A Research Report Submitted to

FACULTY OF LAW

THE MAHARAJA SAYAJIRAO UNIVERSITY OF BARODA

In partial fulfilment of a degree of LL.M
2018-2019

‘A LEGAL STUDY ON MISLEADING

ADVERTISEMENT UNDER VARIOUS ACTS’

PRESENTED DR. Archana Gadekar Faculty of Law

BEFORE &

M. S. University

RESEARCH GUIDE Ruchi Tiwari Vadodara

SUBMITTED Roll No. 20

BY Happy Mundra LL.M Part 1

RESEARCHER (Business Law)

 DECLARATION

I, HAPPY .S. MUNDRA, a student of LLM-1, Faculty of Law, M.S University,

Baroda Declare that the presented subject “MISLEADING ADVERTISEMENT
UNDER VARIOUS ACT” has been written by me under the supervision and
guidance of DR. Archana Gadekar, Faculty of Law M.S University of Baroda for
the purpose of Award of LL.M-1. This study is record of bonafide work done by
me and this study has not been submitted to anywhere or also M.S University
of Baroda for the purpose of mention herein above, and has not been copied
from anywhere.

DATE:
PLACE: Happy.S.Mundra
 Acknowledgement

This Study is began as a part Fulfillment of the requirement of the LL.M -1

Degree in my interest.
It is my proud Privilege to express my gratitude towards Dr. Archana Gadekar
& Ruchi Tiwari Faculty of Law, M.s University of Baroda for her constant
guidance and encouragement throughout the study, without her consent I
would not have been able to complete this research work.
I acknowledge for suggesting present relevant topic and also providing
inspiration through the course of my study.
Over and above all, I could express my immense depth of gratitude, to my
father and mother for giving me love and understanding . I Can’t express my
thanks to my friends particularly who has been inspired me at various stages
during research work.
At last, I offer sincere gratitude to all others who have help me directly and
indirectly in accomplishing the study.

HAPPY.S.MUNDRA
 TABLE OF CONTENT

INDEX
1 Chapter 1 INTRODUCTION
• ORIGIN
• INTERDISCIPLINARY RELEVANCE
• REVIEW OF RESEARCH & DEVELOPMENT IN THE SUBJECT
• INTERNATIONAL STATUS
• NATIONAL STATUS
• SCOPE OF STUDY
• OBJECTIVE OF STUDY
• HYPOTHESIS OF STUDY
• METHODOLOGY OF STUDY
• LIMITATION OF STUDY
• MONTHWISE PLAN

2 History and Development

3 Legalisation and its aspects
4 Protection laws in india
5 Judicial precedent

6 Data Analysis

7 Conclusion and Suggestion

 CHAPTER1
INTRODUCTION
1.1 ORIGIN OF PROBLEM
Misleading Advertisement is an advertisement which is factually
incorrect or in a manner deceptive while conveying the information
about the product.
Misleading Advertisement can also be done in respect of
determining whether any advertisement is misleading through
ingredients of the product or by tag lines of the product such as
“boost is the secret of our energy.
The problem of such an ad is that the consequences are felt only
after the product is bought. Advertisements can be misleading if they
contain false statements of fact, conceal or leave out important
facts, include or imply a promise to do something without the
intention of carrying it out, or create a false impression, even if
everything stated may be literally true.
They also affect a consumer's economic behaviour and are likely to
injure a competitor’s product of the advertiser. Misleading
advertisements have a negative effect on society, directly or
indirectly hampering every member of its ecosystem.
Misleading advertisements can be classified into three main
approaches; fraudulent, false, and misleading .
Fraudulence means that the advertiser distorts the facts and
projects the product as something it is not.
Falsity could mean the advertiser lying based on parameters such as
price, quantity and availability.
Misleading via any media focuses on a consumer's belief.
Misleadingness requires the advertiser to observe the false belief of
consumers in relation to exposure to the advertisement. Misleading
deals with the distortion of facts.
False advertisement can be classified as deceptive if the
advertiser deliberately misleads the consumer, as opposed to
making an honest mistake.
• Make a false claim about the benefits or effect the drugs
which is likely to mislead the consumer.
• Misleading advertisement gives false impression to the
consumers and viewers regarding the true characters of
the drugs.
• Better protection to the trademark and for the
prevention of the use of fraudulent trademark on
merchandise which are likely to mislead or deceive the
recipient of the product.
INTERDISCIPLINARY RELEVANCE
•

• The study is related to legal and social issue of misleading ads.

• The study is also relevant to the disciple’s of social work.
• The aim of the study is to identify the need for a uniform regulatory
framework and suggest that same in future study.

International status

• United States
Federal Trade Commission(FTC)

• United Kingdom
Consumer Protection from Unfair Trading Regulations,2008

• Australia
Australian Competition & Consumer Act,2010

• New Zealand
Fair Trading Act, 1986

National status

• The Consumer protection Act,1986

• The Drugs and Cosmetics Act,1940
• The Code for Commercial Advertising Over All India
Radio
• The Competition Act ,2002
• The prevention of Food Adultration Act ,1954

REVIEW OF LITERATURE

The present research is an analytical study of the topic. For the same, the
researcher referred many articles for a better understanding and analysis on
the subject matter concerned. A summarized elicits of a few articles referred in
relation to the topic are given below:

Dr. Swati Sinha And Dr. Pradip Kumar das “FALSE AND MISLEADING
ADVERTISEMENTS AND PROTECTION OF THE CONSUMERS: INDIAN SCENARIO”,
International Journal of Law and Legal Jurisprudence Studies: ISSN: 2348-8212.
In this above article, author has discussed distinction between Advertisement
and misleading advertisement and also discuss the positive contribution on
consumers thought process and at same time how advertisement has immense
manipulative power and capacity to harm the consumer and capacity to harm
the consumer and the public interest. So overall this article discuss the positive
and negative impact of development of business of advertisement on
consumers and also suggest to rethink the regulatory measures in this regard,
and lastly highlighted the relevant social legal and economic aspect

Priyank singh, Vijay Thawani, Alok Saxena, “ORIGINAL ARTICLE: DECEPTIVE

FOOD ADVERTISEMENTS IN INDIA”, Indian Journal of basic and applied medical
Research; December 2013: Vol.-3, Issue-1, P.132-135 In this article, the author
has analyzed in detail, the responsibility of Food Safety and standard Authority
of India (FSSAI) for protecting and promoting public health.
Author tries to tell what should be the government roll In order to protect
consumer Interest. And also discuss some cases which of violation of section-
24 of Food safety and standards Act – 2006

SIGNIFICANCE OF STUDY
• The significance of the study is to figure out the impacts of
advertisement on the general public.
• To make awareness among the general public in regards to deceptive
products, advertise in media.

