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Tough advertising guidelines good, but sensible approach needed

With the degree of subjectivity involved, infringements are bound to occur. Hence, penalties should be confined to repeated infringements or continuing violations

August 16, 2022 / 11:40 AM IST
Representative image

Representative image

Recently-issued guidelines by the Consumer Affairs Ministry for the prevention of false or misleading advertisements make one thing clear: `No deceit.’

For instance, clause 4 of the guidelines details the conditions to be fulfilled by an advertisement. These include: ``Does not mislead consumers by exaggerating the accuracy, scientific validity, or practical usefulness or capability or performance or service of the goods or product.’’

Nor should an ad suggest that the claims about the product (for instance, that certain types of fats are good for you) are universally accepted, when there is significant scientific divergence over these claims.

If a product is supposed to offer a feature, under law, that feature cannot be offered as a distinctive feature. For instance, if an ingredient is prohibited in a food product, the label cannot say it is free of that prohibited ingredient.

We have all seen advertisements that fall foul of such requirements. So far, rules for advertising were laid down by the Advertising Standards Council of India, a voluntary, self-regulatory body. But their guidelines did not have the force of law. So not only have the rules got stricter than ever, they are also enforceable now in a court of law.

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The new rules come down heavily on surrogate advertising. An advertisement will be considered surrogate if it uses any brand name, logo, or layout associated with a prohibited product or service.

Thus, music festivals and bottled water may not be branded by alcohol manufacturers. It will be interesting to see if the surrogate advertiser claims that the product being advertised does indeed exist, and has a market.

There are new rules for advertisements that are baits. That is, a ‘sale’ may be promoted only if there is sufficient stock to meet the demand that might arise from the advertisement, and if not, it must make it clear that stocks are limited.

Also, ads cannot offer a product at a certain price without a reasonable prospect of selling the advertised goods at that price.

So what happens to advertisements that offer up to 80 percent off, but there are only a handful of items in the store that are thus discounted?

Similarly a product cannot be advertised as free if the customer has to pay anything (other than the cost of responding / collecting) for it. Otherwise, the advertisement shall make clear the extent of the commitment required.

An ad cannot have a disclaimer that contradicts the content of the ad. Also, the disclaimer will have to be in the same font as the rest of the ad, prominent and visible, and in the case of a voice-over, spoken at the same speed in which the rest of the ad is.

Responsibility also been fixed on endorsers – celebrity endorsers can no longer claim they were just reading off a script.

Such rules are becoming a global practice. America’s Federal Trade Commission (FTC) has released draft guidelines for public comments with similar regulations.

Australia penalises false advertising with a maximum of AUD 10 million, or three times the benefit accrued, or 10 percent of the turnover, whichever is greater.

In America, the FTC can impose fines of up to $44,000 per offence. Some countries even have jail term for such offences.

India has been cracking the whip post the incorporation of the Consumer Protection Act, 2019. For instance, the makers of Sensodyne toothpaste were fined Rs 10 lakh for claiming it was ‘recommended by dentists worldwide.’

Perhaps India should consider the American approach. The FTC sent out notices to 7,000 companies across America for possible violations. If infringements continued, they would be subject to fines.

One thing that can be said for certain is that with the amount of subjectivity involved, infringements are bound to occur. The best the regulator can do is adopt an iron-fist-in-velvet-glove approach with timely warnings, and penalties only for repeated infringements or continuing violations.

Abraham Mathews is an advocate based in Delhi. Twitter: @ebbruz. Views are personal and do not represent the stand of this publication.
Abraham C Mathews is an advocate based in Delhi. Twitter: @ebbruz. Views are personal.
first published: Aug 16, 2022 11:37 am
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