Abstract
The rapid expansion of consumer markets in India, driven by globalization, has resulted in an increase in the variety of goods and services available. Major corporations are employing innovative advertising techniques to capture the attention of a diverse and growing audience. However, this surge in advertising has also led to a rise in false, misleading, and deceptive advertisements, undermining consumer confidence and raising significant ethical and legal issues. This paper examines the judiciary’s enforcement of laws against unfair trade practices, focusing on the Consumer Protection Act of 2019 and landmark case laws, with a particular emphasis on the recent Patanjali Misleading Advertisements scandal. Despite existing regulations, enforcement remains inadequate. The paper discusses the roles of various regulatory bodies, including the Central Consumer Protection Authority (CCPA) and self-regulatory organizations like the Advertising Standards Council of India (ASCI). Through case studies such as Vinod Singhal v. Secretary of Medical and Health Department and Horlicks Limited v. Zydus Wellness Products Limited, the paper explores the ongoing struggle to hold companies accountable. Recommendations for strengthening enforcement mechanisms, enhancing consumer education, and ensuring responsible advertising practices are provided to protect consumer rights and promote fair competition.
Keywords: Consumer Protection Act, misleading advertisements, false advertising, Indian consumer market, regulatory framework, Central Consumer Protection Authority , Advertising Standards Council of India .
Introduction
The burgeoning consumer market in India, fuelled by globalization and increasing purchasing power, has created a vibrant environment for goods and services. This growth has attracted major corporations eager to capitalize on the opportunities, leading to a surge in innovative advertising campaigns aimed at capturing the attention of a diverse and expanding audience. However, this rapid expansion has also given rise to significant challenges, particularly in the form of false, misleading, and deceptive advertisements. These unethical practices not only undermine consumer confidence but also pose serious ethical and legal dilemmas. When referring to any good or service, Section 2[28] of the Consumer Protection Act, 2019 states that a “misleading advertisement” is defined as one that:
· provides a false description of the good or service;
· makes a false guarantee to consumers, or is likely to do so;
· conveys an express or implied representation that, if made by the good or service’s manufacturer, seller, or provider, would constitute an unfair trade practice; or purposefully withholds material information.
This paper seeks to analyze the judiciary’s role in enforcing laws against unfair trade practices, with a particular focus on the Consumer Protection Act of 2019 and key case laws. The discussion will delve into the effectiveness of regulatory bodies such as the Central Consumer Protection Authority (CCPA) and self-regulatory organizations like the Advertising Standards Council of India (ASCI). In addition, this paper will offer recommendations for strengthening enforcement mechanisms, enhancing consumer education, and promoting responsible advertising practices. By addressing these issues, the aim is to ensure that consumer rights are protected and that fair competition prevails in the marketplace. The goal is not only to highlight the shortcomings of the current system but also to propose practical solutions that can help build a more transparent and trustworthy advertising environment in India.
RESEARCH METHODOLOGY
This paper is of descriptive nature and the research is based on secondary sources for the deep analysis of the nature of and remedies to prevent misleading advertisements as such. Secondary sources of information like newspapers, journals, and websites have been used for the purpose of research.
Literature Review
In the publication titled “Misleading and Unfair Advertising” authored by James P Nehf, the primordial issue of misleading advertising in relation to consumer – targeted media has been highlighted in light of an expanding trend of globalization has been and as will be demonstrated, continues to influence the legal discourse on creating a platform not only a strict enforcement norms, but also to lay down guidelines on part of regulatory agencies such as the Government so as to promote a fair and equitable market.
The Regulatory Standards and Enforcement Mechanism ‘s Role in Curbing Misleading Advertisements
The Central Government is empowered by the New Act to create the Central Consumer Protection Authority (or “CCPA”) in order to promote, protect, and preserve the rights of consumers. It will be within the jurisdiction of the Central Consumer Protection Authority (the “CCPA”) to investigate, recall, compensate, and impose penalties. It will regulate matters such as false advertising.
Consumer rights violations, unfair business practices, and deceptive advertising will all be under its jurisdiction. In order to ensure that customer rights are upheld, a class action lawsuit option is also provided. Government authorities can punish a producer or endorser up to Rs 10 lakh for a false or deceptive advertisement. With the intention of advancing, defending, and preserving consumer rights, the Central Consumer Protection Authority (or “CCPA”) will be founded under a special chapter of the New Act, Chapter III [Sections 10 to 27.” Through notification, the Central Government will create a Central Consumer Protection Authority, also referred to as the Central Authority, to oversee concerns concerning infractions, effective on the date specified in the notification.