• To provide guidelines among the public so that they cannot be

influenced by the false advertisement.

OBJECTIVE OF STUDY
To understand the legal concept of misleading advertising or false advertising
or deceptive practice.
To test the effect of deceptive practice on general public.
To Know perception of people with reference to advertisement given on media
To Know whether the claim or promise is capable of fulfilment by typical
specimen of the product advertised.
To Analyse the negative impact of misleading advertisement.

Scope of the study

• The scope of the research will be limited to misleading advertisement in
foods, drugs and cosmetics sectors
• The scope of the study is to know the effect of unethical advertising,
misleading information or deception .

• To focus on the theological aspects of advertising ethics.

HYPOTHESIS
There are some advertisement which misleads customers
Misleading advertisement make adverse affect on general public
The promises which are given in the advertisement are not fulfilled
There are not an honest and truthful representation in advertisement
The punishment for the misleading advertisement under the consumer
protection act is implemented or not

LIMITATION OF THE STUDY

• The research is limited to Vadodara jurisdiction.

• The study is specifically limited to the rights of the consumers.
• The research will not interfere with the anonymity issues.
RESEARCH METHODOLOGY
Non Doctrinal Method
The reuired data was collected from the primary sources. The primary sources
was collected by direct interaction with the general public.The secondaty data
was collected from various reports, news, publications and aticles etc.

Sampling Study
The required data were collected by sampling methods, for questionnaire
survey systematic Random sampling was done.

Questionnaire Method
Questionnaire will be filled up by the general public

Month-wise plan
In the month of January – Prepared Questionnaire for the Research
In the month of February- Collection of data
In the month of march – Analysing data
Chapter 2
History & Development of misleading advertisement
Advertisement is done to reach out to the targeted market of a business in the
hope that it would lead into conversion and thereby increase revenue.
Misleading Advertisement is an advertisement which is factually incorrect or in
a manner deceptive while conveying the information about the product.
Misleading Advertising include: -
 Exaggeration of a product
 expressing unrealistic attributes of the product
 use of professional concepts for more effect
 fake license
 false warranties
 use of cinematic tricks and misleading images
 Discounts and gifts

Misleading advertisement is an advertisement if in any way, advertisement

deceives the persons to who is an addressed or whom it reaches, and after
seeing that advertisement by any chance customer buys that product and
effect on their economic behaviour, consider the injuries happens to the buyer
due to the promotion of advertisement called as deceptive/misleading
advertisement.
Deceptive advertising means the use of false or deceptive statements in
advertising. An advertisement which distorts reality and thereby results in
people buying products which they otherwise wouldn’t have.
What are ‘false’ and ‘misleading’ advertisements?

The law states that "no enterprise shall make or use false or misleading
representations or symbol as to price, quantity, quality, content, production
date, valid period, method of use, purpose of use, place of origin, manufacturer,
place of manufacturing, processor, or place of processing on goods or in
advertisements, or in any other way making known to the public."

The term "false" means any representation or symbol that is inconsistent with
facts, and where the deviation would be unacceptable to a significant number
of the general or relevant public, and would lead to misunderstanding or
incorrect decisions.
The term "misleading" means any representation or symbol that would cause a
significant number of the general or relevant public to misunderstand or make
incorrect decisions regardless of whether such representation or symbol is
consistent with facts.

When does an Advertisement become “Misleading”?

• When an edible oil advertisement gives you the impression that you are free
of heart problems so long as you are using that particular oil, then it is
misrepresenting facts.

• When an advertisement of a water purifier that filters only bacteria (and not
viruses) claims that it gives 100 percent safe water, then it is a false
statement.

• When a cell phone service provider promises STD calls for 40 paise per
minute, but omits to say that this rate is applicable only when calls are made
 to numbers serviced by the same provider, then it constitutes
misrepresentation.

When a manufacturer claims that the refrigerator marketed by him is the best
or that it keeps the food inside germ-free, that claim should be backed by
adequate data to substantiate the claim. Or else, it becomes a false
advertisement.

A Wider Canvas for Misrepresentation through

Advertisements

What is of utmost concern is that false and misleading advertisements now

have a wider canvas: while earlier, one saw them only in the print media, besides
other conventional media such as pamphlets and hoarding, today you can see
them on television, influencing a larger number of people and impacting even
the illiterate. Proliferation of advertisements through television marketing
networks promoting health cures and ‘beauty’ gadgets of unproven value is
another cause of great concern. More so because they reach even the remotest
corner of the country. And undoubtedly, the impact of the visuals on the
television screen is far greater than the newspapers. You can see on certain
television channels that beam such advertisements, magical cures for arthritis,
‘herbal chai’ for instant weight reduction, potions for hair growth and quick
remedies for diabetes. And many of those who see them are illiterate and tend
to have an unfailing belief in them.

Similarly, mass mobile text messaging is being used to convey false and
misleading messages, particularly about weight reduction potions and gadgets.
Many of them guarantee satisfaction- your money back if not satisfied, they say,
but do not respond to calls/ messages demanding a refund. Similar mass
marketing (viral marketing) is accomplished through e-mails- of particular
concern are get-rich-quick schemes and misleading health claims/magical cures
that are sent through electronic mail.

ESSENTIALS FOR AN ADVERTISEMENT TO BE DECEPTIVE

An advertisement is deceptive if: -
(1) It contains a misrepresentation, omission or practice that is likely to mislead
the consumer;
(2) The consumer is “acting reasonably under the circumstances”; and
(3) The misrepresentation, omission or practice is “material,” that is “likely to
affect the consumer’s conduct or decision with regard to a product or service.”

TWO CATEGORIES OF FALSE AND MISLEADING ADVERTISEMENTS

False advertisement can be categorised into two groups:
a) This consists of ads that violate consumers right to information and choice,
have the probability of causing financial losses and also mental agony.

b) This consists of ads which falsely claim health benefit and cures. These have
a more direct impact on their consumers which could result in loss of live or some
sort of physical or mental damage.

