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FALSE PROMISES, REAL HARM: SAFEGUARDING CONSUMERS IN THE FACE OF MISLEADING ADVERTISEMENTS AUTHORED
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FALSE PROMISES, REAL HARM: SAFEGUARDING
CONSUMERS IN THE FACE OF MISLEADING ADVERTISEMENTS
AUTHORED BY - T.H.
ALOK NARAYANAN
CO-AUTHOR - ANAGHA
MOHAN
ABSTRACT
Advertising has become widespread and influential in human life and society
during the past few decades. Advertising is a crucial marketing tactic
that has evolved significantly to
impact consumer perceptions of a
specific product. Advertisements promote products and educate consumers to
facilitate them in making
comparisons between similar things. Advertisements must be accurate and not
deceptive. Typically, a thin boundary separates a "misleading
advertisement" from an overstated advertisement designed to aggressively
promote a product. Misleading advertising poses a major challenge, adversely
affecting customers in different sectors. Deceptive marketing strategies
frequently result in clients facing false promises, which ultimately lead to
dissatisfaction and financial difficulties. Legislation, regulatory actions,
statutory measures, and consumer education are essential in combating the
negative impacts of misleading advertisements. This paper aims to examine and
analyze the issue of misleading advertisements, misleading health claims and
problems of deepfake in advertising, the role of ASCI, the legal protection
available to consumers, and important judgments dealing with this issue.
Advertising
is an essential component in the process of supplying consumers with the
information they need to make educated choices about the products that are
available on the market. Although the principal objective is to exhibit the favorable qualities of the products being advertised, there is a
prevalent inclination to exclusively emphasize the merits of the endorsed merchandise while
diminishing or excluding any
negative attributes.
The deliberate or negligent promotion of products or services
through the dissemination of false information constitutes misleading
advertising. Regulations have been put in place by a number of governments to help prevent
misleading advertising which is common concern around the globe. Businesses may
face legal repercussions for false advertising; therefore, it is vital to avoid
making deceptive claims. Advertisers are obligated to provide evidence
to back up their claims,
employ language that is easy to understand, steer clear of making
incorrect comparisons, and reveal relevant information. This facilitates the
development of lawful, effective advertising campaigns that effectively reach
their intended audiences.
THE ROLE OF ADVERTISING
IN THE INDIAN SOCIETY
Advertisements
have a significant influence on society, which cannot be denied, even to a
minor extent. India's substantial and growing middle-class population makes it
a major worldwide market with hundreds of millions of potential customers.
International corporations focus on India's population for its workforce and as
a potential market for their goods and services. Cinema personalities are
clearly popular among the public. The cinema has had a profound influence on
Indian society for many years, resulting in the widespread use of movie stars
for advertising and promoting goods and services. This phenomena is more
prevalent in India than in other countries.. While the impact of actors in
films and ads on customers has been acknowledged and utilized for promoting
government welfare policies, there is currently
no legal requirement that holds them accountable. Even a cautious customer
cannot deny being persuaded by commercials, which significantly effect consumer buying
behavior. It is concerning that individuals exposed to
these advertisements may link the positive traits of a celebrity endorsing a
product with the qualities of the product itself, potentially leading them to
believe in the product's virtues as portrayed in the ads. This may result in
certain incorrect and misleading information about the product being
transmitted to the customer and would be as the Act specifies ‘prejudicial to
the interests of the consumer. .
The visual effects, music, and content in commercials have a significant
role in attracting customers psychologically to buy products, sometimes
overshadowing truth.
ETHICS IN ADVERTISING
Advertising
possesses ethical worth. Art and facts in commercial communication must adhere
to ethical norms. Today, in a
competitive market, advertisements must be honest and ethical. Misleading
advertisements might damage the organization's credibility. To understand the
truth in advertising, it should be examined from the consumer's perspective
rather than a legal standpoint. The advertising business is sometimes condemned
for disseminating deceptive or overstated assertions on the products, goods, and services
being promoted. It is also seen as promoting behaviors or inclinations considered bad and cultivating a culture of excessive consumption. It is challenging to clearly
distinguish between truth and falsehood. The commercial is evaluated based on its effect and how well it is received by customers. The product must meet the claims made in its advertisement. Advertisements should be appropriate
and not include any offensive
content. It must be honest.Advertising is a social process
that should adhere
to established social standards and not offend our
moral sensibilities.
