the deviations were found highest on account of Fat and SNF content in 574 samples (46.8%) of the total non–conformity, which includes 147 samples with detergent and two samples with neutralizers respectively. Detergent was also found in 103 samples (8.4%). Perhaps the reason may be dilution of milk with water. The second highest parameter of non conformity was the Skim Milk Powder (SMP) in 548 samples (44.69%) which includes presence of glucose in 477 samples. Glucose would have been added to milk probably to enhance SNF. The presence of Skim Milk Powder indicates the reconstitution of milk powder.

The non-conforming sample in the descending order of percentage with respect to the total sample collected in different states were as all the samples in Goa and Pondicherry conformed to the standards[8].

Findings of the Survey

(1) The study indicates that addition of water to milk is most common adulterant. Addition of water not only reduces the nutritional value of milk but contaminated water may also pose health risk to the consumers.

(2) It also shows that powdered milk is reconstituted to meet the demand of milk supply. All state /UT enforcement authorities may specifically check whether the declaration of new FSSAI rules is being complied to.

(3) The study also indicated the presence of detergent in some cases. Consumption of milk with detergent may cause health hazards and indicates lack of hygiene and sanitation in the milk handling.

  • On 16 Mar 2012, Companies such as Complan, Horlicks , Britannia, Bournvita, Pediasure, Kellogs Special K, Rajdhani Besan, Kissan & many more Big Food Brand hide the harmful effects by misleading the consumers for selling their products in India by giving false promise to consumers[9].

 Horlicks and Complan is criticized in India over claims they can help children pass exams. The makers of the classic British bedtime and energy drinks Horlicks and Complan have been criticized over claims that they can help children pass their exams. Similar claims in an advertisement on British television, that Horlicks makes children “taller, stronger, sharper,” were rejected in a ruling by the UK Advertising Standards Authority.

Campaigners in India said the local commercials exploit the anxiety of parents for their children to do well in examinations – and become celebrated ‘class toppers’ – with unsubstantiated claims. According to advertisements on Indian television, children who drink the energy drink Complan twice a day soon become “exam ready.” It asks parents if their children “forget things they learn for their exams?” and suggests two cups of Complan “will charge your children’s brain and improve their ability to retain what they learn.” Horlicks, which in India is fortified with supplements and vitamins, claims it “builds up attention, concentration and makes children stronger by making both the brain and the body ready for exams”.

GlaxoSmithKline, the British company which makes Horlicks says its claims are backed by tests carried out at India’s National Institute of Nutrition in Hyderabad, which were upheld the college’s Scientific Advisory Committee. Critics however said the tests were carried out on a small sample size and that the claims would not be allowed to be made in developed countries. The Advertising Standards Council of India should take notice of these misleading advertisements and completely ban them[10].

On Tue 26 November, 2012India’s food regulatory agency has indicted several household brands, including Britannia biscuits, Kellogg’s breakfast cereals & Horlicks health drinks, for what it says are misleading claims about some of their food products[11].

The Union government informed Parliament about the health ministry’s Food Safety and Standards Authority of India (FSSAI) has initiated prosecution in 19 cases where companies have been charged with making misleading claims about their food products in either labels or advertisements.

These various companies appear to have either made false or dubious claims or released misleading advertisements about their food products. Several of the complaints had been reported earlier but they have now been put in the public domain through the official statement in the House. The country’s food standards laws impose certain restrictions on nutritional and health claims on labels and in advertisements to ensure that products are not mislabelled or promoted through exaggerated claims.

The safety watchdog is prosecuting manufacturers of several children’s health drinks, including Complan Memory, Boost, Horlicks and Bournvita Little Champs, for what it says are “violations” of food regulations[12].The claims relating to the growth of children made by the makers of Complan were “exaggerated”.

The food regulator has also objected to GlaxoSmithKline Consumer Healthcare’s claim that its drink called Boost “provides three times more stamina than sadharan chocolate drink”. The FSSAI said this claim was misleading and the producer had not submitted a specific study on this product to substantiate this claim.

The FSSAI has said that GlaxoSmithKline’s claim that Horlicks helps children become “taller, stronger, and sharper”, is “misleading and deceptive in nature”.

The agency has described the claim made by Kellogg that people who eat low-fat breakfast like its Special K cereals tend to be slimmer than those who don’t as “misleading and deceptive”. An expert in human nutrition said that while children’s health drinks are designed to deliver concentrated levels of nutrients, they typically do not contain the mix of fiber and range of nutrients available from wholesome food.

The labels should always show what a product contains, not what is missing. The FSSAI is also prosecuting the producers of two brands of edible oil ‘ Saffola and Engine Mustard Oil ‘ for what it says are misleading claims in advertisements.

The FSSAI has also indicted Abbott India for what it says is the company’s misleading claim that its product, Pediasure, which claims that it “helps in a child’s growth and development”[13].

Examples and instances of Misleading Advertisements on Pharmaceuticals Promise to cure horrible diseases like cancer and AIDS while Drugs and Magic Remedies Act states that no medical practitioner should give a claim to cure for such diseases as specified in the Schedule under section 3.

  • New Delhi, Dec. 15 2012[14]: A children’s vaccine against a stomach infection has triggered controversy with some doctors claiming there is not enough data to show it is effective in India and accusing a leading drug company of using a misleading advertisement to promote the vaccine.

GlaxoSmithKline Pharmaceuticals (GSK) has stopped the advertisement for the vaccine intended to protect children from potentially life-threatening rotavirus infections after the advertising industry’s self-regulating body upheld a doctor’s complaint that it was misleading.

A New Delhi-based physician, Nalini Abraham, had complained to the Advertising Standards Council of India that GSK’s advertisement shown on two television channels had wrongly claimed that the vaccine is the only way to reduce the incidence of rotavirus infections. She said the virus is ingested through contaminated food, and hygiene can reduce the spread of the infection.

The vaccine was expensive and people were being fooled into spending money for a vaccine that has not been proven to be effective in reducing the overall incidence or the numbers of deaths from diarrhea in India. The ASCI examined the complaint and the company’s response and ruled that the claim in the advertisement was “inadequately substantiated” and “misleading”. GSK was told by ASCI to discontinue the advertisement[15].