SELF-REGULATION: DOES IT WORK?

A voluntary body of all those involved in advertising, including advertisers,

advertising agencies and the media, ASCI has drawn up a comprehensive
advertising code for self-regulation. The four fundamental principles of the code
are:

1. To ensure the truthfulness and honesty of representations and claims made

by advertisements and to safeguard against misleading advertisements.

2. To ensure that advertisements are not offensive to generally accepted

standards of public decency.

3. To safeguard against the indiscriminate use of advertising for the promotion

of products which are regarded as hazardous to society or to individuals to a
degree or of a type which is unacceptable to society at large.

4. To ensure that advertisements observe fairness in competition so that the

consumer’s need to be informed on choices in the market place and the
cannons of generally accepted competitive behaviour in business are both
served.

If a consumer or even an industry, feels that an advertisement contravenes

the code or is of the view that an advertisement could be false or misleading, a
complaint can be sent to ASCI. In fact, ASCI’s advertisements exhort consumers
to complain, whenever they come across advertisements which they think is
false or misleading or unethical. “If an ad is wrong, we will set it right”; “If an ad
is misleading, we will set it right”, “If an ad is dishonest, we will set it right” says
ASCI in its advertisements issued at regular intervals
On receipt of a complaint, ASCI seeks the comments of the advertiser and
gives him two weeks to respond. And then places the response and the
complaint before the Consumer Complaints Cell

(CCC) of ASCI for their decision. If there is no response from the advertiser, CCC
can take an ex-parte decision. The CCC has 12 non-advertising professionals
(including consumer activists) and nine advertising practitioners from the
member firms. If, in the opinion of CCC, an advertisement violates ASCI’s code,
then the advertiser is asked to either withdraw the advertisement or modify it.
While ASCI members are bound to comply with the decision of CCC, in respect
of others, ASCI tries to persuade them and if necessary uses peer group
influence and pressure to achieve its objective.
 Section 5 of the Act prohibits advertisements of magic remedies for
treatment of certain diseases and disorders. Violation of the law attracts
imprisonment for six months or fine or both, for first conviction and for
subsequent conviction, imprisonment for a year or fine or both.

Earlier, AIDS/HIV was not in the Schedule of the Act. But subsequently, the
Union Ministry of Health included HIV/AIDS too in the schedule to the Rules.
What prompted this move was the Kerala High Court’s order in 2002, against
the manufacture, sale and promotion of the Ayurveda drug Immuno QR as a
sure cure for AIDS. In response to a public interest litigation, the Bombay High
Court had also restrained Mr Majid from making “tall and unfounded claims”
about the drug.1

The problem with the law is that it is quite outdated and is inadequate to
deal effectively with the problem as it exists today. Besides, the law would be
far more effective if it prescribed as penalty, corrective advertisements and
heavy financial penalties, instead of imprisonment or fine or both. The Act
prescribes imprisonment up to six months or fine or both for the first offence
and up to one year or fine or both for the subsequent offence. But even as it
exists today, it’s enforcement by the State drug control authorities- barring a
few exceptions- is poor because one sees any number of such advertisements,
promoting indigenous cures or medicines for a variety of ailments listed in the
Schedule of the Act.
.

.
CHAPTER 3
Legislation & Legal Aspects

In India statutory provisions for the regulation of misleading advertising are

contained in the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP
Act), and the Consumer Protection Act, 1986 (CPA). The regulatory measures
form is leading advertisement under the MRTP Act and the CP Act are similar to
a certain extent. Under both the enactments, the deceptive advertisement
amounts to unfair trade practice (UTP). Moreover, the regulatory measures
under the two major consumer protection legislations are applicable to goods
as well as services and to private as well as public undertakings. The statutory
provisions for the regulation of misleading advertisements of drugs and magic
remedies are contained indie Drugs and Magic Remedies (Objectionable
Advertisements) Act, 1954.

The relevant provisions of the Consumer Protection Act, 1986 in this context are
explained as herein under The Consumer Protection Act, 1986, applies to
advertisements for all products in the market place. A consumer may file a
complaint related to false and misleading advertisements, are included under
the definition of unfair trade practice. The Consumer Protection Act, 1986
mentions seven classes of unfair trade practices which are as below:
"Unfair trade practice" means a trade practices which, for the purpose of
promoting the sale, use or supply of any goods or for the provision of any
service, adopts any unfair method or unfair or deceptive practice including any
of the following practices, namely;-
(1) the practice of making any statement, whether orally or in writing or by
visible representation which,-
(i) falsely represents that the goods are of a particular standard, quality,
quantity, grade, composition, style or model;
 (ii) falsely represents that the services are of a particular standard, quality
or grade;
(iii) falsely represents any re-built, second-hand, renovated, reconditioned
or old goods as new goods;
(iv) represents that the goods or services have sponsorship, approval,
performance, characteristics, accessories, uses or benefits which such goods or
services do not have;
(v) represents that the seller or the supplier has a sponsorship or approval
or affiliation which such seller or supplier does not have;
(vi) makes a false or misleading representation concerning the need for, or
the usefulness of, any goods or services;
(vii) gives to the public any warranty or guarantee of the performance,
efficacy or length of life of a product or of any goods that is not based on an
adequate or proper test thereof: Provided that where a defense is raised to the
effect that such warranty or guarantee is based on adequate or proper test, the
burden of proof of such defense shall lie on the person raising such defense;
(viii) makes to the public a representation in a form that purports to be-
(a) a warranty or guarantee of a product or of any goods or services; or
(b) a promise to replace, maintain or repair an article or any part thereof or
to repeat or continue a service until it has achieved a specified result, -if such
purported warranty or guarantee or promise is materially misleading or if there
is no reasonable prospect that such warranty, guarantee or promise will be
carried out;
(ix) materially misleads the public concerning the price at which a product
or like products or goods or services, have been or are, ordinarily sold or
provided, and, for this purpose, a representation as to price shall be deemed to
refer to the price at which the product or goods or services has or have been
sold by sellers or provided by suppliers generally in the relevant market unless
it is clearly specified to be the price at which the product has been sold .
 REGULATORS

In addition to all the laws mentioned in the previous chapter, the regulatory
agencies established under different laws have also formulated rules,
regulations and advertisement codes to ensure that advertisers do not mislead
consumers through their publicity material, including advertisements.