THE
CONUNDRUM OF MISLEADING ADVERTISEMENTS
Misleading advertising involves the use of
deceptive details to persuade consumers to buy a product. Sincere
representation of products, services, and prices is of the utmost importance
for both manufacturers and sellers.
Companies
employ hidden fee as deceitful tactics to deceive people into paying a higher
price for promoted products, boosting profits without raising the product's
price. Deceptive advertising involves presenting a product with a specific
quality that is not accurate, knowing that it is actually faulty or of lesser
standard. Angel Dusting is the practice of incorporating a minuscule amount
of an element that does
not offer any noticeable advantage to the user. A cereal
may advertise that it contains twelve essential vitamins and
minerals, but the amounts may not match the Reference Daily Intake standards.
Sellers employ
the bait and switch tactic
to lure buyers into buying a more advanced
version of the original product. They advertise a low-cost product without
actively marketing it, then later reveal
that it is of lower quality when compared to the pricier alternative. The salesman then
upsell customers by convincing them to buy the premium model that is not on
offer.
Misleading
or deceptive advertising is a pervasive concern within the marketing domain,
encompassing the distribution of visual content or information that is
misleading or implausible with regard to a product. Businesses use this tactic
to advertise products by making false claims about the features or capabilities
of the product. Consumers may be duped into purchasing counterfeit, defective,
or potentially hazardous products
as a result of such deceptive advertising. An example is the
promotion of Juul E-Cigarettes[1]
as a safe substitute for regular cigarettes, despite having elevated nicotine
levels. Volkswagen's[2]
promotion of "clean diesel" vehicles was false because the business
had been cheating on emissions testing for a long time, resulting in
accusations by the Federal Trade
Commission.
Consumers
are advised to exercise prudence
when confronted with claims that seem excessively favorable, as deceptive advertising transcends industry boundaries. It is advisable to remain updated on health alerts, safety
notifications, product recalls, and other pertinent information to mitigate the
potential for harm Deception in generality delineates a regulatory framework
pertaining to deceitful advertising practices in the insurance sector. It bans
the use of advertisements that could mislead or defraud consumers, regardless
of whether the promoted policy is actually given to the insured before the sale
is completed. The legislation prohibits advertisements from containing misleading
or deceptive content, particularly if the information is confusing or only
comprehensible to those well-versed in insurance terms. The purpose of this
regulation is to promote integrity and openness in the realm of insurance
advertising.[3]
Deceptive
pricing is regarded by consumers as a manipulative tactic intended to deceive
and exploit unsuspecting purchasers. However, enterprises may rationalize these pricing strategies as
crucial for their continued existence in fiercely competitive industries. By
recognizing and examining both viewpoints, a deeper understanding of the
intricacies related to misleading pricing can be attained.
Businesses
employ a variety of tactics to influence customer behavior through deceptive pricing
practices. A commonly
employed strategy is the "bait and switch"
method, which involves initially advertising a product or service at an alluringly low price to attract consumers. However, upon closer inspection,
these individuals are dissuaded by the product or service's unavailability or
substandard quality. To further boost the apparent worth of a later discount,
"price anchoring" also entails setting an exaggerated initial
price. Additionally, the presence of concealed fees and
charges, including shipping expenses or service fees, obscures the actual
overall cost.
The intricacy of contrasting items from various companies
in advertising is emphasized by the possibility of deceit on the part of advertisers who choose to
highlight certain parts of their product
as superior while ignoring others. Consumer
confusion is sometimes caused by this technique, which frequently uses phrases like "stronger" or "better" in comparison without
giving the consumer
an understandable reason for
the comparison. In 1997, Pizza Hut and Papa John's were involved in a legal
fight over the phrase "Better Ingredients. Better Pizza." The lawsuit
was dismissed as a result of the Fifth Circuit Court of Appeals' determination
that the slogan failed to provide consumers with an objective statement of fact
upon which they could rely.[4]
THE PROBLEM OF DEEPFAKE TRICKERY IN THE REALM OF MISLEADING ADVERTISING
The
progress of artificial intelligence and technology has resulted in several legal
challenges, including the widespread use of deepfakes in advertising. Consumers
find it difficult to detect these deepfakes because of their highly realistic
and convincing appearance. Deepfake marketing can deceive consumers and cause
privacy problems for the individuals shown in the manipulated information,
presenting a substantial risk to consumer protection.