  • A medical practitioner advertising his clinic and claiming that he offered a definite cure for epilepsy; Indian Medical Association (IMA) in this case declared him a fraud based on the findings of the committee that he was giving his patients lethal drugs in high doses. Then following a complaint from a Consumer, Advertising Standards Council of India (ASCI) held that advertisement violated the Drugs and Magic Remedies (Objectionable Advertisements) Act. Yet, the practitioner continued to advertise and the drug control departments failed to act, resulting in thousands of consumers falling into the false advertisements[16].
  • Consumer Education and Research society, Ahmedabad, brought to notice of regulatory authority in Gujarat, sale and promotion of certain health gadgets by Conybio Health Care, in violation of Drugs and Magic Remedies (Objectionable Advertisements) Act. Company was found promoting and distributing sun shade to cure from migraine and sun stroke, socks for acidity, pillow covers for spondylitis, palm guards for Parkinson’s disease, eye-shade for sinusitis, T-shirts for high or, low blood pressure, short pants that cure gas, acidity, prostate, piles, urinary system problems, bed sheets for paralysis strokes. When the regulator asked the company to produce scientific evidence to support the effect of infrared rays which it claimed to be present in the products, the company said it had never undertaken such studies by any recognized Indian Misleading Advertisements and Consumers Institute. Subsequently, the regulator prohibited the sale and promotion of the products.
  • False and misleading advertisements pertaining to health cures can be found in abundance on the World Wide Web too. Among such websites were those that promoted slimming and weight loss cures; all purpose pills that alleviated anything from arthritis, diabetes, hypertension, heart disease to kidney problems, tuberculosis, asthma and hepatitis; herbal products and magnetic devices that treated anything from headache and back injuries to insomnia, arthritis, and sprains[17].
  • On 25th February 2013, a total of 630 cases were registered for investigations and 69 prosecutions were launched for misleading advertisements related to medicines between 2010-12.The misleading advertisements relating to drugs are dealt under the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954. Similarly, 57 food items have been identified whose advertisements in print and electronic media were found to be misleading by the Food Safety and Standards and Authority of Indian officials. The statutory authority monitors labels on various food items and claims made in advertisement of food items[18].

Types of Advertisements

There are various types of misleading or false advertisements and they can be categorised as under:

1. Comparative advertising

Some advertisements or sales material may compare products or services to others on the market. These comparisons may relate to factors such as price, quality, range or volume. Comparative advertising can be misleading if the comparison is inaccurate or does not appropriately compare products. A comparative advertising campaign may involve printing a side-by-side comparison of the features of a company’s products next to those of its competitor. Comparative advertising is not used solely for the promotion of a product or service. It has become a common technique used in political advertisements, with one candidate listing how he or she would not have made the same specific decisions as the incumbent if elected. This type of advertising is popular with companies releasing new products, as the focus of the ad will be how the new product is better than products already on the market.[19]

This should not be confused with parody advertisements, where a fictional product is being advertised for the purpose of poking fun at the particular advertisement, nor should it be confused with the use of a coined brand name for the purpose of comparing the product without actually naming an actual competitor.[20]

One case, however, has marked a significant departure from the traditional approach to commercial puffery (where there is no disparagement). In the case of Colgate Palmolive (India) Limited v Anchor Health & Beauty Care Private Limited,[21]where a judge at the High Court of Madras held that false claims by traders about the superiority of their products, either directly or by comparing them against the products of their rivals, were not permissible. In this case, an advertisement was telecast by the defendent, Anchor, claiming that:

• its product was the only toothpaste containing the ingredients calcium, fluoride and triclosan;

• it was the first all-round protection toothpaste;

• the fluoride in Anchor toothpaste gave 30% more cavity protection; and

• the triclosan contained in Anchor toothpaste was ten times more effective in reducing bacteria.

The plaintiff, Colgate, objected to these claims, stating that it was the pioneer in the field and that its own toothpaste contained the three ingredients prior to Anchor. Colgate claimed that Anchor’s statement with regard to fluoride protection, and the efficiency of tricloan, was false and misleading as the amount of fluoride in toothpaste is mandated by Rule 149-A of the Drugs and Cosmetics Rules. Colgate claimed that “a false statement which stops at being a mere puffery may be within the tolerance limits permitted by law. A claim which exceeds the said limit would amount to disparagement of the other people’s product and that, therefore, the same cannot be allowed to continue”.

In its interim order, the court restrained Anchor “from using the words ‘only’ and ‘first’ in the offending advertisement, in a manner sending a message as though the respondent’s product is either the only one containing all three ingredients, or the first to provide all-round protection”. The court asserted that consumer interest is an element which must be considered when assessing comparative advertising. This appears to be the first time a court has included discussion of consumer interest in its analysis of such advertising. At first glance, the decision appears to be inconsistent with earlier case law on this issue.[22]

However, as no other rulings have referred to the interests of consumers, the Colgate Case is not in direct contradiction to prior decisions – though the High Court of Madras failed to notice a recent order of the Delhi High Court in the case of Reckitt Benckiser v Hindustan Lever,[23] which held that mere ‘generic’ puffery is not actionable. The Madras High Court observed that: “Recognizing the right of producers to puff their own products even with untrue claims, but without denigrating or slandering each other’s products, would be to ‘de-recognize’ the rights of the consumers guaranteed under the Consumer Protection Act 1986.”  The court also held that: “To permit two rival traders to indulge in puffery, without denigrating each other’s products, would benefit both of them, but would leave the consumer helpless.

2. Bait Advertising

Bait advertising takes place when an advertisement promotes certain (usually ‘sale’ prices) on products that are not available or available only in very limited quantities. It is not misleading if the business is upfront in a highly visible, clear and specific manner about the particular product ‘on sale’ being in short supply or on sale for a limited time.

Bait advertising is an alluring but insincere offer to sell a product or service which the advertiser in truth does not intend or want to sell. Its purpose is to switch consumers from buying the advertised merchandise, in order to sell something else, usually at a higher price or on a basis more advantageous to the advertiser. The primary aim of a bait advertisement is to obtain leads as to persons interested in buying merchandise of the type so advertised.[24]

Bait advertising is so called because it offers a ‘bait’ to draw customers to the store or business and they can get caught as a result. When offering goods for sale, you are expected to provide sufficient quantities of goods to meet anticipated demands, unless you clearly state otherwise. You can specify exactly how many items are available for sale at the special price, providing you make it clear in the advertisement. If you are unable to supply goods at the advertised price, you may offer a rain-check or equivalent goods at the advertised price to maintain goodwill. You have the option of nominating the period of time for which such an offer is available. However, any restrictions must be stated clearly. For example, statements such as Today only or Weekend Special or Only until Saturday are acceptable, but must be clear to the reader.

The term special price means the price is a reduced or bargain price by comparison with on ordinary price. Once again, you must be able to substantiate that the goods were available at the ordinary price for a reasonable period.[25]

A COMPARISON WITH UNITED KINGDOM, UNITED STATES OF AMERICA ON MISLEADING ADVERTISEMENTS

This part deals with various advertising strategies in the United Kingdom and United States.  A comparison of different rules and laws applicable to the misleading advertisements are also dealt with.