Indian consumers these days have increased purchasing power as a result of consumer markets that are expanding swiftly, providing a greater variety of goods, and undergoing intense competition. Advertisements serve a useful purpose in informing consumers about new products on the market, but when dishonest tactics are used, there is a problem. However, in addition to all the advantages this growth brings for Indian consumers, there are a number of drawbacks. One of the primary shortcomings of the current system is seen to be the insufficient enforcement of laws protecting the interests of all consumers. There aren’t many regulations that expressly deal with deceptive advertising, and neither a robust regulatory organization nor a single comprehensive piece of legislation exist. False advertising create serious ethical and legal issues in addition to undermining customer confidence with their inflated promises, withheld information, and fake endorsements.
False and misleading advertisements aim to influence consumers’ “right to be informed” about the nature, quantity, purity, and safety of the good or service they are purchasing, as well as to persuade them into business transactions that they may otherwise choose not to. “Right to be informed” refers to the fundamental right of every consumer to have access to true, trustworthy information on goods, services, legislation, and anything else related to the goods and services they purchase and use on a daily basis. In order to enable the customer to make an educated and autonomous decision, this right encompasses the provision of accurate, unbiased, and dependable information on every facet of a good or service.
Commercials that make false, misleading, or deceptive statements, or attempt to persuade consumers through misleading claims, have raised concerns because they significantly contribute to the sale of goods and services to people of all ages and backgrounds. Although the Consumer Protection Act, 2019 (Act) already contains general provisions to prevent deceptive advertisements, the CCPA has now used the authority granted to it by section 18 of the Act to issue these Guidelines, which include a number of guidelines and parameters outlining what is and is not permitted. Additionally, the Guidelines provide teeth to the execution of many guidelines found in the “Code for Self-Regulation in Advertising” (ASCI Code), which was released by the self-regulatory Advertising Standards Council of India.
This non-governmental, self-regulatory organization was founded in 1985 as the Advertising Standards Council of India (ASCI). Ad agencies, media outlets, PR firms, advertisers, and other advertising-related professionals make up the council’s membership of well-known Indian companies. In addition to a sense of social duty toward the consumers and to the laws of fair competition, it was created to guarantee that all advertisements would be lawful, decent, honest, and true. A notification requiring all TV advertising in India to use ASCI codes was released by the Ministry of Information and Broadcasting in August 2006. The Advertising Council has increased in effectiveness and significance as a result of this action. ASCI is an autonomous body that oversees advertising standards in India.
In addition to a sense of social duty toward the consumers and to the laws of fair competition, it was created to guarantee that all advertisements would be lawful, decent, honest, and true. A notification requiring all TV advertising in India to use ASCI codes was released by the Ministry of Information and Broadcasting in August 2006. The Advertising Council is now more productive as a result of this change.
Few people are as well-known in the alternative medicine and health fields as Mr. Ramdev, the yoga master and co-founder of Patanjali Ayurved. Even though he is known for encouraging natural wellness, his company has serious legal problems that go beyond yoga. The Supreme Court directed Ramdev and his accomplice, Acharya Balkrishna, to appear in court on April 2, 2024, on March 19, 2024. The Supreme Court ruled sternly against the founders and directors of Patanjali Ayurveda, a firm that produces and markets a range of fast-moving consumer goods (FMCG) that it says are made using ayurvedic formulae and traditional expertise. The matter concerns an advertisement that the aforementioned Patanjali Ayurveda (“Patanjali”) released in 2022. The advertisement included claims and representations regarding the medicinal efficacy of several Patanjali products in comparison to traditional allopathic medicine for treating a range of human ailments (“Advertisement”). The Indian Medical Association filed a writ suit against the stated advertisement in the Hon’ble Supreme Court, claiming that it propagated false information that was directed primarily against the modern medical system. The legal representative for Patanjali, in an order issued by the Supreme Court of India on November 21, 2023, declared that “no casual statements of medical efficacy or against any system of medicine will be released in any media” and that “there shall be no violation of laws especially relating to branding and advertisement of products that are manufactured and marketed by it.” However, the Hon’ble Supreme Court of India was recently informed that Patanjali had persisted in publishing deceptive advertisements and false claims about their products, disregarding the court’s orders. The Hon’ble Supreme Court then filed a contempt of court case against Patanjali and has since The Uttarakhand State Licensing Authority and Patanjali have been sharply cautioned for their publication of deceptive advertisements and their failure to take appropriate legal action against the former as directed by the court.
1. Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954- The aforementioned act forbids the publication of any drug-related ads if they include any information that –
falsely represents the actual nature of the drug, either directly or indirectly; ii. makes an untrue claim about the drug; or iii. is otherwise inaccurate or deceptive in any significant way.
Any violation of the said Act’s provisions is punishable under the act by, among other things: a fine, an imprisonment term that may reach six months, or both; in the event of a subsequent conviction, a fine, an imprisonment term that may reach a year, or both.
2. The Cable Television Network Rules of 1994 and the Cable Television Network (Regulation) Act of 1995- Advertisements that contain references that could lead the public to believe that the product being advertised or any of its ingredients have some unique, miraculous, or supernatural quality that is hard to prove are prohibited by the Cable Television Network Rules of 1994’s Program and Advertising Code. Publishing false advertising about drugs is forbidden by Section 4 of the DOMA and is liable for penalties or imprisonment.
According to this section, no one may participate in the publication of any drug-related commercial if it includes any information that—
· conveys a deceptive impression about the genuine nature of the medication, either directly or indirectly; or
· makes a false claim about the medication or is deceptive in any other significant way.
3. Laws pertaining to the Consumer Protection Act- Moreover, deceptive or false advertising faces severe penalties under Section 89 of Consumer Protection Act, 2019. It stipulates that any manufacturer or service provider who permits the making of a false or misleading advertisement that is detrimental to the interests of consumers faces up to two years in prison and a fine of up to ten lakh rupees. Thereafter, offenders face up to five years in prison and a fine of up to fifty lakh rupees. Under the Act, any manufacturer or service provider that permits the making of a false or misleading advertisement that is detrimental to the interests of consumers faces up to two years in prison and a fine of up to ten lakh rupees. For each subsequent offense, the punishment increases to five years in prison and a fine of up to fifty lakh rupees. The Ministry of AYUSH and the Advertising Standards Council of India signed a Memorandum of Understanding in January 2017, yet Patanjali continued to violate advertising restrictions in spite of agreements between AYUSH and regulatory organizations.
Within the framework of the Patanjali case, it is important to acknowledge that, although Ayurveda is a recognized medical system that originated in India and has been valued for centuries, allopathy is a recognized modern medical system that is equally widely accepted and common among people in India and other nations. There is no denying that advertisements have a significant impact on the intentions and behavior of consumers. Therefore, any false promises regarding pharmaceutical items made by businesses with the sole motive of making money can significantly confuse and effect customer minds and manipulate their purchase decisions in today’s environment, when people are perceived to be more inclined towards healthier lifestyles. A major outline of the case culminates in the fact that big consumer brands and corporations need to understand their legal responsibilities and take responsibility for marketing their products with consideration for public health, which if compromised, can ultimately cause a grave threat to not only their life, but also personal liberties They also need to be aware that deceptive advertising is illegal in our nation and that they must market their products responsibly. In this light, the judiciary’s role in pre-empting damage by regulating misleading advertisements is commendable. This has been exemplified by numerous landmark judgements pronounced by the Apex Court.
Vinod Singhal v. Secretary of Medical and Health Department
In the case Vinod Singhal V. Secretary of Medical and Health Department. the writ petition filed by the petitioner requested that the respondent be held accountable for the vulgar and fraudulent advertising that were published and that all necessary measures be taken to stop the publication of such deceptive advertisements. In this lawsuit, the petitioner further requested that businesses and establishments that release any form of misleading or dishonest advertising that mislead and scam unsuspecting consumers face harsh consequences.
Sameer Jain & Anr. V. Union of India
In the case of Sameer Jain & Anr. v. Union of India, the case was filed in order to address the petitioner’s concern with the excessive authority granted to the Advertising Standard Council of India (ASCI). It has been argued that ASCI, a private organization, has full jurisdiction to control the publication of deceptive and false advertisements. According to the petitioner, it amounts to giving such an excessive level of power to a private organization as ASCI. According to the petitioner, the government has to be granted these powers. The Drugs and Cosmetics Act of 1940 and similar laws have pleaded for the government to be the sole entity with the power to separate fair and transparent advertisements from deceptive and misleading ones.