Deepfakes are digitally modified visual and auditory materials that
portray individuals performing actions or uttering statements that were never
genuinely executed or stated, often with the intent to deceive or exert
influence over others. Illustrative instances comprise
deepfake videos that portray
well-known individuals such as
Elon Musk and Joe Rogan endorsing products.
Deepfake
content creation often constitutes a breach of privacy and intellectual
property rights. Furthermore, unauthorized deepfake advertisements may potentially
damage the reputations of the individuals depicted and be deemed deceptive and
fraudulent, in violation of marketing regulations and privacy rights.
Ethical,
legal, and commercial concerns have been raised in response to the
proliferation of AI-generated representations on mainstream platforms such as
Instagram and TikTok, including deepfake advertising. While this technology may
facilitate the proliferation of false information
and give rise to significant
concerns, it also presents
potential economic benefits
when employed in an ethical and lawful manner.
The
advancement of artificial intelligence-driven deep learning has led to dark
patterns evolving into more complex and visually appealing techniques. Examples
of unethical practices include utilizing manipulated images or videos of
celebrities for marketing, spreading false political propaganda, distributing explicit content,
and sharing deepfake media to get followers and sponsorships.
The definitions of consumer rights (sec 2(9), misleading advertisement
(sec 2(28), and unfair trade practices (sec 2(47) of Consumer Protection
Act,2019 are sufficiently broad to
cover the use of deepfakes, although the majority of criminals remain unidentified. Courts can only issue
ex-parte injunctions with limited possibilities for financial or punitive
outcomes. This will not provide any reconciliatory advantages to consumers or
individuals in a continuously growing internet expansion.
A significant portion of these
deceptive adverts are seen
on social media platforms. For example, individuals who use YouTube or
Instagram may have encountered images or videos of famous individuals promoting
lottery games and unfamiliar trading applications. An illustrative example is
the legal case of Karen Hepp vs Facebook. A news anchor filed a lawsuit against
Facebook for allowing an advertising promoting erectile dysfunction that used the
anchor's altered photographs without her permission, promising viewers the
opportunity to meet "single women." The US Court ruled in favor of
Hepp, stating that her esteemed reputation could potentially mislead consumers
into believing she supports the business.
Currently, organizations are not regulated by any law but instead follow
a "self- regulation" model they have created, which includes Ethical
Rules and Codes, to address the potential misuse of AI. This methodology has not been
demonstrated to be effective and has only been used to prevent regulatory
action and support the public relations efforts of these corporations. It is
crucial for the government to establish preventive measures to ensure that
advertisers do not use deepfakes or are required to disclose when
advertisements containing deepfake contents.
MISLEADING HEALTH AND NUTRITIONAL CLAIMS IN ADVERTSING
The
primary objectives of nutrition labeling policy and regulation of nutrition and
health claims (NH claims) are to facilitate the identification of food health
attributes for consumers to make healthier food choices and to prevent consumers from being deceived by misleading nutrition information.
The goal of front-of-pack nutrition labeling schemes
is to help customers accurately differentiate between healthy
and harmful goods.
It
is the responsibility of the Advertising Standards Council of India (ASCI) to
regulate and supervise the claims made on food labels in India. Labeling of
Food Claims can be categorized into:
Nutritional claims
give information about the nutrition
aspect of foods. These assertions hold
significance as they enable consumers
to make informed choices by selecting products that offer distinct
nutritional benefits in comparison to conventional foods. Nutrient content
claims and nutrient
comparative claims are the
two types of nutrition claims. Illustrations of such terms comprise
"fat-free," "low sodium," and "sugar-free," among
others.