  1.          United Kingdom

The Consumer Protection Act, 1987 is the British counterpart of the Indian Consumer Protection Act, 1986. Unlike in India in all the three countries United Kingdom, United States and Australia the consumers are at an advantage and enjoy more rights and the fine and the punishment imposed on the companies that mislead the public through advertisements is also much severe than the fine and punishments imposed in India.

The fact that the UK is part of European Union makes it to be bound by the European Union Directives on Consumer Protection. The Consumer Protection from Unfair Trading Regulations 2008 prohibits commercial practices which are unfair to consumers. If a trader misleads or engages a consumer in an aggressive commercial practice and the consumer purchases goods or services which otherwise he would have not purchased then the trader is said to be in breach of the regulations. In accordance with the Consumer Rights (Payment Surcharges) Regulations 2012, traders are banned from charging fees to consumers that are excessive for using payment methods such as credit and debit cards.  This regulation is applicable to sales and service contracts but does not include social and health services, certain financial services and food and drink delivered by regular people.

Part III of the Consumer Protection Act deals with misleading price indication. S. 21 of the act deals with the meaning of the term misleading. In accordance with it any indication which misleads the consumer regarding its price or any other wrong impression that it conveys to the consumers.

The Advertising Standards Authority (ASA) is a self-regulatory body which also looks into complaints regarding misleading advertisements. Unlike Advertising Standards Council of India, ASA can look into cases of misleading advertisements suo motto.

In the case of Director General of Fair Trading v. Tobyward Ltd a product called SpeedSlim was advertised which claimed that it could result in permanent weight loss, success was guaranteed, it contained an ingredient representing a medical or scientific breakthroughit prevented fats entering blood stream, the user could lose a specific amount of weight in a specified timeand it was 100% safe. The ASA received complaints and found the advertisements to be misleading. The ASA advised the company on how to comply with the code but the company advertising the product did not take notice. An interlocutory injunction was granted to restrain the publication of misleading advertisements. The ASA ruled that the advertisement breached the advertising standards code for exaggeration and being misleading and banned it from future publication.

Another important case of misleading advertisement is the L’Oreal advertisement featuring Julia Roberts promoting Teint Miracle, a foundation which was said to have emanated natural light from the skin. Another advertisement promoting foundation, the Eraser featuring Christy Turlington which was supposed an anti-ageing product, it was admitted by L’Oreal, UK that the image was digitally altered to remove the signs of ageing such as crow’s feet and the image claimed to have accurately illustrated the achievable results.

  1.          United States of America

The Federal Trade Commission (FTC) Act is the law at the central level dealing with the prohibition of false and misleading advertising and various laws exist at the state level which deals with misleading advertisements. The law in California regarding misleading advertisements is the Unfair Competition Law which draws its source from S. 5 of the Federal Trade Commission Act.

The Federal Trade Commission releases explanatory statements periodically on parts of it statutes. The FTC has clarified that ‘advertising must be truthful and non-deceptive, advertisers must have evidence to back up the claims and advertisement cannot be unfair.’ In accordance with the FTC rules the intent of the advertiser is irrelevant when the question of misleading or deceptive question arises. In addition to this Unfair Trade Practices Act is also applicable.

Better Business Bureau (BBB) and Advertising Self-Regulatory Council, earlier known as National Advertising Review Council are among the self-regulatory organizations that look into the case of misleading advertisements. BBB deals with the disputes between advertising practices and companies marketing.

The term advertising in accordance with the Californian courts means any statement made in connection with the sale of goods or services. In the case of Bank of the West v. Superior Court it was held that advertising requires ‘widespread promotional activities directed to the public at large’ and personal solicitations do not amount to advertising.  In order to determine whether the advertising is misleading or not the Californian courts analyse the format, images, word and product packaging and see whether the advertisement can result in deceiving the public.

Consumer fraud class action was filed in 2012 against Coty’s Rimmel London Lash Accelerator in the Federal Court in California. In this case known as Alagrin v. Coty Inc. it was alleged that the company Coty deceived its consumers by advertising that Rimmel London Lash Acceleratormascara with Grow-Lash Complex lengthened the eyelashes by 37% in a month and led to increase in the eyelash growth on regular usage.

In the case of Markus Wilson v. Frito-Lay North America, Inc. and PepsiCo, Inc. class action suit was filed where it was alleged that the Lay’s Potato Chips were misbranded by Frito-Lay. It was claimed that Lay’s Potato Chips were advertised to be healthy and contained 0 grams of Trans Fat. It went on to say that the snacks were good for certain group of population including the people with diabetes, children, adolescents, elders and pregnant women. The company failed to mention that every 50 chips contained more than 13 g of fat.

In the case of Lorena Trujillo v. Avon Products Inc, Avon Products Inc. was slapped with a class action over its skin care line. In the Californian Central District Court it was alleged that the Avon products such as Anew Clinical Advanced Wrinkle Corrector, Anew Reversalist Night Renewal Cream, Anew Reversalist Renewal Serum and Anew Clinical Thermafirm Face Lifting cream products were compared with the procedures found in the office of a dermatologist. It went on to say that its products repaired damaged tissue, boosted collagen and recreated fresh skin. Warning was also served to the company in the form of letter stating that the products were misrepresented to the consumers.

Maybelline was also slapped with a consumer fraud class action where it advertised its Super Stay lipstick to last for 14 hours. It also claimed that its Super Stay lip gloss lasted for 10 hours. The case is known as Carol Leebove, et al. v. Maybelline LLC, one of the plaintiffs alleged that her lipstick would wear off as soon as she had a meal or a drink. The lawsuit alleged that Maybelline had engaged in breach of warranty, unjust enrichment and violation of various consumer-protection laws.

One of the plaintiffs for the lawsuit alleged that the long-lasting lipstick would wear off as soon as she ate a meal or had a drink. The Maybelline lawsuit alleged unjust enrichment, breach of warranty and violations of various consumer-protection laws.

Role of Indian Judicial approach

Though the wrong of disparagement is age-old, the cases dealing with the same were rare to be found in the Indian Courts. The reason behind this seems to be essentially that the advertising market was not so strong until 1990 in India. It is only after the liberalization that multinational institutions have stepped in the every field of the economy and started exploring the advertising market. The present chapter with the help of the various cases shows the judicial attitude of the court in the cases of advertisement, which are essentially cases of regulating commercial speech for the greater benefit.