Horlicks Limited v. Zydus Wellness Products Limited[2020]
In this case, Horlicks, the plaintiff, filed a lawsuit seeking a permanent injunction against Zydus Wellness, the defendant. The defendant demonstrated in the advertisement that one cup of Complan is equivalent to two cups of Horlicks, and that one cup of Complan contains the same amount of protein as two cups of Horlicks. The plaintiff argued that even though the defendant and plaintiff had different serving sizes, the advertisement’s cup size was the same, leading to consumers’ misunderstanding. The plaintiff was granted an interim injunction by the court, which was found in their favor. The advertising, it claimed, was only broadcast for six seconds, not giving viewers enough time to read the disclaimer on the serving size. This just allows viewers to focus on comparing one cup of Complan with two cups of Horlicks, rather than on the disclaimer of varying serve sizes. The advertisement was deemed misleading by the court. The aforementioned pair of case laws suggest that the manufacturer is required by the Consumer Protection Act of 2019 to not only remove the deceptive advertisement but also compensate the consumers and amend it. Even the endorser is responsible for paying the fine under this new law. They must confirm the information and the claims they make in the advertisement. The endorser and maker will be discouraged from creating deceptive and fraudulent advertisements by these clauses.
Coalgate Palmolive India Ltd. v. Hindustan Lever Ltd.
A further example of this is the case of Colgate Palmolive India Ltd. v. Hindustan Lever Ltd in which the defendant featured samples of saliva being taken from two children, one of whom brushed his teeth with New Pepsodent and the other with a “leading brand of toothpaste,” in its television commercial for the product. The kids were asked to identify the toothpaste they used to brush their teeth later on when the samples were being collected. One responded with Pepsodent, while the other’s reply was mumbled. But the child’s lip movement suggested that he uttered “Colgate.” Furthermore, as soon as the boy spoke, the Colgate advertisement’s jingle sounded. The advertisement went on demonstrating that the “leading brand of toothpaste” sample had more bacteria in it than the New Pepsodent sample. The respondent’s advertisement was deemed by the court to be derogatory.
What More can be Done?
Additional steps that can be taken to stop deceptive advertisements include the implementation of specific advertising regulations. There are rules exclusive to some sectors. To guarantee that they do not make unsupported claims about the safety or efficacy of drugs, pharmaceutical advertisements are subject to strict regulations. False advertising, also name for deceptive advertising, is when a producer uses unclear, deceptive, or outright false claims to market a product. By enforcing particular laws, advertising law will shield consumers from misleading advertising. The goal of both consumer and advertising law is to encourage truth in labelling. “Truth in labelling refers to printing on the product’s label all relevant information that a reasonable consumer would be aware of. Consumers will be safeguarded and informed about exactly what they are purchasing thanks to this. This restricts the degree of deception by producers and promoters.
A thorough strategy is necessary to stop deceptive advertising. It is essential to update laws, impose harsher fines, and make sure that organizations like the Advertising Standards Council of India (ASCI) and the Central Consumer Protection Authority (CCPA) receive the resources they need to strengthen regulatory frameworks and enforcement procedures. It is essential to encourage industry accountability through strong compliance programs, required self-regulation rules, and ethical practice certification. Vigilance will increase if consumers are towered through advocacy group assistance, reporting procedures that are made simpler, and awareness campaigns. In order to identify and stop dishonest behaviours, technology can be used, such as blockchain for transparency and artificial intelligence for real-time surveillance. Together, industry workshops, international cooperation, and public-private partnerships will promote a united front against deceptive advertising. Feedback systems, regular audits, validated claims, transparent advertising tactics, and clear disclaimers will enhance transparency and accountability in the transaction process overall.
Conclusion
Despite the existence of comprehensive regulations like the Consumer Protection Act of 2019 and various other legal frameworks, enforcement remains a key issue. High-profile cases such as the Patanjali Misleading Advertisements scandal illustrate the ongoing challenges in ensuring compliance and protecting consumer rights. The judiciary has played a crucial role in addressing these issues, as seen in landmark cases like Vinod Singhal v. Secretary of Medical and Health Department and Horlicks Limited v. Zydus Wellness Products Limited. However, the effectiveness of regulatory bodies such as the Central Consumer Protection Authority (CCPA) and self-regulatory organizations like the Advertising Standards Council of India (ASCI) remains limited by enforcement challenges and resource constraints. In conclusion, while significant strides have been made in regulating false and misleading advertisements in India, much work remains to be done. A more nuanced approach that combines robust regulatory frameworks, effective enforcement, industry accountability, consumer empowerment, and collaborative efforts is essential to create a transparent and trustworthy advertising environment. By adopting these strategies, India can protect consumer rights, promote fair competition, and ensure that the advertising landscape supports informed and ethical consumer choices.
Submitted by Chaitanya Krishna Talapoola, School of Law, Christ University, Bangalore