Insurance Regulatory Development Authority

The IRDA (Insurance Advertisements and Disclosure)
Regulations, 2000
The Insurance Regulatory and Development Authority’s (IRDA) regulation on
advertisements lays down strict guidelines not only on the content of the
advertisements issued by insurers and their intermediaries, but also on their
compliance. Besides stipulating that all advertisements follow the code
formulated by ASCI, the regulation mandates that the advertisements related to
insurance policy should not in any way be unfair or misleading. And most
important, it also gives the regulator the power to direct issuance of corrective
advertisement in the same manner in which the original advertisement was
given.

The IRDA (Insurance Advertisements and Disclosure) Regulations, 2000

defines “unfair or misleading advertisement” as any advertisement (a) that fails
to clearly identify the product as insurance; (b) makes claims beyond the ability
of the policy to deliver or beyond the reasonable expectation of performance;
(c) describes benefits that do not match the policy provisions; (d) uses words or
phrases in a way which hides or minimizes the costs of the hazard insured
against or the risks inherent in the policy; omits to disclose or discloses
insufficiently, important exclusions, limitations and conditions of the contract;
gives information in a misleading way; illustrates future benefits on assumptions
which are not realistic nor realisable in the light of the insurer’s current
performance; where the benefits are not guaranteed, does not explicitly say so
as prominently as the benefits are stated or says so in a manner or form that it
could remain unnoticed; implies a group or other relationship like sponsorship,
affiliation or approval, that does not exist; makes unfair or incomplete
comparisons with products which are not comparable or disparages competitors
Telecom Regulatory Authority of India

TRAI Direction on Preventing Misleading Tariff

Advertisement, 2012
Through this Direction, TRAI mandated that advertisements published by
telecom access service providers should be transparent, non-misleading and
unambiguous; disclose all material information in unambiguous manner;
contain the website address and customer care number of the telecom access
service provider; and the ads issued in Indian languages contain all mandatory
disclosures in the same language. It also mandated that service providers report
compliance to the Authority on half-yearly basis.

A tariff ad is considered misleading if in any way it’s likely to induce the

consumer to a tariff plan which he would not have subscribed; contains an
untrue statement; omits a material fact having bearing on the subscriber’s
decision or fails to disclose attached limitations and restrictions, TRAI said.

Securities and Exchange Board of India

Chapter IX of the (Disclosure and Investor Protection) Guidelines, 2000 of
the Securities and Exchange Board of India (SEBI) provides specific guidelines on
advertisements.
An issue advertisement shall be truthful, fair and clear and shall not contain any
statement which is untrue or misleading.

Any advertisement reproducing or purporting to reproduce any information

contained in an offer document shall reproduce such information in full and
disclose all relevant facts and not be restricted to select extracts relating to that
item.

An issue advertisement shall be considered to be misleading, if it contains - a)

Statements made about the performance or activities of the company in the
absence of necessary explanatory or qualifying statements, which may give an
exaggerated picture of the performance or activities, than what it really is, b) An
inaccurate portrayal of past performance or its portrayal in a manner which
implies that past gains or income will be repeated in the future.
Reserve Bank of India

As a regulator and supervisor of the financial system, the Reserve Bank of

India too exercises its power to curb false and misleading advertisements by
various financial institutions. Chapter III B of the RBI Act deals with “Provisions
relating to non-banking institutions receiving deposits and financial
institutions”. Under this chapter 45J gives the Central Bank the power to
regulate and prohibit issue of prospectus or advertisement soliciting deposits of
money.

Section 45J- Bank to regulate or prohibit issue of prospectus or

advertisement soliciting deposits of money The bank may, if it considers
necessary in the public interest to do so, by general or special order (a) regulate
or prohibit the issue by any non banking institution of any prospectus or
advertisement soliciting deposits of money from the public; and (b) specify the
conditions subject to which any such prospectus or advertisement, if not
prohibited, may be issued.

How to Combat with misleading Advertisement:

Role of the consumers in reducing the instances of misleading advertising is
most important. Here the maxim “caveat emptor” applies which means let the
buyer be aware. Customers should take their time to compare product features
and prices before making a decision to purchase it.
• There is more than one choice per product in the marketplace, and it’s our
duty to determine which one will work best for our respective purposes. They
should not get tempted by the discounts and other deceptive offers.
• Whenever they come across an Advertisement which they consider
misleading or offensive, they should write to The Advertising Standards Council
of India.
• The ministry of consumer affairs, with the sole objective of empowering
consumers, has implemented a pioneering and intensive multimedia campaign,
“Jago Grahak Jago (Wake up Consumer)” to create consumer awareness in the
country.
 • Courts and Consumer tribunals have been playing an effective role in
imparting justice to the aggrieved parties. The consumers are advised not to
remain quiet if they happen to come across any injustice and approach the court
and tribunals for the redressal of their grievances

Regulatory agencies

Advertising Standards Council of India (ASCI)

A sense of a single comprehensive legislation had created a lot of confusion in
the advertising industry in globalization of their business. In 1985, a self
regulatory mechanism of ensuring ethical advertising practices was established
in the form of the Advertising Standard Council of India (ASCI), a non statutory
tribunal. ASCI entertained and disposed of complaints based on its code of
Advertising Practice (ASCI Code). Gradually, ASCI code received huge recognition
from the advertising industry. In August 2006, the ASCI Code was made
compulsory for TV advertisements by amending the Cable Television Networks
(Amendment) Rules, 2006.
According to Rule 7 of ASCI, advertisement should be non-discriminatory on the
ground of race, caste, etc. If any advertisement tends to incite people to crime,
cause disorder or one incident or vulgar then it should be stopped immediately
and for resolving the disputes relating to these matter Consumer Complaints
Council (CCC) was established.

