Effectively tackling misleading ads violations – weighing in all the options

The Patanjali case has turned the spotlight on misleading ads and the deep concerns that they raise. In an important order on May 7, 2024, the Supreme Court passed several measures to protect consumers against misleading ads. The Supreme Court gave a strong warning to social media influencers, celebrities, and public figures, criticising them for promoting products without understanding the consequences.

The Supreme Court also issued directive that all advertisers/ advertising agencies must submit a ‘Self-Declaration Certificate’ before publishing or broadcasting any advertisement. The Supreme Court directive is a step towards ensuring transparency, consumer protection, and responsible advertising practices.

Replying to a question raised on the Lok Sabha in December 2023 on whether the Government has any plans to formulate a comprehensive policy to prevent companies/ entities engaging in inappropriate/ false/ misleading advertisements of AYUSH medicines, Minister of AYUSH, Sarbananda Sonowal, replied in the affirmative and informed that the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 and Rules thereunder encompass the provisions for prohibition of misleading advertisements and exaggerated claims of drugs and medicinal substances including Ayush medicines, which appear in the print and electronic media and Government has taken note thereof. State/UT Governments are empowered to enforce the provisions of Drugs & Magic

Remedies (Objectionable Advertisements) Act, 1954 & Rules thereunder.

He also shared data on misleading advertisements reported to National Pharmacovigilance Co-ordination Centre (NPvCC) in the last three years, which has seen progressive increase:

• March, 2019-February, 2020 – 4,885 cases
• March, 2020-February, 2021 – 6,804 cases
• March, 2021-February, 2022 – 10,035 cases

Given the seriousness of the issue, in March 2024, the Advertising Standards Council of India (ASCI) announced a tie-up with the Central Consumer Protection Authority (CCPA) to strengthen regulation around misleading ads.

Speaking to Adgully, Manisha Kapoor, CEO and Secretary-General, Advertising Standards Council of India (ASCI), highlighted the importance of honest representation in advertising, as per ASCI’s code, “Chapter I of the ASCI Code states the importance of honest representation. It clearly states that all advertisements “must be truthful” and “shall not distort facts nor mislead the consumer by means of implications or omissions”. The Code identifies several forms of misleading advertisements, such as advertisements making unsubstantiated claims, exaggerated benefits portrayed through visuals or language, omitting important product related information, and exploiting consumer vulnerabilities, especially regarding health or insecurities.”

The ASCI code aligns seamlessly with CCPA regulations against misleading advertisements, violation of the ASCI code Chapter 1 are most likely violation of the Central Consumer Protection Authority (CCPA) Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022,” Kapoor added.

Even though ASCI has the power to take steps against these ads, they don’t have the authority to remove them completely.
“In the labyrinth of India’s consumer protection landscape, combating misleading advertisements is akin to unraveling a multifaceted tapestry woven with legal intricacies and strategic maneuvers,” noted advocate Ravi Goenka, Founder, Goenka Law Associates. He added, “The essence of self-regulation in advertising is that it is the responsibility of the advertiser to ensure that all advertising is honest and truthful.”

Meanwhile, the Ministry of Consumer Affairs, fortified by the Consumer Protection Act, 2019, empowers consumers to challenge deceptive advertising practices through its administrative redressal forums and commissions. It stands as a beacon of hope for consumers navigating the misleading marketing terrain, with the words of the Act emphasizing consumer rights: “The Act aims to promote and protect the rights of consumers.”

Additionally, civil litigation serves as a battleground where aggrieved parties seek justice based on legal principles such as false advertising and breach of consumer rights. It's a clash of titans where accountability meets justice, echoing the importance of fair play in the legal system: “In cases of deceptive advertising, consumers have the right to seek injunctive relief and restitution,” he added.

