Guidelines for the prevention of misleading advertisements and approvals for misleading advertisements, 2022 – Part 1 – Advertising, marketing and branding

On June 9, 2022, the Central Consumer Protection Authority (CCPA) of India issued Guidelines for the Prevention of Misleading Advertisements and Approvals for Misleading Advertisements, 2022, with the intention of combating misleading advertisements and to protect consumers, who may be exploited or affected by these advertisements. .

This article has been divided into three parts. In Part 1, we present the guidelines and discuss the provisions for bait advertising, substitution advertising and free claim advertising, as well as the penalty for violating these guidelines. In Part 2, we discuss the provisions relating to advertisements targeting children and disclaimers in advertising.

The guidelines aim to ensure that consumers are not duped by unsubstantiated claims, over-promises, misinformation and false claims. These misleading advertisements violate various consumer rights, such as the right to be informed, the right to choose and the right to be protected from potentially harmful products and services, which have been granted under Article 2 (9 ) of the Consumer Protection Act, 2019.

The guidelines apply to advertisements posted on all platforms, including print, television and digital platforms. Chief Commissioner of the Central Consumer Protection Authority (CCPA) and additional secretary of the Ministry of Consumer Affairs, Nidhi Khare, said that while these guidelines will not bring change overnight, they provide a framework enabling industry stakeholders to prevent misleading advertisements, even by mistake, and enabling consumers and consumer organizations to file complaints against misleading advertisements. Advertising guidelines for self-regulation issued by the Advertising Standards Council of India (ASCI) will also be in place alongside it, she added.

While “misleading advertisements” are already defined in the Consumer Protection Act 2019, as “an advertisement that— (i) falsely describes such a product or service; or (ii) makes a false warranty or is likely to mislead consumers as to the nature, substance, quantity or quality of such product or service; or (iii) conveys any express or implied statement that, if made by the manufacturer, seller or service provider thereof, would constitute an unfair trade practice; or (iv) deliberately conceals material information”the Guidelines for Misleading Advertisements and Endorsements for Misleading Advertisements, 2022, (“Guidelines”) formally define terms such as “substitute advertising” and “bait advertisements” and provide what constitutes “free claiming advertisements”.

Specifically, “bait advertising” has been defined as “an advertisement in which a good, product or service is offered for sale at a low price to attract consumers.According to section 5 of the guidelines, to be classified as bait, advertising must meet the following conditions:

  1. Not seek to induce consumers to purchase without any reasonable prospect of selling the advertised goods, products or services at the price offered;

  2. The advertiser must ensure that there is a sufficient supply of the goods, products or services advertised to meet the foreseeable demand generated by this advertisement;

  3. Indicate the advertiser’s reasonable grounds for believing that it might not be able to supply the advertised goods, products or services within a reasonable time and in reasonable quantities;

  4. Not to mislead consumers about market conditions regarding advertised goods, products or services or the lack of availability thereof in order to induce consumers to purchase under conditions less favorable than normal market conditions.

For example, “sales…..while supplies last” ads are bait that persuades a consumer to buy at a given time to simply push a product as if it were the last item in the product or service, regardless of price. and actual need versus created need. Another example of bait advertising was seen in Aero Club vs. Rakesh Sharma1 , where Aero Club engaged in the sale of Woodland footwear and apparel. While the advertisement claimed a flat-rate discount of 40%, Aeroclub charged VAT on the price obtained after granting that discount. The Court ruled that the ad was misleading advertising amounting to unfair trade practices. Fun Fact – In August 2020, LocalCircles released consumer research that suggested 73% of consumers had encountered bait advertisements in the past year.

Then the substitute advertisement was defined as “an advertisement for goods, products or services, the advertisement of which is otherwise prohibited or restricted by law, circumventing such prohibition or restriction and presenting it as an advertisement for other goods, products or services, the advertisement of which is not is not prohibited or restricted by law.” Pursuant to Section 6 of the Guidelines, an advertisement is considered a substitute advertisement or an indirect advertisement if:

  1. this advertisement states or suggests that it is an advertisement for goods, products or services the advertising of which is prohibited or restricted by law;

  2. this advertisement uses a brand name, logo, color, layout and presentation associated with such goods, products or services the advertising of which is prohibited or restricted, provided that the mere use of a brand name or of a business name that may also apply to goods, products or services the advertising of which is prohibited or restricted shall not be considered substitute advertising or indirect advertising if such advertising is not otherwise reprehensible.

The most popular method of substitution advertising in India involves advertisements for alcohol and tobacco products (the advertisements of which were banned under the Cigarettes and Other Tobacco Products Act 2003 and network rules cable television from 1994) in the form of music CDs or airlines. , or digitally by sponsoring IPL matches.

However, the Guidelines now prohibit surrogate advertising and all indirect advertising that circumvents this prohibition or restriction by impersonating advertising for other goods or services, the advertising of which is not prohibited by law. The CCPA can impose a penalty of up to Rs 10 lakh on manufacturers, advertisers and endorsers for any misleading advertisement. For subsequent offences, the CCPA can impose a fine of up to 50 lakh rupees. The Authority may prohibit the endorser of misleading advertising from affixing a statement for a maximum of one year and, in the event of a subsequent violation, the prohibition may extend up to 3 years.

Next, the guidelines require free claim advertising for:

  1. not describe the goods, products or services as “free”, “no charge” or use other terms if the consumer must pay anything other than the unavoidable cost of responding to such advertising and collecting or paying for delivery of these Object

  2. specify the extent of the commitment that a consumer must make to take advantage of a free offer

  3. not describe any good, product or service as being free, if–

the consumer must pay for the packing, packaging, handling or administration of such free goods, products or services;

the cost of the response, including the price of goods, products or services that the consumer must purchase to take advantage of this offer, has been increased, unless such increase results from factors unrelated to the cost of the promotion; Where

the quality or quantity of goods, products or services that a consumer must purchase to take advantage of the offer has been reduced

  1. not describe an element of a package as free if that element is included in the price of the package

  2. do not use the term “free trial” to describe a “satisfied or refunded” offer or an offer for which a non-refundable purchase is required.

For example, free calls in mobile phone tariff plans may seem attractive until the consumer realizes that in order to obtain “free” service from a call or an SMS, one very often has to make a call or SMS to pay for all calls or SMS. say free.

We will continue our discussion of the Guidelines for the Prevention of Misleading Ads and Approvals for Misleading Ads, 2022 in Part 2.

Quotes:

[1] https://pib.gov.in/PressReleasePage.aspx?PRID=1832906

[2] https://indianexpress.com/article/inde/govt-new-guidelines-misleading-ads-bans-surrogate-ads-7963330/

[3] https://cuts-cart.org/pdf/Study_on_the_Status_of_Law_Enforcement_for_Misleading_Advertisements_in_India.pdf

Footnote

1 RP n° 3477 of 2016

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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