Author: Aarushi Chawla
Vivekananda Institute of Professional Studies, Delhi
The 27-crore market called ‘Advertising’ is a prism through which the changing preferences of people are visible. With the growing needs and population explosion, new products and services are being launched by the companies. This created a tussle between the already existing companies and the new ones, and the profit got divided among various companies rather being concentrated in one. With globalization, international competition shook the roots of the domestic market and due to the need to strive towards excellence; companies started indulging in unfair advertising ways to convince the consumers to buy their product or service. These ‘unfair methods’ affected the rights of consumers and to impose restrictions on the same was needed. Thus, consumers became vulnerable to the dangers of predatory. As said by HG Wells, advertisements are indeed ‘legal lying.’
Thereby, the essay aims to focus on the issue as to how the advertising industry is important for the country and the need for laws to regulate them. It carefully analyses the already existing laws in India which aim at regulating the industry and it tries to answer the question as to are ‘these laws’ enough in the absence of uniform legislation.
Advertising is simply a means of communication with the users of a product or service. It provides a brief description into a product or service, intending to persuade the consumer to buy it or it can also be construed as a medium to disseminate information. The advertising industry is not just one company or an organization but a whole bunch of agencies that are engaged in the work of creating advertisements, the media that carry such ads and also a host of people such as editors, and researchers which serve as the backbone of the industry.
The industry found its inception after the setup of The East India Company and shipping became a regular activity. All the goods imported to India needed a platform for publication so; the Bengal Gazette came up in the 1780s. As there were few products and low purchasing power, advertising needed a kick start. In 1905, P. Dattaram Company followed by Calcutta Advertising Agency and the Modern Publicity Company came up. By the 1980s, alliances with multinational companies started expanding the advertising industry. Professionalism in advertising started with The Hindustan Thompson in 1987. Gradually advertising became an important industry and a need to impose restrictions on it was considered as the need of the hour.
WHY WAS THERE A NEED FOR IMPOSING REGULATIONS ON THE ADVERTISING INDUSTRY?
The current scenario with a huge range of products and companies both from the domestic and international market tends to increase competition. This ultimately led to an increase in advertisements. In turn, advertisements tend to exaggerate the facts and create a false impression in the minds of the consumers.
● Advertisements tend to deceive the customers by presenting them with false and attractive statements about their product or service which directly infringes the right to information of such customers (Re: Reliance Petrochemicals Lid. Vs. Proprietors of Indian Express).
● Companies also try to hide the actual prices of their product or service to create a huge customer base. Such non-disclosure of prices which is mainly done during the sale period, where the discounted items are already placed at a higher price and discounts indicate a false representation to the customer and thus, manipulate one in purchasing their product or service.
● At times, the labelling on the products indicate misleading weight and quantities and also contain words like eco-friendly, fat-free etc. which at times has no relation to the product and are just a way to sell the product.
● A major issue also arises with the banned products such as tobacco, which the companies bring now and then in the market with varied brand names intending to increase sales and profit on a huge compromise on people’s health.
All these unfair methods of advertising are not just against the interests of consumers but also cause a deep hole in the name of humanity. To bind all these in stringent rules and procedures, we have various laws and regulatory authorities that regulate the functioning of the advertising industry.
At present, we do not have a uniform advertising law or any statutory body to regulate the same. But the Advertising Standards Council of India (ASCI) is a voluntary, non-statutory and self-regulatory body which aims to promote a responsible industry and inculcate people’s confidence in advertisements. The ASCI has a Board of Governors and Consumer Complaints Council. The Board of Governors has advertisers, advertising agencies, media and researchers as its members.
The objectives of the ASCI are:
● Honest representations must be made to avoid misleading advertisements
● No offence must be there on public decency or morality
● Promotion of products which are harmful to society mainly minors are not permissible
● Fairness in competition keep in mind consumers’ interest
The ASCI provides a ‘code’ for regulating the industry, but the code is not per se mandatory but is merely self-discipline to be followed. The code applies to everyone who is connected directly or indirectly to the advertising industry for the protection of consumers. The Consumer Complaints Council (CCC) decides on complaints from the public or the government officials, moreover, suo moto complaints from the ASCI or CCC members are permissible as well. The TRAI, RBI and SEBI regulate the industry and entertain complaints under their respective fields.
LAWS IN INDIA
There is no uniform legislation for the advertising industry, but many varied law provisions put restrictions on the same. Some of the provisions are discussed below:
● Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003: The CTP Act, under Section 5 prohibits any direct or indirect advertisement in any form of tobacco products and also makes it a punishable offence as mentioned in Section 22 of the Act.