(1)   One of the earliest cases that came before the court on the issue of slander to goods was that of Reckitt & Colman of India Ltd. v. Kiwi T.T.K. Ltd.  before Delhi High Court in the year 1997. In this case the plaintiff company was engaged in manufacture and sale of liquid shoe polish under the name of Cherry Blossom Premium Liquid Wax Polish. Here the defendant is also engaged in the manufacture of polish and one of the brands being manufactured and marketed by the defendant was ‘KIWI’ brand of liquid polish. Now, in an advertisement programme, the defendant shows a bottle of ‘KIWI’ from which the word ‘KIWI’ is written on white surface which does not drip as against another bottle described as ‘OTHERS’ which drips. The product shown as ‘OTHERS’ which is marked as ‘Brand X’ allegedly looks like the bottle of the liquid shoe polish of the plaintiff. Also, the bottle of ‘OTHERS’ had a red blob on its surface which allegedly represents ‘CHERRY’ which appear on the bottle of the plaintiff’s product. Therefore the plaintiff had filed the suit for an injunction restraining the defendant from advertising the products in the manner they had been doing otherwise it would cause irreparable loss to its reputation, goodwill, brand, equity, etc. In response the defendant argued that there is nothing disparaging or defamatory conveyed through the said advertisements against the plaintiff, as no reference has been made to Cherry Blossom Premium Liquid Wax Polish in any of the advertisements. In the alternative, it was also argued by the defendant that even if a reference in the advertisement can be related to the plaintiff, there was nothing unlawful about the statement made by the defendant in the said advertisement as it was a true statement of fact and substance and, according to the defendant, no injunction can be granted against the said defendant. The court without deciding on the issue of whether the statements made by the defendants of its superiority were true or not disposed that the matter on the reasoning that a consumer who watches this advertisement on the electronic media only for a fleeting moment may not get the impression that the bottle is the bottle of the plaintiff. In the course of the judgment the court had reiterated the principles laid down by the Court in the case of Calcutta High Court of Reckitt & Colman v. M.S.Ramachandran: .

(2)   The next case that came before the court was of Hindustan Lever Ltd. v. Colgate Palmolive (I) Ltd.  in this case the appellant had given advertisement in the print, visual and hoarding media, through which it claimed that its toothpaste ‘New Pepsodent’ was “102% better than the leading toothpaste. The advertisement also contained a ‘schematic’ picture of samples of ‘saliva/smear’. The advertisement depicted on one side of the advertisement a pictorial representation of the germs in a sample taken from the mouth of a person hours after brushing with ‘the leading toothpaste’. And another pictorial representation was of the germs from a similar sample taken from the mouth of another person who used the ‘New Pepsodent’. The former shows large number of germs remaining in the sample of saliva where the ‘leading toothpaste’ is used and the latter shows almost negligible quantity of germs in the sample of saliva where ‘New Pepsodent’ is used.  Apart from this the advertisement also spoke oftests conducted at the Hindustan Lever Dental Research Centre and concluded that the appellant’s product was based on a germ-check formula which was twice as effective on germs as the leading toothpaste was. Also in the TV advertisement of the appellant, two boys were asked the name of the toothpaste with which they had brushed their teeth in the morning. The advertisement showed ‘New Pepsodent’ 102% superior in killing the germs, which is being used by one of the boys. So far as the other boy is concerned, who had used another toothpaste, which was shown to be inferior in killing germs, the lip movement, it was alleged, indicated that the boy was using ‘Colgate’ though the voice was muted. Additionally, when this muting was done there was a sound of the same jingle as it was in the usual Colgate advertisement. On behalf of plaintiffs by giving data to the Court it was shown that the ‘leading toothpaste’ referred to them only.  On the basis of the same it was contended that reference in the advertisement to ‘leading’ toothpaste must be taken to be a reference to ‘Colgate Dental Cream’ and this was also argued to be obvious from the use of the word ‘the’ before the word ‘leading’ in the TV and newspaper advertisements. In this case appellants argued that no action could be taken against the Hindustan Lever Ltd. because the plaintiffs had not yet discharged the burden of proving the statements made by them false. Court again in the present case without going into the merits of the case refused to interfere with the order of interim injunction awarded by Monopolies and Restrictive Trade Practices Commission on the ground that the matter was still pending before the commission and the order made was discretionary in the nature.

(3)   The next case that came before the court was the case of Pepsi Co. Inc. v. Hindustan Coca-Cola.  The plaintiffs in the present case contended that the commercials of the defendants disparaged their products, which resulted in the dilution of the goodwill and reputation enjoyed by them. The plaintiffs add that at various parts of the commercial, the drink was named as “PAPPI”, which was an obvious reference to the “Pepsi”. Thereby their product has been mocked and ridiculed by terming Pepsi as a “Bachhonwali” drink and therefore and showing the preference of kids of Pepsi over Thums Up. The plaintiffs therefore sought an injunction from the Court that would restrain the defendants from further telecasting the commercials.The arguments of the defendants on the other hand are on the lines of the fact that the trade rivalry between the two firms ought not to spill over into the court of law. They sought to justify their commercial as nothing more than mere puffing of their own products and any reference made to the plaintiff’s product was only as a joke on their advertisement.The Delhi High court in the present case, while deciding the issue went into the definition of the term disparagement as defined in authoritative sources such as the Black’s Law Dictionary and the Webster’s Dictionary. The Court further referred to the case of Reckitt & Coleman India Ltd. v. M.S. Ramchandran and Anr.,  where the court laid down 5 principles to decide whether a party was entitled to an injunction. The court further noted that in the same case, the court had come to the conclusion that comparative advertisements per se were permissible but what was impermissible was any disparagement of the goods of the competitor in the process. With this in mind, the court laid out three guidelines for the determination of whether an action for disparagement lay, they are:

            (1) A false or misleading statement of fact about a product.

            (2) That statement either deceived, or had the capacity to deceive, substantial segment      of potential consumer, and

            (3) The deception was material, in that it was likely to influence consumers’ purchasing     decisions.

            The court in the present case concluded that in the present case the comparisons drawn     in the course of the commercial were merely attempts at puffing up their own products. Further the court noted that there was no evidence presented on the part of the plaintiff as to how this particular commercial had adversely affected its business. Thus the conditions laid down above were found not to be fulfilled in the case of the defendants’ commercial. On these accounts the court dismissed the plaint.

Subsequently in 2003, the same issue came up before the same court for hearing as Pepsi Co. Inc. and Ors. v. Hindustan Coca Cola Ltd. and Anr  and substantively the same      arguments were raised on both sides. But this time Usha Mehra J., gave a totally contrary interpretation to the same facts on the ground that:

“The vast majority of the viewer of the commercial advertisement on electronic media       are influenced by the visual advertisements as these have a far reaching influence on the psyche of the people, therefore, discrediting the product of a competitor through         commercial would amount to disparagement as has been held by the High Courts and      the Supreme Court of India as well as the Law laid down by Courts in U.K. & U.S.A.”