Advertising Association of India (AAAI)

The Advertising Agencies Association of India (AAAI) is the official, national
organization of advertising agencies, formed to promote their interests so that
they continue to make an essential and ever-increasing contribution to the
nation, by working towards the following objectives:
 To benefit Indian consumers and to protect their interests by helping ensure
that advertising is honest and in good taste.
 To benefit Indian advertisers by promoting their sales, increasing their sales
and increasing productivity & profitability, to stimulate business and industrial
activity.
 To benefit media by establishing sound business practices between
advertisers and advertising agencies and each of the various media owners.
 To benefit the nation by harnessing advertising for the good of the country,
its institutions, its citizens to co-operate with the Government in promoting its
social objectives and in the task of nation-building.
 To question advertising that is wasteful and extravagant to make it possible
for the small entrepreneur to grow through advertising and to compete with the
biggest to encourage market and media research to serve society by meeting its
social responsibilities etc.
The AAAI today is truly representative, with a very large number of small,
medium and large-sized agencies as its members, who together account for
almost 80% of the advertising business placed in the country. It is thus
recognised at all forums - advertisers, media owners and associations, and even
Government - as the spokesperson for the advertising india

Press Council of India (PCI)

The Press Council of India was first set up in the year 1966 by the Parliament on
the recommendations of the First Press Commission with the object of
preserving the freedom of the press and of maintaining and improving the
standards of press in India. The present Council functions under the Press
Council Act 1978. It is a statutory, quasi judicial body which acts as a watchdog
of the press. It adjudicates the complaints against and by the press for violation
of ethics and for violation of the freedom of the press respectively. If one has
complaint against a newspaper, for any publication which he/she finds
objectionable and effects him/her personally, or non-publication of a material,
he should first take it up with the editor or other representative of the
publication concerned .If the complaint is not resolved to his/her satisfaction,
he/she may refer it to the Press Council of India. The complaint must be specific
and in writing and should be filed/lodged within two months of the publication
of impugned news item in case of dailies and weeklies and four months in all
other cases, along with the original/Photostat copy of the impugned clipping (
English translation if the matter is in vernacular ). He/she must state in what
manner the publication/non publication of the matter is objectionable within
the meaning of the Press Council Act, 1978 and enclose a copy of his/her letter
to the editor, pointing out why he/she considers the matter objectionable. His
reply thereto or published rejoinder, if any, may also be attached to it.
Declaration stating that the matter is not pending in any court of law is also
required to be filed. On receipt of a complaint made to it or otherwise, if the
Council is prima facie satisfied that the matter discloses sufficient ground for
inquiry, it issues show cause notice to the respondents and then considers the
matter through its Inquiry Committee on the basis of written and oral evidence
tendered before it.

Prasar Bharati
Prasar Bharat is a statutory autonomous body established under the Prasar
Bharati Act and came into existence on 23.11.1997. It is the Public Service
Broadcaster of the country. The objectives of public service broadcasting are
achieved in terms of Prasar Bharati Act through All India Radio and Doordarshan,
which earlier were working as media units i under the Ministry of I&B and since
the above said date became constituents of Prasar Bharati. The Prasar Bharati
Act provides for establishment of a Broadcasting Corporation, to be known as
Prasar Bharati, to define its composition, functions and powers. In the above
stated context few objectives for which corporation works are:
• Upholding the unity and integrity of the country and the values
enshrined in the Constitution.
• Safeguarding the citizen’s right to be informed freely, truthfully and
objectively on all matters of public interest, national or international, and
presenting a fair and balanced flow of information including contrasting
views without advocating any opinion or ideology of its own.
• Promoting social justice and combating exploitation, inequality and such
evils as untouchability and advancing the welfare of the weaker sections
of the society.
• Providing suitable programmes keeping in view the special needs of the
minorities and tribal communities.
• Taking special steps to protect the interests of children, the blind, the
aged, the handicapped and other vulnerable sections of the people.
Code for commercial advertising on Doordarshan
1. Advertising shall be so designed as to conform to the laws of the country and
should not offend morality, decency and religious susceptibilities of the people.
2. No Advertisement shall be permitted which –
(i) derides any race, caste, colour, creed and nationality;
(ii) is against any of the directive principles, or any other provision of the
Constitution of India;
(iii) tends to incite people to crime, cause disorder or violence, or breach of law
of glorifies violence or obscenity in any way;
(iv) presents criminality as desirable;
(v) adversely affects friendly relations with foreign States;
(vi) exploits the national emblem, or any part of the Constitution or the person
or personality of a national leader or State Dignitary;
(vii) relates to or promotes cigarettes and tobacco products, liquor, wines and
other intoxicants;
(viii) in its depiction of women violates the constitutional guarantees to all
citizens such as equality of status and opportunity and dignity of the individual.
In particular, no advertisement shall be permitted which projects a derogatory
image of women. Women must not be portrayed in a manner that emphasises
passive, submissive qualities and encourages them to play a subordinate,
secondary role in the family and society. The portrayal of men and women
should not encourage mutual disrespect. Advertiser shall ensure that the
portrayal of the female form is tasteful and aesthetic, and is within the well
established norms of good taste and decency.
3. No advertisement message shall in any way be presented as News.
4. No advertisement shall be permitted the objects whereof are wholly or
mainly of a religious or political nature; advertisements must not be directed
towards any religious or political end or have any relation to any industrial
dispute.
5. Advertisement for services concerned with the following shall not be
accepted.
(i) Unlicensed employment services; (ii) Sooth-Sayers etc, and those with claims
of hypnotism; (iii) Betting tips and guide books etc, relating to horse racing or
other games of chance.
6. Doordarshan accepts the advertisements of educational institutions/colleges.
However, it must be ensured that the institutions/colleges are genuine so as to
ensure that students do not get misled.
7. Doordarshan will also accept advertisements relating to holiday resorts and
hotels.
8. The items advertised shall not suffer from any defect or deficiency as
mentioned in Consumer Protection Act 1986
Chapter 4
PROTECTION LAWS IN INDIA

The Consumer Protection Act is the only law that gives the consumer, the
right to seek redress against such advertisements, including compensation for
any loss or injury caused as a result of such advertisements.
The law provides for redress against unfair trade practices and a false or
misleading advertisement becomes an unfair trade practice under the
provisions of the law.

Section 2 (1) (r) of the Consumer Protection Act gives a comprehensive

definition of unfair trade practice and Section 14 deals with the directions that
the court can give to deal with such practices and this includes directions to the
advertiser to discontinue such advertisements and not to repeat it. They can also
award compensation for any loss or suffering caused on account of such unfair
trade practice. They can also award punitive damages and costs of litigation. But
most important, they can direct the advertiser to issue corrective
advertisement.
Section 14 h (c) of the Act, describing the powers of the court, says that the
court can order “corrective advertisement to neutralize the effect of misleading
advertisement at the cost of the opposite party responsible for issuing such
misleading advertisement”. In so far as misleading advertisements are
concerned, this is the most important provision and can really prove to be a
deterrent. Unfortunately, this provision is not being used to effectively curb
misleading advertisements.
Regulation of Misleading Advertising under MRTP Act
Under the MRTP Act, misleading or deceptive advertising is sought to be
regulated by way of a 'cease and desist' order, or any other appropriate
direction, issued by the MRTP Commission. Before passing such an order, the
Commission is required to conduct an inquiry into the alleged misleading
advertisement. The MRTP Commission is empowered to initiate such an inquiry
on any one of the four bases (Section 36B):

• A complaint received from any consumer or any registered consumers'

association or any trade association.