● Consumer Protection Act, 2019: This new act has replaced the Consumer Protection Act, 1986 and is indeed more careful towards consumers. Section 2(28) of the said Act defines the term ‘misleading advertisement’ and gives a wider ambit to it. Also, in Section 15(1) the central authority has been given wide powers to investigate the false description of any product or service.
● Drugs and Cosmetics Act, 1940: It precludes the advertisement for any drug by using any report of a test or analyses by central drugs laboratory or a government analyst. Section 29 of the said Act imposes a penalty for the same.
● The Pre-conception and Pre-natal Diagnostic Techniques (Prohibition of Sex Selection) Act, 1994: The Act by section 22 makes it a punishable offence for the advertisement of any sort for pre-natal determination of sex at any laboratory or any other place.
● Cable Television Networks (Regulation) Act, 1995: It prohibits advertisements which are in nature as mentioned in Section 2(g) of the act. It also restricts advertisements that incite hatred, disharmony or discomfort in different religions and groups.
● The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1995: It prohibits the advertisements concerning the enchanted cures of infections and disarrangements.
● The Young Persons (Harmful Publication) Act, 1956: It explicitly prohibits any advertisement that purports to incite a young person (under the age of 20 years) to commit offences, cruelty or any act of violence.
● Transplantation of Human Organs and Tissues Act, 1994: It restricts any advertisement for transplantation of human organs.
Besides all these laws, many other provisions exist in various statutes to regulate the industry. For the very first time, in Tata Press Ltd v. Mahanagar Telephone Nigam Ltd, the Apex Court held ‘commercial speech’ as a part of freedom of speech and expression under Article 19(1) (a) of the Constitution Of India. Thereby, all the reasonable restrictions as mentioned under Section19 (2) apply to advertisements.
It is a method of advertising where the product or services are advertised by comparing it with the products of other companies. It compares the product or service based on quality, price, performance but such practices have been called unfair. This form of unfair trade practice had provisions under the Monopolies and Restrictive Trade Practices Act, 1969. But after its repeal, these sorts of practices got an ambit under The Consumer Protection Act. Interestingly, a business enterprise cannot claim relief under the said act as it is not a consumer. Such advertisements also constitute an infringement under The Trademarks Act, 1999.
The Delhi High Court in the case of Reckitt & Colman V. Kiwi TTK, said that a manufacturer can say his goods as best and even give them some puffing, this will not amount to disparagement or defamation. But he is not entitled to categorize his competitors’ products as bad if so, that would amount to an injunction. In another case, Havells India v. Amritanshu Khaitan considered that if some advertisement tries to compare its rival’s similar product, then such comparison must be ‘honest’ by comparing all of their features.
Due to lack of uniform legislation, consumers have to resort to specific areas or provisions, and this is not possible for a layman to know about all his rights that exist in various statutes and as a result, leaves them unaware about the same. Moreover, the ASCI code is merely a support to the current system and does not consolidate the wide arena of legal provisions. It is important to note that since ASCI does not have any statutory might; the needs of the consumers go unheard.
Due diligence must be paid to imposing liability on the endorsers of advertisements. These endorsers receive a huge amount of money for their work and if some popular figures are taken up for these tasks, people tend to trust them blindly without looking into the intricacies of the product or service being sold. With digitization, social media posts and sponsorship tend to create a false image in the minds of consumers and thus the traditional methods of advertising have joined hands with the new age of cyberspace.
Keeping up the needs of consumers in mind, the business enterprises as in the case of comparative advertising also need protection but this issue has always been ignored. No doubt that these enterprises play with the minds of consumers with their deceptive practices but, as said under the Constitution as well in Article 14 that everyone is equal before the law and bound to get equal protection under the law.
To sum up, the multiple provisions create a lot of confusion and also, in this era of digitization it is important to have laws that govern advertisements in the cyberspace as well. With the multiplicity of regulatory bodies, lack of implementation is also an issue. The need of the hour pertains to a one-stop window for all issues related to advertising along with making the ASCI code as mandatory for all people connected with the advertising industry.
● India: Advertising Law In India - Part 1, https://www.mondaq.com/india/advertising-marketing-branding/192384/advertising-law-in-india--part-1#:~:text=At%20present%20in%20India%2C%20there,Council%20of%20India%20(ASCI).
● Regulating Advertisements in India, http://psalegal.com/wp-content/uploads/2017/01/TMT-Bulletin-Issue-III11062009042225PM.pdf
● Know About 9 advertising laws in India, https://legodesk.com/legopedia/advertising-laws-india/
● Laws governing advertisements in India, https://blog.ipleaders.in/laws-governing-advertisement-india/
● Prohibited and controlled advertising in India, https://www.lexology.com/library/detail.aspx?g=13499538-2b53-4377-aafa-1f935f7d40b3