The court in the present case laid down a different set of guidelines on which to    determine an action of disparagement, namely:

            (1) Intent of commercial.

            (2) Manner of the commercial

            (3) Story line of the commercial and the message sought to be conveyed by the      commercial.

Of these the manner of the commercial was considered most important and any commercial. In accordance with the decision of the Supreme Court in Hindustan Lever v. Colgate Palmolive (I) Ltd. , the court maintained that any ridiculing of the plaintiffs’ products would amount to disparaging whereas a mere comparison would not. In the present case, the Judge concluded that various terms such as “bachhonwali drink” and “yehhai wrong choice baby” were of ridiculing nature and hence amounted to disparagement of the appellant’s products. The court therefore accepted the appeal and passed an order of restraint in respect of the commercials.

(4)   In the same year before this case the Delhi high Court had dealt with another case of Reckit Benckiser (India) Limited v. Naga Limited and Ors.   In this case the plaintiff filed the suit for permanent and mandatory injunction, against the defendant’s television commercial. The commercial depicted a woman in an advanced stage of pregnancy needing urgent medical assistance during a train journey. Then doctor calls for hot water and is handed a cake of soap, which is rejected by the lady, stating that an antiseptic soap is needed. It is not in dispute that the soap which was handed over to the doctor is identifiable by viewers as the Plaintiff’s product, namely, Dettol Soap. The doctor further states in the commercial that “at a time like this, you do not need just antiseptic, you need a protector”. The Defendant’s Ayurvedic soap is then shown and it is concurrently stated that it is body ‘rakshak’ soap, the first Ayurvedic soap that completely removes all seven kinds of terms and protects from infection. The Plaintiff here alleged that this commercial disparages its Dettol Soap and the intention behind the commercial is malicious. In these facts, Vikramjit J., opined that the T.V. commercial has the effect of making the viewer alive to two factors–firstly, that Dettol Soap is not an antiseptic and, secondly that the Defendant’s Ayush Soap is an antiseptic soap and a protector from infection. During the course of the judgment, it was brought to the notice of the court that the Dettol soap is neither labelled nor marketed as an anti-bacterial toilet soap or “as an antiseptic soap” but is simply labelled as a soap which “helps ensure general skin cleanliness and high standard of personal hygiene”. Counsel of defendant here vehemently emphasized that in contradiction to this soap, ‘Dettol liquid’ is manufactured under a license issued under the Drugs Act and is marketed as an antiseptic germicidal. On the other hand the defendant’s soap Ayush is based upon the Ayurvedic system of medicine and is manufactured under a drug licence granted by the Director of Drugs, Tamil Nadu. He further observed that the “consumers perceive Dettol soap as strong and effective in maintaining personal hygiene and regard it as an efficient antiseptic soap that kills harmful germs and bacteria and ensures good health and hygiene…..” So if a competitor makes the consumer aware of his mistaken impression, the Plaintiff cannot be heard to complain of such action. Court further held that to hold a party liable for libel when all that has been stated by the competitor is the truth.On the grounds the court did not grant any injunctory relief.

(5)   The next case that came before the court was the case of Dabur India Ltd. v. Colgate Palmolive India Ltd.  In this case the principles that were elucidated in the case of Reckitt & Colman of India Ltd. v. Kiwi T.T.K. Ltd. were reiterated upon by the court. The court said that comparative advertisement is allowed if:

            a) The trader is entitled to declare that her goods are the best, even though the       declaration is untrue.

            b) One may also say that her goods are better than her competitors, even though such        statement is untrue.

c) For the purpose of saying that her goods are the best and that her goods are better than her competitors, she can even compare the advantages of her goods over the goods of the others.

            d) One, however, cannot while saying her goods are better than her competitors, say                      that her competitors’, goods are bad. If she says so, she really slanders the goods her          competitors. In other words she defames her competitors and their goods, which is not         permissible.

            e)If there is no defamation, to the goods or to the manufacturer of such goods no action lies, but if there is such defamation, an action lies and if an action lies for         recovery of damages for defamation, then the court is also competent to grant an order        of injunction restraining repetition of such defamation.

(5)   The next case that came before the Delhi High Court was between Marico Ltd. v. Adani Wilmar Ltd. The facts of the case are that both companies sell cooking oil under the names Saffola (Marico) and Fortune (Adani Wilmar) respectively. The plaintiff, filed two suits against the defendant restraining them from broadcasting, printing and publishing advertisements of its product alleging that it disparaged the goodwill and the reputation of the plaintiff’s product. The plaintiff’s also claimed that the statements were also misleading as they were not backed up by adequate research or scientific study. The court using the principles already discussed above decided on the question whether there was disparagement in the negative. They said that the said advertisements were not disparaging and were only comparing the advantages of the defendant’s goods over the goods of others. The court also said that the advertisements did not denigrate the plaintiff’s product. On the question of whether the claims made by the defendant were misleading or not the court relied on Dabur v. Colortek and by looking at the intent, message and the story line of the advertisement decided that the ad was not about the comparative cholesterol lowering ability of Oryzanol but was more about showing that the defendant’s product was sufficient to meet the daily requirements of the human body. The court said that it is not required of the defendant to declare each and every detail regarding the cholesterol lowering ability of Oryzanol as long as the intent, story line and message that has to be conveyed by the advertisement is not entirely untrue.

(6)   The next case that came before the Delhi High Court was between Colgate Palmolive (India) Ltd. v. Hindustan Unilever Ltd. In the present case the plaintiff brought an action against the defendant for its advertisement relating to its product ‘Pepsodent GermiCheck Superior Power’ alleging that the ads disparaged Colgate’s product – Colgate Dental Cream Strong Teeth. The plaintiffs claimed that the claim made by HUL that Pepsodent GermiCheck has ‘130% attack power’ was blatant lie. Giving out such false statements amounted to misleading the consumers and violated several provisions of the ASCI code as well as The Drug and Cosmetics Act, as it amounted to misbranding as well. The plaintiff’s also claimed that the TV commercial depicts that Colgate’s product could cause cavities and was therefore disparaging as well. The plaintiff also stated that HUL has a history of making false claims in respect of its products. The defendant relied on the Dabur Colortek case to show that courts have allowed comparative advertisement and have allowed manufacturers to claim superiority over their competitor’s products if there is no denigration of the other product. The defendants then claimed that the tests that were conducted by HUL in vivo and in vitro supported there claims that their product had 130% germ attack power and that no claim was baseless. The Court relying on cases such as the Dabur India v. Colortek Meghalaya Pvt. Ltd. and the Reckitt and Colman of India Ltd. vs. M.P. Ramchandran and Anr. which have been discussed before dismissed the case by saying that HUL was not denigrating the product of Colgate. The Court said that it is unable to identify any unfairness in this practice that may attract the clauses of ASCI code. They also said that such comparative advertising is permissible as long as the competitor’s product is not derogated and disgraced while comparing. The Court also said that, too much cannot be read into the expressions of each individual character in the advertisements. The expressions and effects used in the advertisement only showed that Pepsodent was a better product but did not disparage Colgate’s product. Also, the court said that as there is a comparison of products and an attempt to show that one is better than the other, then obviously both boys cannot have happy faces. The court also said considering HUL had conducted tests that showed that its product was 130% superior precisely then it is the duty of HUL to keep its consumers informed of the same.