Steps taken to initiate legal action against invalid claims

Addressing invalid claims in brand advertisements Goenka shared the following steps:

1. Identify Violations: Identify the specific claims in the advertisement that potentially violate Indian advertising laws and regulations. These may include false, misleading, or exaggerated claims about a product or service.
2. Refer to advertising in India, such as the Consumer Laws and Regulations: Review relevant laws and regulations governing Protection Act, 2019, the Advertising Standards Council of India (ASCI) Code, and guidelines issued by regulatory bodies like the Food Safety and Standards Authority of India (FSSAI).
3. Send a Complaint to ASCI: Consider lodging a complaint with the Advertising Standards Council of India (ASCI), which is a self-regulatory body for the advertising industry in India. ASCI accepts complaints from consumers, competitors, and industry stakeholders regarding misleading advertisements.
4. File Complaints with Regulatory Authorities: In cases of serious violations or if ASCI’s intervention is deemed inadequate, consider filing complaints with relevant regulatory authorities. For example, complaints related to food products may be filed with the Food Safety and Standards Authority of India (FSSAI), while complaints related to healthcare products may be filed with the Central Drugs Standard Control Organization (CDSCO) or the Ministry of AYUSH.
5. Legal Action: If informal resolution through ASCI or regulatory intervention is not effective, legal action may be pursued through civil litigation. This involves filing a lawsuit in the appropriate civil court alleging violations of Indian advertising laws and seeking remedies such as injunctions, damages, and corrective advertising orders.

Crucial Legal Battles Against Misleading Advertisements

In the Indian market, several landmark cases have highlighted the significance of combating invalid claims in advertisements:

HUL vs. GCMMF: This dispute arose when HUL claimed its "Kwality Wall's" frozen desserts contained only milk, implying superiority over competitors like Amul. GCMMF contested this assertion, leading ASCI to uphold the complaint and instruct HUL to modify or withdraw the advertisement.

PepsiCo vs. Coca-Cola: PepsiCo challenged Coca-Cola's advertisement for Maaza, alleging misleading claims about real mango pulp. ASCI ruled in favor of PepsiCo, directing Coca-Cola to amend or withdraw the advertisement.

Strategies for Combating Misleading Ads: A Comprehensive Approach

Advocate Ravi Goenka presented a compact blueprint for action, which included:

1. Compliance with Standards: Adherence to industry standards and regulatory guidelines, such as those set by the Advertising Standards Council of India (ASCI), is non-negotiable. These benchmarks serve as beacons for ethical advertising practices.
2. Robust Compliance Protocols: Brands must establish rigorous compliance protocols, ensuring that all claims are thoroughly vetted for accuracy and substantiation. This involves meticulous research, evidence documentation, and legal review to uphold truthfulness and compliance with laws.
3. Transparency: Clear and unambiguous communication is key. Brands should provide consumers with comprehensive information, including benefits, limitations, and risks, fostering trust and minimizing deceptive practices.
4. Consumer Education: Empowering consumers to discern misleading advertisements is paramount. Public awareness campaigns, led by legal professionals, can equip individuals to make informed purchasing decisions.
5. Regulatory Oversight: Regulatory bodies play a crucial role in monitoring advertising content and enforcing legal standards. Proactive monitoring and swift enforcement actions serve as deterrents against deceptive practices.
6. Collaboration: Collaboration among brands, regulatory bodies, legal experts, and industry stakeholders strengthens the regulatory framework. Sharing best practices and insights enhances consumer protection.

Closing the Loopholes: A Call for Evolution

In the ever-evolving landscape of consumer protection, laws must adapt to address emerging challenges. Particularly in the digital realm, where online platforms and social media amplify the reach of misleading advertisements, stricter regulations are warranted. 

Amendments focusing on online platforms can serve as bulwarks against deception. Reinforced regulatory bodies, like ASCI, can swiftly penalize violators. Transparency should be woven into the fabric of advertising, demanding evidence to substantiate claims. 

Education remains paramount. Robust initiatives can empower individuals to navigate the digital landscape confidently, safeguarding their rights.

Meanwhile, Naresh Gupta, Co-Founder, Bang in the Middle, believes that, “Misleading ads are a small part of the overall marketing strategy for a brand. Some brands may intentionally promote benefits that don't exist or make blatantly false claims. However, most of these originate from the brand itself, with advertisements being just a small part of their outreach. Fortunately, India has laws and regulatory mechanisms in place to prevent brands from getting away with overclaims or false promises. When caught, brands often have to modify their ads and ultimately adhere to the law of the land. The long-term damage to a brand's reputation can be enormous, affecting sales, brand equity, and sometimes even leading to business closure. It's a risky path for brands to take.”