Claims
based on health refers to the
relation between a food product and
its health benefit. Health claims
include assertions such as "plant sterols reduce cholesterol" and
"a diet rich in fruits and vegetables reduces the risk of developing
certain cancers." Each of these claims describes the benefit, function, or risk
reduction associated with a specific food item or component.
Non-addition claims refer to assertions concerning the absence of specific chemicals in a culinary product. The
components that are excluded from this category are no added carbohydrates, no
sodium salts, and no additives. In order to make a claim, the product in
question must be devoid of any additives, sugar, or sodium. Supplementary terms
or disclaimers may be employed to enhance consumer understanding of assurances pertaining to the omission
of constituents, provided
that they are conspicuously displayed and readily comprehensible on the product label.
Allegations in advertisements like it is baked and not
fried, protein rich, low calorie, are also increasing. The customers are also
willing to pay a higher price for the
same.[5]
Regrettably,
the proximity between guiding and misleading is often minimal, resulting to
confrontations between the food sector, policy authorities, and consumers
LEGISLATIVE PROTECTION AGAINST THE
ISSUE OF MISLEADING ADVERTISEMENTS: THE INDIAN SCENARIO
Several
pieces of legislation have been enacted for the purpose of addressing the issue
of misleading claims and advertisements that are made by businesses in relation
to their products. Some of those legislation include Drugs and Cosmetics Act, 1940,
the Food Safety and Standards Act,2006 etc. The regulation of misleading
advertisements in print media is the purview of the Press Council of India, in
accordance with Section 14 of the Press Council Act 1978. Private satellite TV
advertisements are governed by the
Advertising Code. In addition, the Food
Safety and Standards Authority includes provisions for the imposition of
penalties for advertisements that are misleading in relation to food
products. Some of the existing
regulatory authorities include the Insurance Regulatory Development Authority, SEBI
etc.
In
an effort to safeguard consumer interests and combat deceptive advertising, the
Central Consumer Protection Authority (CCPA)
in India has issued certain. The CCPA, established
under section 10 of the Consumer Protection Act of 2019, has the authority to
regulate issues concerning deceptive advertising, fraudulent business practices, and violations of consumer rights that have the potential to cause harm to the general
public and consumers. Its primary
objective is the safeguarding, enforcement, and protection of the rights
of consumers in their
entirety.
In case of United States
of America, The Lanham Act and the Federal Trade Commission Act of 1914 provide
civil litigation for misleading advertising, which involves misrepresenting
goods or services under 15 U.S.C. § 1125(a)1. The FTC enforces these laws for
consumers. Deceptive trade practices are governed by state legislation. For instance, California has enacted legislation that forbids the
distribution
of false or misleading information, carrying out penalties of both civil and
criminal nature.
The
UK's advertising business is regulated by the Advertising Regulations 2008
(CPR), which enforce the Unfair Commercial Practices Directive, a set of European regulations for consumer protection. The regulations evaluate
unfairness in business- to-consumer transactions by applying four criteria to detect
misleading advertising: non-compliance with professional diligence
standards, false or deceptive conduct, failure
to disclose important
information, and aggressive tactics such as harassment,
coercion, or undue influence. Advertisers in England, Scotland, Wales, and certain
regions of Ireland must adhere to these limitations.
Despite the 32 years since the implementation of Consumer Protection Act in India,
manufacturers and service providers persist in exploiting Indian consumers. Ads
frequently make exaggerated claims in an effort to attract more customers,
while truth and ethics frequently take a back position in a competitive
marketplace. Advertisements must be truthful in order to affect consumer
decision because they not only inform customers but also persuade them to buy a
product.
ROLE
OF ASCI IN PROTECTING CONSUMERS
A
non-statutory self-regulatory organization, the Advertising Standards Council
of India (ASCI) was founded in 1985 in accordance with Section 25 of the Companies
Act, 1956. Complaints are addressed
in accordance with the organization's
Code of Advertising Practice (CAP), which endeavors to protect deceptive
advertisements and promote truthfulness and integrity in advertising. The ASCI
Code for Self- Regulation was developed by professionals and industries in
advertising, in collaboration with representatives of those impacted
by advertising. It was endorsed as fundamental principles by
individuals, organizations, and groups involved in or interested in advertising
practices.