Advertising Standards Council of India (ASCI)

Inception of the ASCI

The advertising industry has been growing since independence with considerable increase in number of advertisements related to different products.  Though there are various laws regulating this, few members from the advertising industry came together in 1985 to form a self regulatory body. This decision was inspired from similar self regulatory bodies working in western countries like the USA, UK, Germany etc. Main objective behind formation of the ASCI was to ensure that there is a fair competition among all the players.

The members who founded the ASCI were related to four different fields i.e. advertisers, advertising agencies, media persons and other professional service providers connected with the advertising sector. ASCI is a not for profit company and it was registered under the Section 25 of the Companies Act, 1965.

There is a membership fee which the member has to pay every year, this membership fee vary from member to member depending on the turnover of the company. Each member has a right to nominate representative to the general decision making body.  At present, majority of members of the ASCI are top advertising companies, top advertisers and media personality. The ASCI has its own rules, regulations and a self regulatory code which are binding on members. Further, the code is binding on all advertising agencies, advertisers etc. irrespective of their membership to the ASCI.

 Objects of the ASCI

Main objective of the ASCI is to protect the interest of the consumers and to ensure that there is a level playing field for all the players. It makes sure that there are no misleading advertisements in the market and that they does not violate public decency or that they does not go against the public policy.

The ASCI understands the value of advertisements in selling of products and in case the customers loses their faith in the advertisements it will ultimately affect the producers only.  The simple strategy it wants it members to follow is to be truthful and honest in their advertisements. Though sound simple, it is not an easy task since the producers are not really honest all the time.

Structure of the ASCI

The structure of the ASCI can be broadly divided into two bodies viz. the Board of Directors (BoD) and the Consumer Complaints Council (CCC). The members select the BoD from among themselves. At present there are 16 members in the BoD four from each of the core group i.e. advertisers, media personalities, advertising companies and other advertising services. Main function of the BoD is to make policies with respect to governance of the ASCI and its members.

The CCC is the grievance redressal place for the customers, the researchers have looked into its functions in next section. The CCC consists of 21 members out of which 12 members belong to the society while the remaining 9 are professionals from advertising society. Non professional members are generally experts and reputed members from medical field, NGOs, lawyers etc. They meet whenever it is required but atleast one meeting per month is mandatory.  The CCC which deals with consumer complaints received against the advertisements which are false, misleading or illegal. The CCC is an independent body from the ASCI and it lays down its own rules and regulations in order to deal with complaints.

Self Regulation and Advertising Agencies

The ASCI is a self regulatory agency in India and is inspired from its western counterparts. The issue which arises is why is regulation required in the first place? Advertisements increases competition, consumer choice and innovation in the market but if the advertisements are not truthful then the public’s faith in them will hamper and it will affect the whole industry and therefore, some kind of regulation is in the interest of the advertisement industry itself.  Regulation can be either by legislation or the industry can go for self regulation. Therefore, the next question which arises in why self regulation?

Self regulation as the phrase itself suggests is not external but it’s a kind of internal regulation whereby the industry makes policy for regulating its own players. In case there is no governance, there will lots of misleading advertisements in the market and in order to curb this, the government will have to come up with strict regulations which will hamper the interest of the honest members of the community also. In short, self regulation is based on this simple formula ‘self regulate or someone else will do that for you’.

Self Regulation Code by the ASCI

The ASCI has formed its own code for self regulation of players in the advertising industry. It not only applies to the members but it also applies to non members who are in the field of advertising. Further, it applies to each and every advertisement which is published or showed in India even if it was produced outside the country.  In that respect, it applies to players outside the country also.

With its code, the ASCI seeks to ensure that the advertisements are 1) honest and truthful; 2) they are not against public decency standards; and 3) does not promote or do anything which is harmful to the society or to children in general.  Apart from these, the code also seeks to increase customer’s respectability towards the advertisement industry as a whole.

The code has been formulated keeping in mind general business practices of the industry. ASCI code deals with various aspects under its four different chapters. The researchers in the following section listed out important provisions of the code and briefly what each chapter deals with.

The code defines advertisement very broadly . The researchers believe that the importance given to the communication recognised by the public as advertisement is commendable. It instills a faith in the consumers that the advertiser cannot escape on the technical grounds by stating that his product is a communication and not an advertisement. The definition, the researchers believe is instrumental in achieving the objects which the ASCI is trying to achieve. Similarly, consumer has been defined broadly as “someone who is likely to be reached by an advertisement whether as an ultimate consumer, in the way of trade or otherwise”.

First chapter of the code deals with the duties of the members which they should fulfill in order to make sure that the advertisements are truthful and honest. Every fact stated by the advertiser in the advertisement should be capable of substantiation.  Further, the advertiser is bound to produce that substantiation before the ASCI as and when required. Further, if there is any claim made by the advertiser based on any public survey or any other source, the advertiser is bound to indicate that particular source in the advertisement.

Similarly, the advertiser cannot use name of any expert, celebrity, institution etc. in order to induce customers to buy the product without consent of that expert, celebrity or institution. The ASCI can ask the advertiser to produce the consent form and the latter will be bound to produce the same.  Lastly, the advertisement should not contain any misleading fact or any exaggeration intended to amuse the consumer to prefer one product over the rival product.

Chapter two deals with public decency to be ensured by the advertisers in their advertisements. It says that the advertisement should not contain something which is vulgar or indecent or which depicts women as something which is not in accordance with the public decency level in the country.

Chapter three prohibits the advertisers to do anything which might be against the public policy or which might be harmful to the society. This chapter gives special importance to the minors. The code prohibits any advertisement which may incite people to commit crime or undertake violent acts. Similarly, any advertisement which discriminates between people on the basis of caste, creed, sex, gender etc. is prohibited.

