A clearer picture: While the CPA has already defined ‘misleading advertisements’, latest guidelines clarify what constitutes a valid advertisement  | Photo Credit: istock.com

To woo the average Indian consumer, who is aspirational and highly cost-conscious, enterprises often adopt questionable advertising practices that can mislead consumers.

Multinational brands, in particular, are notorious for mislabelling and dressing up products in ways that imply certain qualities that may not otherwise be present. Terms like ‘organic’, ‘natural’ and ‘fresh’ are liberally applied to food labels, and many consumers take these descriptions at face value. However, without proper regulatory oversight, these claims often turn out to be far from reality.

The regulation of misleading advertising in India is complicated as no single law governs all aspects of product promotion, labelling and advertising. Over the years, multiple laws have been enacted in response to the evolving nature of these practices, each with its own focus and limitations.

Laws governing ads in India

The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954, specifically targets advertisements that make false claims about drugs or deceive consumers regarding their nature. In contrast, the Consumer Protection Act, 2019 (CPA) addresses misleading advertisements more broadly. According to the CPA, advertisements are considered misleading if they inaccurately describe a product or service, make false promises or hide important details. To enforce these regulations, the Central Consumer Protection Authority (CCPA) was created under the CPA. The CCPA monitors deceptive advertising practices, while District Collectors are responsible for investigating complaints. Additionally, the CPA grants authorities the power to impose fines and require changes to advertisements that mislead consumers.

In addition, the Advertising Standards Council of India (ASCI), a self-regulatory body, plays a crucial role in upholding ethical standards in advertising. While ASCI lacks the legal muscle to enforce its guidelines, it works to ensure that ads in India are fair and honest.

The Food Safety and Standards Act, 2006, and its accompanying regulations aim to maintain the quality and safety of food products sold in India. The Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011, provide guidelines on the composition, hygiene, and labelling of food products. A significant loophole exists here in the form of minimum thresholds for product compositions. This allows companies to adjust ingredient proportions in ways that mislead consumers about the quality of the product.

Similarly, the Food Safety and Standards (Advertising and Claims) Regulations, 2018, aim to regulate usage of terms such as ‘natural’, ‘fresh’, and ‘pure’ on food labels. These regulations state that such claims should not mislead consumers, and if they may, a disclaimer is required. However, this provision is often not implemented effectively, as companies resort to using small, hard-to-read disclaimers or obscure symbols that the average consumer may not comprehend.

CCPA’s Latest guidelines

In a significant move to combat deceptive practices, the CCPA introduced the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022. While the CPA has already defined “misleading advertisements”, these guidelines bring much-needed clarity on what constitutes a valid advertisement. The guidelines emphasise on truthful representation, prohibit exaggerated claims and ensure that disclaimers are clear and do not contradict the main message. The guidelines apply to manufacturers, advertising agencies and endorsers, creating a robust framework for accountability across the advertising ecosystem. The guidelines also address critical issues like bait ads, surrogate ads and ads targeting children. For instance, any advertisement that targets children must not exploit their vulnerability or make unsubstantiated health claims. Similarly, the guidelines stipulate that surrogate advertisements — those indirectly promoting prohibited products — must now meet stricter scrutiny.

Self-declaration norms

Adding to the existing legal framework, the Supreme Court, on May 7, 2024, in IMA vs Union of India, introduced a new requirement for advertisers to submit a Self-Declaration Certificate before any advertisement is published or broadcast. This certificate ensures that the advertisement does not contain misleading claims and complies with relevant regulatory guidelines. The Ministry of Information and Broadcasting has launched a feature on the Broadcast Seva Portal for submitting these certificates for TV and radio ads, while the Press Council of India’s portal will handle print and digital ads.

This Self-Declaration Certificate is mandatory for all new advertisements aired or published after June 18, 2024. This directive is another step toward ensuring transparency and accountability in advertising.

The introduction of new regulatory guidelines and mandatory certifications are steps in the right direction, but real change will require consistent enforcement and a collaborative effort between regulators, industry bodies and consumers. Businesses must recognise that transparency, ethical practices and consumer trust are not just legal obligations but critical ingredients for long-term success. For India’s consumer market to thrive sustainably, protecting the interests of its consumers must be prioritised ensuring that the country’s dynamic marketplace remains vibrant, fair and accountable.

(The writers are advocates at Trinity Chambers, Delhi)

Published on September 15, 2024