• A reference received from the central government or any state government.

• An application received from the Director-General of Investigation and

Registration.1

• On its own knowledge or information.

For conducting an inquiry, the Commission enjoys certain powers of a civil court
such as summoning any witness and examining him on oath. The inquiry
proceedings before the MRTP Commission are deemed to be judicial
proceedings. Pending the completion of the inquiry, the Commission can issue
a temporary injunction against the advertisement alleged to be unfair or
deceptive, so that the erring party is restrained from carrying on the
objectionable practice (Section 12A of the MRTP Act). On completion of the
inquiry, if the Commission is of the opinion that the said advertisement is
prejudicial to the public interest or to the interest of any particular consumer or
to consumers in general, it can direct the party concerned to discontinue the

.
advertisement and not to repeat the same in future. Such an order is generally
referred to as a 'cease and desist' order.

The Commission can also direct the person concerned to publish a corrective
advertisement in the specified manner (Section 36D of the MRTP Act).
Furthermore, the Commission can award suitable compensation against any loss
or damage caused, to any person as a result of the impugned unfair
advertisement (Section 12Bof the MRTP Act).

Moreover, if there is an agreement relating to the impugned advertisement

between the advertiser and any other party such as the advertising agency,
media, etc., the Commission can declare the agreement as void or can direct the
parties concerned to modify or terminate

Besides the above -mentioned statutory action, the company indulging in

misleading advertising also gets adverse media publicity as the orders passed by
the Commission are often reported ; in newspapers and other media.

The order passed by the Commission is a mandatory order, enforceable like a

court order or decree. It can be appealed to only before the Supreme Court of
India, on specified grounds.

(Section 55 of the MRTP Act). Non-compliance with the Commissioner's order

amounts to an offence, punishable with imprisonment and/or fine (Section 48C
of the MRTP Act).

Since the incorporation of the provisions of regulation of unfair trade practices

on August 1, 1984, the MRTP Commission has taken decisions on 1500 cases of
false and deceptive advertisements. In a majority of these cases; the
Commission took a serious view of such practices and either passed a 'cease and
desist' order or accepted an undertaking from the respondents under section
36D(2) of the MRTP Act that the impugned unfair advertising practice would be
discontinued and would not be repeated in future. Despite legal action provided
against unscrupulous advertisers, there is no respite from the spate of
misleading and deceptive advertisements in the mass media.

Regulation of Advertising under Consumer Protection Act,

1986

Although the definition of Unfair Trade Practice given in the Consumer

Protection Act (CPA) is the same as the one used in the MRTP Act, the
mechanism for its regulation under the CPA is substantially different. The
regulatory provisions of the CPA are to be enforced through the redressed of
grievance by a three-tier, quasi-judicial machinery, set up at the district, state
and the national levels, known as the District Consumer Disputes Redressal
Forum, the State Consumer Dispute Redressal Commission, and the National
Consumer Disputes Redressal Commission, respectively. There are nearly 500
district forums (one in each of the districts) and32 State Commissions (one in
each of the states and union territories) in the country, besides the National
Commission set up at New Delhi.

A complaint against any unfair trade practice (which includes misleading or

deceptive advertising) as well as defective goods, deficiency in service, charging
of excessive prices, and offering of unsafe products for sale can be filed before
the appropriate consumer court by any consumer or a recognized consumers'
association or the Central Government or the State Government [Section 2(1)
(b) of the CPA].

Consumer courts enjoy the powers of a civil court for purposes of hearing the
cases filed before them [Section 13(3) of the CPA]. They are required to follow a
simple procedure for the disposal of cases without adhering to technical rules of
evidence. These are meant to provide speedy relief to the aggrieved persons.

In the case of a UTP, a consumer court can pass a 'cease and desist' order against
the erring party, award a suitable compensation to the aggrieved person, and
order the payment of costs incurred by the winning party in pursuing the case
(Section 14 of the CPA).

Thousands of complaints are received and adjudicated upon by these consumer

courts every month. The majority of the cases pertain either to a deficiency in a
service or defective goods encountered by consumers. The number of cases
pertaining to unfair trade practices arising out of misleading and deceptive
advertising is negligible.
Chapter 5

Judicial Precedent
Advertising law will protect consumers from deceptive advertising through the
enforcement of specific legislation. Advertising law and consumer law have
basically the same function: to promote truth in labelling.” Truth in labeling
means that all pertinent information that a consumer should reasonably be
aware of should be printed on the label of the product. This will ensure that
consumers are protected, and know exactly what they are buying. This limits the
level of manipulation by manufacturers and advertisers

In Colgate-Palmolive (India) Limited vs. Anchor Health & Beauty Care Private
Ltd, the issue involved was whether a person can be injuncted from making any
false, misleading or disparaging representations or from making any slanderous
statements in showing, screening, exhibiting or telecasting
commercial/advertisements with respect to products of any other person.
Colgate-Palmolive approached the court aggrieved by the use of the words
“ONLY” and “FIRST” in the advertisement of the Anchor Health. The objection
regarding the advertisement was the claim by Anchor that their’s was the
“ONLY” toothpaste containing all the 3 ingredients, calcium, Fluoride, Triclosan.
The Second objection was the use of the word “FIRST” all round protection
toothpaste. The applicants contented that even their products contained all
these products. The claims made by Anchor were contented to be misleading
.The court after detailed analysis of various case laws and provisions came to
the final conclusion that the reasons behind the use of the words “ONLY” and
“FIRST” were not satisfactory. The advertisement usually gives out an
impression that Anchor is the only toothpaste containing all the three
ingredients. Similarly, the use of word “FIRST” is not in relation to the slogan “all
round protection” as it is indented to project. The respondent has to bring out a
scientific base for such claims and thus, the words “ONLY” and “FIRST” fall under
the dragnets of Section 2(1) (r) of the Unfair Trade Practices contained in The
Consumer Protection Act, 1986 and could create an impression in the minds of
the consumer that Anchor is the best toothpaste in the market . In this light,
Anchor was restrained from using the offending words in the advertisement