As far as advertisements which are directed to minors are concerned, the advertiser has to make sure that they does not promote any kind of dangerous acts to be undertaken by the minors. Similarly, the advertisement should not contain anything which encourages children to talk to strangers in order to collect wrappers, coupons etc.  The advertisement should not consist of anything which is against the law or which involves breaking the law and it shall not propagate anything which is banned under a particular law.

The last chapter deals with provisions related to balancing fairness in the market with the healthy competition among the players. This chapter deals with those advertisements where a producer compares his product with that of another producer’s product. The code says that the two products should be compared on the same aspects.

Further, the subject matter on which the products are compared should not be such that it gives an inherent advantage to one producer over the other. The products should be compared in a competitive manner and no derogatory remark should be made in the advertisement against the competitor’s product. The advertiser should not use name of other firm, institution, company in order to gain advantage over competitor’s product. Lastly, there should be no plagiarism by one advertiser from the earlier campaign or advertisement of another producer.

Enforcement of the Self Regulation Code

As the name suggests, it is a self regulation code and therefore, the responsibility of its enforcement is on its members only. Since, it is a self regulation code, the duty is imposed on its members to not do anything that is in contravention of the code or which goes against the values and the principles of the ASCI.

The Code recognises that the rules are not intended to replace or overrule any existing law.  Further, it’s a not for profit organization registered under Section 25 of the Companies Act and therefore, any step or decision taken by the ASCI does not put a bar on the aggrieved party to seek any legal remedy available to him/her. The aim of the code is self regulation but that does not mean that no one else can regulate the conduct of the members in case they are at fault. In other words, if a person approaches the ASCI and is aggrieved by its course of action, he/she can still approach the consumer forum or may seek any other remedy. The principle of res judicata will not apply in such a case.

Complaint Procedure under ASCI

  • How to lodge a complaint

As already suggested, ASCI covers a wide gamut of complaints ranging from printing to audio visual complaints. ASCI has made sincere efforts to make the complaint procedure as amenable and accessible to each and everyone who is aggrieved of a particular advertisement displayed in any format. To protect the confidentiality of the complaint, ASCI doesn’t disclose the identity of the complainants. There are four available methods as per which a complaint can be filed by a complainant:-

  1. There is an online form available on the website of ASCI which can just be filled out instantly providing the details of the complaint and the complainant and the complaint will be lodged with the ASCI.
  2. Another method to lodge a complaint is to send out an email to the ASCI by downloading the complaint form from the ASCI website and it includes the particulars of the complainant, the details of the complaint, etc. The same can then be emailed to the ASCI at contact@ascionline.org.
  3. Also, the complainant can download the complaint form and send it via post at the ASCI address. The details of the address are given on the ASCI website. There are few details which need to filled out by the complainant such as the nature of the complaint, details of the advertiser against whom the complaint is made, etc.
  4. Lastly, the ASCI website has provided the telephone numbers on which the complainant can simply call and lodge a complaint. There are both normal and the toll free numbers available. Again, the complaint is required to provide all the necessary details.

The researchers are of the opinion that ASCI has been working towards making the complaint procedure as easily accessible as possible to everyone in order to avoid any procedural intricacies owing to which a complainant might hesitate to complain in the first place. Therefore the complaint mechanisms provided by the ASCI are simple in nature and easy to follow. But the researchers believe that such complaint forms should be available in other languages also besides English which will help removing the illiteracy impediment especially in a country like India. Hence, ASCI should provide for such forms to be available in few local languages in order to make it more accessible.

  • Processing Procedure of a complaint

The procedure is as follows :-

  1. The primary step is to intimate the advertiser against whom the complaint has been filed. Once the complaint is received, the ASCI Secretary General sends the same to the advertiser himself along with a letter for the purpose of seeking comments from them within 5 days of the receipt of the complaint. During this process, the identity of the complainant is not revealed..
  2. The allegedly offending advertiser is provided with two weeks from the date of receipt of ASCI letter to give comments on the complaint forwarded to him.
  3. Once the comments are received from the advertiser or the agency, it would be put up on agenda of the CCC meeting which happens twice a month. The purpose of seeking comments from the advertiser is to have a meaningful deliberation about all their rights and hence a decision can be made out balancing the interests of both the parties.
  4. Once the CCC makes its decisions, both the parties are informed about the same. Where the complaint is upheld by the CCC, the advertiser would be notified about the same within 5 days of the decision made. But the complainant would not be informed immediately as ASCI gives 15 days to the advertiser to seek its compliance with the decision made and once the compliance is made, the complainant is informed after that. But where the complaint is not upheld, both the complainant and the advertiser are informed simultaneously.
  5. When the complaint is upheld by the CCC but the advertiser does not compliant with the same, in such a case the ASCI Vice Chairman writes to the advertiser requesting them to comply with the decision of the CCC within two weeks. Also, the concerned media vehicle that is displaying the complained advertisement would be intimated about the ad violating the ASCI code.

The researchers are of the opinion that as ASCI has its own standing and recognition in regulating the advertisements content, any word from ASCI deciding against a particular ad or an agency carries a lot of weight and hence is capable of affecting the brand image in the market. This instills heavy fear in the advertisers as it directly affects their image in the market.

 The whole complaint processing mechanism can be depicted as follows :-

 Effectiveness of ASCI

The effectiveness of ASCI can be gauged through several means such as the success rate of ASCI in controlling the promotion of advertisements violating its code, implementation of its decisions by the offending advertisers, various mechanisms adopted by ASCI to fast track the dispute redressal, etc. The researchers in the current paper have attempted to identify the effectiveness of ASCI by looking at all such means and hence endeavored to provide for few suggestions which would help in ASCI’s better functioning.

Legal Backing for TV Advertisements

As already suggested in the paper above ASCI does not have the legal teeth or any statutory backing which can make its decisions binding. Therefore in order to make it more powerful and effective, the Ministry of Information and Broadcasting in 2006 gave ASCI the legal recognition under the Cable Television Networks (Amendment) Rules, 2006.  Therefore with the backing of a Statute, the ASCI was able to streamline all the TV advertisements to comply with its code and hence the compliance rate is perfect hundred.

The researchers have relied on a survey conducted by Federation of Indian Chambers of Commerce and Industry (FICCI) where several respondents were questioned about this particular question whether this same legal backing should be provided to other mode of advertisements also or not. Below mentioned are the results of the survey :-

The first pie chart depicts the segregation of various respondents who were being questioned few questions regarding the effectiveness of ASCI, the legal backing to other modes of advertising, etc. Some of these respondents, as depicted in the pie diagram include advertising agencies, government, market research, media agencies, etc.

And the response to the question of whether the legal backing should be extended to other modes also besides the TV advertisements is as below :-

The researcher also concur with the 81% respondents who believe that legal backing should be given to the ASCI in other modes of advertising also besides the TV advertisements in order to increase its effectiveness. The legal backing gives it a statutory recognition and hence more stringent action can be initiated against the offending advertisers.

