AUTHOR BY – T S ACHALA / Gujarat National Law University
Introduction
False advertisements present a fundamental risk to consumer rights and market integrity in India. Whether by false representations, or failure to provide information, false advertisements mislead the general public, forming a barrier to informed decision-making, and threatening public health and safety. The issue is widespread, ranging from pseudo-scientific health products to misleading promotions by digital influencers. This issue is an evolving one. Indian law offers a strong, but fragmented framework for misleading advertisements, encompassing general protections for consumer rights, as well as sector-specific regulations.
Misleading advertisements are some of the most formidable tools within the unfair trade practice definition since the edge between persuasion and deception is quite blurred. In India, deceptive advertising is defined legally by the Consumer Protection Act, 2019 (“Consumer Protection Act”). A misleading advertisement is one that: • Presents the product or service in a false manner; or • Falsely or misleadingly represents a guarantee, warranty, or similar statement regarding a product or service, according to Section 2(28) of the Consumer Protection Act.
Thus, misleading advertisement captures a broad category of commercial communication, relying on express and implied representations.
This article highlights the laws and regulatory frameworks that govern misleading advertisements, reviews some developments in the judiciary, and highlights the need for better enforcement, as well as protecting consumer rights.
Sector-Specific Regulations and Enforcement Mechanisms
Consumer Protection Act, No. 35 of 2019, § 2(28), India Code (2019). Consumer Protection Act, No. 35 of 2019, § 2(28), India Code (2019).
The Consumer Protection Act, 2019, is an amalgamation of laws to regulate deceptive or misleading advertising in essential and complex areas such as healthcare, food, and broadcasting. The Drugs and Magic Remedies (Objectionable advertising) Act, 1954, is a significant piece of legislation in the healthcare industry that forbids marketing that promise “magical” treatments for illnesses. The Act contains provisions prohibiting misleading representations on depictions of diseases, such as diabetes and all kinds of sexual abnormalities in Sections 3 and 4. While the Act is decades old, it is still crucial to oversee aspects of pseudo-scientific representations, especially advertising and representations frequently depicted on television and the digital space.
The Food Safety and Standards Act, 2006 (FSSA) is a legislative concept that offers certain enforcement tools for food safety representation. For instance, Section 24 expressly prohibits misleading advertisement of food products, and the FSSAI has taken action against companies making misleading health claims or marketing their products as “organic” or “natural”, particularly if these products are marketed towards children, and/or sold without appropriate certifications.
With respect to Broadcasting, Section 6 of the Cable Television Network (Regulation) Act, 1995, provides that the advertisement must comply with the Advertising Code (Rule 7 of the Cable Rules), which is important to deal with exaggeration and representational verification via television.
These are some of the sector specific regulations existing which are addressing the issue of misleading advertisements.
Precedents addressing misleading advertisements
Consumer Protection Act, No. 35 of 2019, India Code (2019) Drugs and Magic Remedies (Objectionable Advertisements) Act, No. 21 of (1954) Drugs and Magic Remedies (Objectionable Advertisements) Act, No. 21 of (1954) § 3 Drugs and Magic Remedies (Objectionable Advertisements) Act, No. 21 of (1954) § 4 Food Safety and Standards Act, No. 34 of 2006, India Code (2006).Food Safety and Standards Act, No. 34 of 2006, § 24, India Code (2006). Cable Television Networks (Regulation) Act, No. 7 of 1995, § 6, India Code (1995).
Judiciary through its pronouncements has had a significant role to play in regulating and addressing the issue of misleading advertisements from legal perspectives in India, especially in balancing consumer protection with free commerce. In Horlicks Ltd. v. Zydus Wellness Products Ltd.,, the Delhi High Court noted that while comparative advertising cannot be misleading or denigrate another competitor, comparative advertising is permissible under the Laws of India. Certain food products and supplements are dangerous, and as stated above, the defendant published an advertisement with an objectively incorrect statement that falsely claimed that Horlicks is superior, and thus misleading, and the court restricted the advertisement. The Court determined that marketers are entitled to advertise the positive aspects of their product, but they cannot do so based on misleading statements or misrepresenting the competitor with falsehoods.
Hindustan Unilever Ltd. v. Gujarat Co-operative Milk Marketing Federation Ltd.,, is another instructive case which involved the Bombay High Court, where a misleading advertisement was deemed to include misleading facts in the advertisement to gain a competitive advantage. The court reiterated that advertising is an expression of goodwill which should not abuse the trust of consumers or distort fairness and competition through falsehood or half-truths.
Along with the courts, the Advertising Standards Council of India (ASCI) has taken on a significant role as a self-regulatory body. The ASCI is a non-statutory organisation, but the ASCI’s Code for Self-Regulation in Advertising (2023 ed.) is accepted by all members of the advertising ecosystem. ASCI has acted to ensure that advertisements are not misleading, indecent or unethical and will receive and consider complaints by consumers through its Consumer Complaints Council. While it has no statutory authority and is in no way legally binding, ASCI decisions can carry significant persuasive value in the courts and in consumer forums, and many broadcasters and firms would respect ASCI decisions. The Ministry of Information and Broadcasting has issued advisories requiring conformity to ASCI codes, which further lends ASCI quasi-regulatory significance. In short, where courts are reactive, not proactive, ASCI has responded and acted in a timely manner, as a self-regulatory body to protect consumers, transparency and ethical practice in advertising.