Consumer Protection Role of the consumers in reducing the instances of

misleading advertising is most important. The consumers are expected not to
remain gullible.
Customers should take their time to compare product features and prices
before making a decision to purchase it. Generally, there is more than one
choice per product in the marketplace, and it’s our duty to determine which
one will work best for our respective purposes.
They should not get tempted by the discounts and other deceptive offers.
Whenever they come across an Advertisement which they consider misleading
or offensive, they should write to The Advertising Standards Council of India.
ASCI promises them that even a single complaint alleging that an
advertisement is misleading or offensive is usually enough to require the
Advertiser to correct the Advertisement.
Further,the ministry of consumer affairs, with the sole objective of
empowering consumers, has implemented a pioneering and intensive
multimedia campaign, “Jago Grahak Jago (Wake up Consumer)” to create
consumer awareness in the country. The problem of misleading ads continues
to be serious in the country despite several legislations like the Food Safety
and Standards Act, Consumer Protection Act and the Drugs and Cosmetic Act.
Therefore, need for a single codified legislation empowered to regulate all
types of misleading advertising is an important need of the hour. Concerned
over the advertisements that are misleading, the government of India is
mulling the idea to create an effective law to stop companies from giving such
advertisements. Revival of the MRTP commission with the sole purpose of
preventing false and misleading advertisements can prove to be another
landmark step. Further, as clear from the precedents that courts and consumer
tribunals have been playing an effective role in imparting justice to the
aggrieved parties. The consumers are advised not to remain quiet if they
happen to come across any injustice and approach the court and tribunals for
the redressal of their grievance

CASES

LISTERINE AS A CURE ALL

Listerine was the first over-the counter mouthwash sold in the United States in
1914 and by 1921 it was already falsely marketing its product. Declaring itself a
cure-all for common cold ailments like sore throats and coughs, a dandruff
preventative, an anti-shave tonic, and a safe way to protect yourself from cuts,
bruises, wounds, and stings, Listerine was slapped with numerous false
advertisement lawsuits. In 1975, the Federal Trade Commission ordered the
company to spend $10 million in corrective advertising, seeing as their product
was no more effective in treating colds than gargling warm water. Even then,
the mouthwash giant did not really learn their lesson. In 2005, the company was
slapped with another lawsuit. This time because Listerine claimed it was as
"effective as floss" after rigging clinical trials.

LYDIA PICKHAM'S VEGETABLE COMPOUND

Touted as one of the world's first successful businesswomen, Lydia Pick Ham
exploited her reputation as a local medicine woman to propel her herbal remedy
into a commercial success, eventually grossing almost $400,000 yearly. The
remedy claimed to cure all womanly ailments and weaknesses and sold for $1 a
bottle. What was in the herbal remedy? Turns out, it contained less than 1%
solid substance from vegetable extracts and almost 20% alcohol. If a woman
took the suggested 1 tablespoon, every 2-4 hours, she will have consumed 5
ounces of 13.5% or higher alcohol by the end of the day- more than enough for
a healthy buzz that made life seem a bit more cheery to boozy housewives.
When the Federal Trade Commission tightened its laws on claims made by
medicines, Lydia Pick Ham’s Vegetable Compound had to swallow the
restrictions with a spoonful of sugar.

ENFAMIL LIPIL-“Clinically proven to improve brain and eye

development”

Moms are always looking for to the best healthy foods and supplements to their
babies. When it comes to produce the best ever baby supplement Enfamil got
into trouble by claiming in 2004 that “Enfamil is clinically proven to improve
brain and eye development” and that the other baby formulas were inferior to
this brand. That is a huge claim! Taking into consideration we are talking about
babies. Mead Johnson in the end was fold guilty and had to pay $10 million to
another baby formula PBM, for aggressive advertising resulting loss of profit.

AIRBORNE GETS A FLUNKING GRADE

"It's the one designed by the school teacher!" Airborne, which entered the
market 10 years ago first claimed to prevent colds, then claimed to boost your
immune system, and is now claiming a federal lawsuit. In March of this year,
Airborne settled a lawsuit in which it agreed to pay over $23 million in fines for
false advertising. David Scheldt, who spearheaded the lawsuit against Airborne
says there is no factual evidence to back the company’s claims, amounting
Airborne to a placebo and advising people fighting colds to simply take a Vitamin
C pill.

Federal Trade Commission v. Reebok International Ltd. (N.D.

Ohio)

There is no question that the Federal Trade Commission (FTC) has been more
active in challenging deceptive advertising under the current administration.
While it has been said that most of the FTC’s resources are devoted to the pursuit
of disreputable fraudsters in industries such as nutritional supplements and weight
loss programs, the Reebok case is an example of FTC litigation against a highly
reputable advertiser.

Among Reebok’s products were ‘Easy Tone’ and ‘Run Tone’ shoes, which were
advertised to have various muscle toning and strengthening benefits. For
example, Easy Tone shoes were “proven” to “work your hamstrings and calves
up to 11% harder” and “tone up to 28% more than regular sneakers. Just by
walking.”

The FTC alleged that these and similar claims, made in provocative
advertisements portraying well-toned, sometimes scantily clad women, were
unsubstantiated by reliable scientific testing. Faced with the FTC lawsuit, Reebok
entered into a settlement which, according to the FTC website, included a
$25,000,000 refund and strong injunction provisions. The upshot of this
litigation is that major, reputable advertisers are not immune from FTC lawsuits
for advertising claims that the FTC believes are unsubstantiated and materially
deceptive to consumers.
 Chapter 6
DATA ANALYSIS
This chapter includes the observation which I observed at the time of my field
work. As my topic is misleading advertisement under various act . I tried my
level best to know about the public opinion regarding the misleading
advertisement and how it affects the consumer behaviour respectively.