It
involves a dedication to truthful advertising and equitable competition in the
marketplace. It represents safeguarding the lawful interests of consumers and
all parties engaged in advertising, including advertisers, media, advertising
agencies, and other contributors to advertising development or distribution.
Guidelines have been created for advertisements with terms applicable to
professionals, physicians, celebrities, and other relevant individuals. The
ASCI code book contains rules and
clauses about disclaimers on products, including specifications for type, font
size, font language, and font color to prevent deceptive ads.
On the other hand, the ASCI is confronted with difficulties in implementing effective compliance due to the absence
of enforcement tools and the fact
that non-members are not complying
with the regulations when complaints are filed against them. Prudent
legislation that eradicates ambiguity and uncertainty is imperative in order to resolve forthcoming inconsistencies.
A
report titled "Law enforcement for deceptive advertisements in India"
was released by the Consumer Unity and Trust Society in 2012. On the other
hand, despite the fact that the Consumer Protection Act and other pieces of
legislation contain provisions to counter misleading marketing, the survey discovered that there
are still cases in which complaints are made. Delays in verdict determination,
ineffectiveness of legal and regulatory authorities, and the fact that
self-regulation does not supplant
statutory legislation are the primary
shortcomings. The amount
of time that passes between corrective actions and claims is excessive
and cannot be tolerated.
REMEDIES AVAILABLE AGAINST MISLEADING ADVERTISEMENTS
Manufacturers
and endorsers must be responsible for the claims made in their ads as mandated
by Section 21 of the Consumer Protection Act, 2019. The Act empowers the
Central Authority to investigate and halt misleading or false marketing,
showing lawmakers' quick reaction to needed enhancements in Consumer
Protection. Section 21(2) permits the Central Authority to levy fines between
10 to 50 lakh rupees for deceptive advertising and prohibits endorsements in
misleading commercials for 1-3 years. The consequences discourage celebrities
from endorsing deceptive claims in ads. Publishers might face fines of up to 10
lakh rupees for printing deceptive advertisements. Section 21 permits the
defense of an endorser if they have demonstrated 'reasonable diligence' in
verifying the claims made in the advertisement. Section 21, Clause 7 specifies
the basis for determining penalties, including characteristics such as
population, location, frequency, duration, and demographics impacted by the
advertisements. Section 21 Clause 8 highlights the democratic and natural
principle of ensuring citizens have a voice before any command is given,
thereby avoiding the Central Authority from being utilized as a tool of
tyranny..[6]
For the purpose of lodging complaints against
online e-commerce portals that disseminate deceptive advertisements, consumers
may approach the Advertising Standards Council of India (ASCI)[7].A
suo motu complaint from an ASCI Board member, a member of the Secretariat, or a
member of the Consumer Complaints Council is accepted by the council.
Complaints can be lodged by consumers, government officials, consumer groups,
and advertising against each other. Allegations of deceptive advertising in
India are addressed by the council.[8]
The procedure entails the Secretariat soliciting feedback from the advertiser
or agency, granting the advertiser a chance to convey their position, and
rendering a determination within a timeframe of four to six weeks. The
advertiser is notified within five days and is given two weeks to comply if the council
determines that the advertisement is deceptive,
misleading, or unsubstantiated. Important rulings by Indian courts regarding
misleading marketing are also mentioned here.
The
Kerala High Court ordered the maker of a hair growth lotion and the brand
endorser to compensate the complainant, for their false marketing that resulted
in dissatisfaction and harm to the complainant.
The Delhi High Court made certain
standards on the basis of misleading advertisements.
The following are:
Advertisements
are classified as commercial communication and fall under the scope of Article
19(1)(a) of the Constitution of India.
Advertisements must be accurate
and not be misleading in nature.
The Calcutta High Court ruled that a seller can claim that their goods are superior
to their competitor's, even if the claim is untrue. When making a statement, a seller can compare the benefits and drawbacks of
their products with those of competitors. However, they are not allowed to speak negatively about their competitors' products. If there is no defamation, the competitor cannot take
legal action for misleading advertising or disparagement.