Misleading Digital Marketing and Influencer Endorsements
Horlicks Ltd. v. Zydus Wellness Products Ltd.,# 2019 SCC OnLine Del 10748 Hindustan Unilever Ltd. v. Gujarat Co-operative Milk Marketing Federation Ltd., 2017 SCC OnLine Bom 10312. Advertising Standards Council of India (ASCI), Code for Self-Regulation in Advertising (2023 ed.) (India), available at https://ascionline.in.
The rise of digital platform advertising, as well as social media advertising, has changed the advertising landscape from traditional advertising to advertising with and through influencers on the Internet. It is an innovative form of advertising, and while the entire advertising sector continues to adapt to and approach the phenomenon of digital advertising more seriously, the impact of digital advertising has already caused many more misleading advertisements to happen, particularly due to the acceptance of influencer endorsements without disclosure, or with poorly written disclosures. The Central Consumer Protection Authority (Consumer Protection Act) in India takes regulating misinformation or false advertisements and misleading advertisements with priority. To counteract misleading advertisements and advertising, the Consumer Protection Act established the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022, indicating specific reference to celebrity endorsements and influencer endorsements by celebrities and influencers, whether a human being or a virtual influencer. The guidelines also required that influencers disclose their ordinary and non-ordinary relevant connections with brands, and more importantly, that any money and products were given to and/or received by the influencer. The influencer has the discretion of deciding how to disclose, whether it be on a platform, or the opportunity to provide disclosure in a clear and conspicuous manner, both required so consumers are not misled into thinking the promotion being made is independent or impartial.
Constraints in the Enforcement of Law Relating to Misleading Advertisements
India has access to solid legislative instruments in the Consumer Protection Act, 2019 (Consumer Protection Act) and other sectoral legislative tools (for example, the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954); however, it continues to face enforcement problems in respect of misleading advertisements. The first enforcement problem is jurisdictional overlap—there is also overlap in the enforcement zone of several regulatory bodies, namely, Central Consumer Protection Authority (Consumer Protection Act), Food Safety and Standards Authority of India (FSSAI), Telecom Regulatory Authority of India (TRAI), other regulatory bodies and parameters at the ministry level. The regulatory aspects are often duplicated and even diluted. Further, consumer forums set up to aid consumers in claiming redress whenever they perceive that a misleading advertisement has taken place are riddled with red tape, resulting in delayed grievance redress, which removes the incentive for consumers to pursue further claims. Lack of consumer awareness makes the problem even worse, as most citizens are not aware of the Consumer Protection Act processes, or they are not even aware of their right to recourse to the Consumer Protection Act. In some non-critical areas, low penalties are simply not enough to deter habitual offenders. Lastly, in a time when advertising is becoming a significant part of our daily lives, it affects millions of consumers and crucially affects the decisions taken by these millions of consumers because of total digital reliance. Weak enforcement will inevitably lead to exploitation and a loss of consumer trust in the message, products and services of the advertising practices.
Recommendations to Improve the Legal and Institutional Mechanisms
To control the rampant growth of misleading advertisements, India has to move beyond policy and go for systemic reform. First, the Consumer Protection Act, 2019, needs to be amended to expand the powers of the state-level branches of the Consumer Protection Act to respond to misleading advertisements more quickly, and to also impose stricter penalties against repeat violators. Second, a centralised national online system for filing complaints against misleading advertisements, which is accessible to complainants in vernacular languages, should be established to provide faster and transparent resolution of grievances. Coordination among statutory regulators, including but not limited to the ASCI (Advertising Standards Council of India), FSSAI, TRAI, and Consumer Protection Act, must be enhanced; a coordinating inter-agency task force should be established to monitor and tackle misleading advertising on a national level, and to comply with the obligations under the Consumer Protection Act, 2019. The regulations should clearly disallow disclaimers in cases of illegible font and inquiring vague terms. There is a serious issue with disclaimers that are misleading in fast-moving consumer goods and financial services. Education systems should include media literacy classes to create consumers who can identify misleading content. These are common-sense measures, and not only represent consumer interest, but also the development of a fair market ecosystem.
Rights of prisoners under Indian laws
Conclusion: Towards an Equitable and Transparent Framework for Advertising
False and misleading advertisements contradict the idea of trade practices that are fair, interfere with the free choice of consumers, and ultimately threaten public health and economic welfare. The Consumer Protection Act, 2019 and initiatives such as the Consumer Protection from Online Marketplaces Act represent a significant advance in consumer protection law. But the key issue is enforcement, which will require a multi-faceted approach of: proactive regulatory hands-on monitoring; penalties for offenders; and an educated public. More digitally driven platforms provide avenues for influencers to endorse products and advertisements through targeted algorithms, and often without process or oversight. Therefore, the regulation of advertising in India needs to make a distinction between advertisement as creativity, and advertisement as legal responsibility and ethical duty. A legal regime that wraps honesty, accuracy, and social responsibility into an advertising standard is not a fancy idea of utopia—but a constitutional and statutory obligation. To protect consumers from false and misleading advertisements is not just a regulatory issue but a socio-legal obligation that goes to the heart of democratic and economic rights.
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