First of all, the gender of the participants can be useful for further analysis. Men
and women can have different way of thinking, or behaviour. As we can observe,
there is a high rate of participation from male with a score of 80.5% whereas
only 19.5% of Female answered
This graph represents the three categories of age that we decided to choose.
For our study, these categories were relevant because it is believed that
consumers differ in their behaviour and way of thinking depending on their age;
and today almost everyone is affected by misleading advertising..
Since we can observe on the graphic, the major rate of our respondents was
56.6% belonging to the first category “18-25 years old”; it’s normal because we
have chosen to spread our questionnaire first of all on social media. The next
category of age is the one concerning people from 26 to 35, with 30.1% of the
respondents . The last category affected people from 35 and more, with 13.3%
 This graph represents the four categories of employment that the people are
employed. For our study, these categories were relevant because it is believed
that consumers differ in their behaviour and way of thinking depend on their
employment status; and today almost everyone is affected by misleading
advertising. 57.5 % people represents the private sector employees. 18.6%
people shows that they are engaged in business. 17.7% people shows that they
are engaged as a student.

This graph shows majority number of person watch advertisement through

various media like social media, T.v, Radio etc. The majority of people consist
of 87.6% watch advertisement. 8 % people do not watch advertisement.

This chart represents what kind of advertising is the most suggestible for the
participants. They have the choice between two categories of advertising. It
allowed us to notice that on average people think that the most suggestible is
“TV advertisement” with 57.5% , a bit more than the half of the participants
are agree with this. Then, the percentages are very low for the other types of
advertising; the next one is “Magazines and Newspaper” with a rate of 42.5%
respectively.

This chart depicts the opinion of the people, more precisely if they get
information or not by advertising and what they think compare
to the others. We can observe that 77% of the respondents get the
information such as the other people; whereas 16.8% of the respondents are
persuade that they get less information than others .
 This graph shows that Is Advertising helpful to people or not?. The
majority of the people ie., 50.4% thinks that advertising is helpful for
them. The 40.7% people thinks that advertising is helpful for them
sometimes. Whereas 8.8 % persons thinks that advertising is not
helpful for them.

Majority of people thinks that information given in the advertisement

is convenient but many a times people think that it is inconvenient so
sometimes people get confused. 40.7% people thinks that
advertisement is sometimes convenient and sometimes not.38.9%
people thinks that advertisement is convenient and right and 20.4%
thinks that advertisement are misleading.
Majority people attracts from the advertisement as they don’t read the terms
and conditions which are shown at the bottom of the advertisement and goes
on outer look of the product so there are 57.5% people saying that the
advertisements are informative and force them to buy the product and some
people 18.7% buy the experienced company product without seeing
advertisements

There are many advertisements in which the product is shown different and
when we buy that product it is much different in portion and colour which did
not satisfy the consumer , So 69% thinks they are satisfied by product that are
shown in advertisements and reality and 31% seems completely different
product in advertisements than in reality
The advertisements are attractive. so many of the people buy a bunch of things
together in offer so that there is much things in house which we don’t need i.e
why 73.5% says yes and others 20.4% says no.

Repetition of everything attracts people in advertisement so many people are

convinced to buy product as the product advertisement is repeated i.e why
47.8% people say yes and 18.6% says no but some 33.6% are confused .
Sometimes people thinks there is free offer in the product but many of the
people thinks that hidden cost is included in M.R.P
The manufacturer increases M.R.P up to some extent so people think that the
product is truly free of charge.63.7% people thinks that the offer charges
money which is a hidden cost in M.R.P. 9.7% People does not think that the
offer charges moneys which is hidden cost in M.R.P

The above graph shows the consumer perception about the advertisement.
62.8% people thinks that advertising are deceptive. 34.5% people thinks that
advertising are not deceptive.
 The above mentioned pie chart shows the types of misleading
advertisement.48.7% people think that the comparative advertisement,
Different advertisement than product and stereotype advertisement is
misleading advertisement. 24.8% people think that the product is advertised
different from actual. 15.4 % people think that the comparative product is
considered as misleading advertisement. 10.6% people think that stereotype
advertisement is misleading advertisement.

13. What happens if you come across a misleading

advertisement.

Report to federal agency Report to city trade commission

Report to Better Business Bureau Any one of the above

There are many situations in which we come across a misleading

advertisement and we report it to many places so most of the people
thinks that reporting to better business bureau is good 41% and others
think of city trade
 commission 29%.

From the above mentioned graph , we can analyse that 64.6 % people are
aware about the punishment been given for a misleading advertisement.
13.3% people are not aware about the punishment that is given for a
misleading advertisement.

This pie chart shows the people opinion about punishment given to the
following due to misleading advertisement.31% people think that Volkswagen
got the punishment and 27.4% thinks that listerine got the punishment for the
misleading advertisement. 23.9% thinks that Redbull got the punishment for
the misleading advertisement.

The above graph shows the punishment of the misleading advertisement.

46.9% people thinks that fine or imprisonment upto 2 years is the punishment
for the misleading advertisement.
18.6% people thinks that the punishment of misleading advertisement is fine
only.29.2% people thinks that the punishment for the misleading
advertisement is fine and imprisonment for 2 years only.
 Chapter -7
Conclusion & Suggestion
Conclusion

When consumers are exposed to advertisements on different types of media,

purchase behaviour of the consumers gets influenced.

The markets in which first-time purchases are rare, advertising helps either
switching or retaining customers who otherwise might switch.

A consumer’s behaviour is distinctly related to personal characteristics of self-

control and impulsivity.

An impulse purchase of products that is bought spontaneously without

premeditation or planning may result in deception.

It was revealed in this study that the consumers purchase trendy products
promoted in an advertisement even though they are not of much use for them.

The consumers generally buy things without thinking rationally when they see
some celebrity using them in an advertisement

There are laws against the misleading advertisements, but marketers will always
find a way out.

If false advertisements are not properly checked and prevented these may
endanger and mislead our right to choice and freedom of buying commodities.
Suggestions
On the basis of above conclusions following suggestions can be given:

The advertiser should not promote products which are hazardous or harmful to
the society or individuals and observe fairness in competition keeping in mind
consumer’s interests.

The person should analyse the advertisement and then take decision about it.

There should be strict penal provisions regarding to the misleading advertisement

Primary demand, buying motives, hidden qualities, differential advantage and

money in every marketing situation, must be analyzed carefully to determine
the advertise ability of a product.

Law enforcing agencies should not be apathetic and insensitive to implement

the existing legal provisions for the protection of consumers.

The steps should be taken to make aware the common consumers by the
government as well as NGOs.