  • Initiation of National Advertisement Monitoring Service

One of the most effective measures taken is the setting up of the National Advertisement Monitoring Service (NAMS) in 2012. As compared to other developed nations such as UK and the US, India receives very less number of complaints and a lot of misleading advertisements escape the scrutiny of ASCI.  The primary reason for the same is the low level of awareness among the population in India.

In order to address this issue, ASCI initiated NAMS whose objective is to monitor almost all the TV channels and leading newspapers for such misleading advertisements and report all such false advertisements to the CCC of the ASCI.  The researchers are of the opinion that such an initiative by ASCI has given suo motu powers to the ASCI to lodge a complaint itself against the offending advertisers. With such an initiative, the number of complaints has increased almost four times the number before NAMS. The number of complaints from various sectors has increased from 177 in 2011-2012 to 788 in 2012-2013.

Therefore, the need of the hour was felt by the government on 9th March, 2012 the government decided to set up a National Consumer Protection Agency (NCPA) with executive as well as suo-motu powers under the Ministry of Consumer Affairs, Government of India. NCPA to monitor and penalize companies that make misleading claims in their advertisements.It would be empowered to take severe action, including recall of the product and slapping cases against the firms. The NCPA will also have an executive as well as suo-motu powers to take action against the erring companies.[26] It is expected that the NCPA functions in an efficient way to curb the misleading advertisements from affecting the consumers.In addition to these powers it is submitted that the Agency should also have powers to grant interim injunctions so that the impact of misleading advertisements on people is reduced. It is a receptive initiative step taken by government.

Conclusion

The analysis made in this article has brought to light the brooding presence of misleading advertisements in India. This brings out the necessity for regulating the advertisements. Apart from that, the advertising agencies should also have a sense of social responsibility not to deceive and cheat the public. Before the advertisement is made public, it should be thoroughly examined in order to avoid misleading contents in it. Unlike in India, in United States mens rea is not a criteria to determine the misleading nature of advertisements. Similarly, India should also eliminate mens rea as a criteria for determining misleading advertisement in order to have an effective mechanism in place. The consumer forum should not hesitate to award exemplary compensation on proof of misleading advertisement in order to have strong deterrent effect on the advertisers.

This highlights the fact that people do not find consumer forums to be accessible due to the tedious and cumbersome procedure involved. Therefore an easy way to initiate a consumer complaint through toll free number is proposed. Immediate action should be taken by the agency for complaints received. Nevertheless the importance of improving awareness among the consumers cannot be undermined. Law students can play an important role in spreading the awareness through propaganda, workshops, legal literacy programs, conducting seminars and putting posters. Consumer Awareness advertisements on television and print media will go a long way in curbing the impact of misleading advertisement on the consumers.

In India, Consumers Protection Act, 1986, provides protection against misleading advertisements under section 2(1)(r)vi. Consumer should always be alert about the advertisements while going for purchase of goods afresh or in exchange of old product, not be carried away by statements  like free offers / discounts etc. since  they  are  not  the  deciding  factors  for  the  requirement  of consumers, not to be misled through colourful glamorous advertisements. In case of grievances, a notice is to be issued to the newspaper or complain online to Advertisement Standards Council of India at www.ascionline.org or email: ascia@vsnl.comso that the necessary action can be taken.

Author Details:

Ms Anita A. Patil
Research Scholar
B.A.LL.B, LL.M, PhD (pursuing)
National Law School of India University

[1] Mary Gardiner Jones, The Cultural and social impact of advertising on American Society, Osgoode Hall Law Journal, Vol. 8, No.1, p.68, available at

http://heinonline.org/HOL/Page?handle=hein.journals/ohlj8&div=9&g_sent=1&collection=journals, visited on 20.1.2013.

[2] P. Ramanatha Aiyer, The Major Law Lexicon, 4th edn., 2010, Vol.4 [J-O], Lexis Nexis, Butterworths

Wadhwa, Nagpur, p.4353.

[3] Identifying Misleading Advertising. http://forum.johnson.cornell.edu/faculty/russo/Identifying%20Misleading%20Advertising.pdf  . visited on 20.1.2013

[4]www.ftc.gov/bcp/policystmt/ad-decept.htm  visited on 20.1.2013

[5] “Online Advertising in India” available at  http://apps.americanbar.org/buslaw/committees/CL983500pub/newsletter/200801/singh.pdfvisited on 20.1.2013

[6]www.fssai.gov.in visited on 18th Feb 2013

[7]Ibid

[8]www.fssai.gov.in visited on 18th Feb 2013

[9]http://www.complaintboard.in/complaints-reviews/horlicks-britannia-bournvita-pediasure-kellogs-special-k-rajdhani-besan-kissan-and-many-more-l253219.html visited 12-1-13

[10]On  16 Mar 2012, Times of India

[11]http://www.complaintboard.in/complaints-reviews/horlicks-britannia-bournvita-pediasure-kellogs-special-k-rajdhani-besan-kissan-and-many-more-l253219.html visited 12-1-13

[12] On Tue 26 Nov, 2012 Times of India

[13]http://www.ndtv.com/article/india/complan-kellogg-s-in-trouble-over-their-ads-299192 visited on 1-2-13

[14]http://www.telegraphindia.com/ visited on 2-2-2013

[15]http://www.telegraphindia.com/ visited on 2-2-2013

[16]http://www.mondaq.com/india/x/209190/food+drugs+law/Magic+Drugs+And+Misleading+Advertisements Visited on 1-1-13

[17]http://www.mondaq.com/india/x/209190/food+drugs+law/Magic+Drugs+And+Misleading+Advertisements

[18]http://news.indiamart.com/story/630-cases-registered-misleading-drugs-ads-175713.html

[19]AmitDatta, Comparative Advertising in India, Puff Under Scrutiny, World Trademark Review, 60 (2010).

[20]Supra note 5.

[21] (Case (2008) 7 MLJ 1119).

[22]J Sai Deepak, available at <http://thedemandingmistress.blogspot.in/2013/08/pepsodent-v-colgate-comparative.html&gt; last visited on 30.09.2013.

[23](Case 2008 (38) PTC 139(Del)).

[24]As per the definition under the FTC.

[25]Anonymous, available at <http://www.consumer.vic.gov.au/shopping/advertising-and-promotions/bait-advertising&gt; last visited on 30.09.2013.

[26] Ritu Kant Ohja, Government plans watchdog to check misleading advertising advertisements, 09.02.2014

available at http://www.indianexpress.com/news/govt-plans-watchdog-to-check-misleading-ads/921694/

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