Horlicks
Limited filed a lawsuit against Zydus Wellness Products to secure a permanent
injunction against their commercial claiming that one glass of Complan is equal
to two glasses of Horlicks. Horlicks initiated legal action in the High Court,
claiming that the advertisement was deceptive and damaging to its reputation.
Zydus claimed that the commercial was not deceptive because it contained
accurate information according to the correct serving size of both products. Horlicks
initiated legal action against Zydus for an advertisement in print media. The
High Court initially imposed a interim order
against Zydus to stop them from launching an advertisement.The injunction was lifted
when Zydus voluntarily made changes to the commercial by including a disclaimer
about serving size and agreed to only print the changed version
The
Supreme Court has issued a stringent ruling against Patanjali Ayurveda, a firm endorsing Baba Ramdev's
Ayurvedic products, for publishing misleading advertisements. Patanjali was
condemnedfor running commercials that explicitly attack allopathic medications.
Patanjali has been warned by the court for their deceptive advertising and faces a penalty of Rs 1 crore for each product
that contains false claims.
The court has mostly concentrated on dealing with false advertisements and has stated their wish
to steer clear of the "Allopathy v. Ayurveda" debate. The court found Patanjali's activities improper and imposed
a complete ban on any future
advertising or branding of Patanjali medicinal products till further notice.
Thus it is evident
that the Indian judiciary
has been playing
a pivotal role in curbing the issue of misleading
advertising.
CONCLUSION
Consumers have access to numerous adverts across several
platforms. Abundant misleading and inaccurate marketing have influenced customer behavior. They have
encountered numerous misleading or inaccurate statements regarding items and
services that were promoted. If consumers find that businesses are dishonest or
deceptive in their advertising, they are
likely to stop supporting the brands they are
loyal to. Misleading marketing alters customer behavior by prompting people to
distrust all forms of advertising. They are compelled to undergo an extensive
consumer purchasing procedure where they must authenticate information before
deciding whether to purchase the service or product.
Preserving ethical corporate practices and safeguarding
consumer interests are crucial in addressing this issue. Consumer protection
laws are crucial for ensuring that advertising practices
adhere to ethical
standards and truthfully represent product
attributes. The regulations aim to promote fair competition in the market and
empower customers to make informed decisions.
Consumer protection regulations must be rigorously
implemented, with harsh consequences for violations, to prevent deceptive
advertising. Companies are required to offer complete transparency regarding the advantages and constraints of
their products and adhere to rigorous standards for advertising assertions.
Misleading advertising requires a comprehensive
approach involving transparent advertising practices, robust consumer
protection laws, effective enforcement, and consumer education.
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Edwards, Erika. “Illinois County Sues e -Cigarette Maker Juul over
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[2]
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<www.ftc.gov/news-events/press-releases/2016/03/ftc-
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[4] Pizza
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19, 2000. 227 F.3d 489 (5th Cir. 2000)
[5]
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know’ (FolSol, 3 August 2023)
<https://www.foodlabelsolutions.com/info-centre/Packaged-Foods/decoding-food-labelling-claims-in-india-what-you-need-to-know/#:~:text=Nutrient%20content%20claims%20describe%20the,sodium%20than%20regular%20potato%20chips>
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[6] Mr.
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[7]
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contents of advertisements in India’ (Lexology, 12 November 2023)
<https://www.lexology.com/library/detail.aspx?g=73a717ea-48d7-43ca-8286-9b717a6a8a2f>
accessed 25 January 2024
[8]
Bhashwat Prakash, ‘’ (Legalservices India, 11 August 2022)
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[9] CC
No.345 of 2012
[10] 2010
SCC OnLine Del 391
[11] 1998
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[12] AIRONLINE
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Article Information
FALSE PROMISES, REAL HARM: SAFEGUARDING CONSUMERS IN THE FACE OF MISLEADING ADVERTISEMENTS AUTHORED
Authors: T.H. ALOK NARAYANAN, ANAGHA MOHAN
- Journal IJLRA
- ISSN 2582-6433
- Published 2024/04/18
- Issue 7
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
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