Advertising Law

Advertising Law
• Advertising laws are aimed at protecting
consumers by requiring advertisers to be
truthful about their products and to be able to
substantiate their claims.
• All businesses must comply with advertising
and marketing laws, and failure to do so could
result in costly lawsuits and civil penalties.
 Advertising Law
• So before you start an advertising campaign,
it's important you understand some basic
rules.
– Advertising must be truthful and non-deceptive
– Advertisers must have evidence to back up their
claims
– Advertisements cannot be unfair
In order to enforce an ethical regulating
code, the Advertising Standards Council
of India was set up.
 ASCI Guidelines
• To ensure the truthfulness and honesty of representations and
claims made by advertisements and to safe guard against
misleading advertising
• To ensure that advertisement are not offensive to generally
accepted standards of public decency
• To safeguard against indiscriminate use of advertising for
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
• To ensure that advertisements observe fairness in competition so
that the consumers need to be informed on choices in the market
places and canons of generally accepted competitive behaviour in
business are both served.
 ASCI
• Advertising Standards Council of India is a self
regulatory voluntary organization of the
advertising industry.
 Role & Function
• The Role and Functioning of the ASCI & its CCC
(Consumer Complaints Council) in dealing
with complaints received from consumers and
Industry, against advertisements which are
considered as:
– False, Misleading, Indecent, Illegal, leading to
Unsafe practices, or Unfair to competition, and
consequently in contravention of the ASCI Code
for Self-Regulation in Advertising.
 Comparative Advtg Law
In this backdrop, the Delhi High Court
summarized the law on the subject in the case
of Reckitt & Colman v. Kiwi TTK , as follows:
• A tradesman is entitled to declare his goods to
be the best in the world, even though the
declaration is untrue.
• He can also say that his goods are better than
his competitor’s, even though such statement
is untrue.
 CA Law
• For the purpose of saying that his goods are the
best in the world or his goods are better than his
competitor’s he can even compare the
advantages of his goods over the goods of others.
• He, however, cannot while saying his goods are
better than his competitors', say that his
competitors' goods are bad. If he says so, he
really slanders the goods of his competitors. In
other words he defames his competitors and
their goods, which is not permissible.
 CA Law
• If there is no defamation to the goods or to
the manufacturer of such goods no action lies,
but if there is such defamation an action lies
and if an action lies for recovery of damages
for defamation, then the Court is also
competent to grant an order of injunction
restraining repetition of such defamation.
 Concept of Disparagement
• Section 36 A of the MRTP Act purports that
unfair trade practices are those which lead to
disparagement of the goods, services or trade
of another person.
• The term “disparagement” has not been
defined in any statute, but judicial
pronouncements have adopted its dictionary
meaning.
 Concept of Disparagement
• As per The New International Webster’s'
Comprehensive Dictionary, disparagement
means, to speak of slightingly, undervalue, to
bring discredit or dishonor upon, the act of
depreciating, derogation, a condition of low
estimation or valuation, a reproach, disgrace,
an unjust classing or comparison with that
which is of less worth, and degradation
 CA Law

• In another case, the Supreme Court was of the

view, that in a democratic economy, free flow of
commercial information is indispensable and
advertisement is a facet of “commercial speech”
as public at large is benefited by the information
made available through the advertisement.
• Thus, “commercial speech” is a part of Freedom
of Speech and Expression guaranteed under
Article 19 (1) (a) of the Indian Constitution.
 CA Law
• To decide the question of disparagement of another’s
goods, the manner of commercial is important.
• Unfair trade practice can be ascertained only in the
presence of false or misleading facts through scientific
or technical assessment of the claims. It is not
actionable if the manner is only to show one’s product
better or best without derogating the competitor’s
product.
• Thus, Courts have taken the position that “publicity
and advertisement of one’s product with a view to
boosting sales is a legitimate market strategy.”
 Advertising Agencies
• Sellers are responsible for claims they make
about their products and services.
• Third parties - such as advertising agencies or
website designers and catalog marketers - also
may be liable for making or disseminating
deceptive representations if they participate in
the preparation or distribution of the
advertising, or know about the deceptive
claims.
 Advertising Agencies
• Advertising agencies or website designers are
responsible for reviewing the information
used to substantiate ad claims.
• They may not simply rely on an advertiser's
assurance that the claims are substantiated.
Surrogate Advertising is a new
weapon of Proxy War.
 ASCI Code

On surrogate advertising
 ASCI Code
• Section 6 of the said code states: ‘Advertisements for
products whose advertising is prohibited or
restricted by law or by this code must not circumvent
such restrictions by purporting to be advertisements
for other products the advertising of which is not
prohibited or restricted by law or by this code. In
judging whether or not any particular advertisement
is an indirect advertisement for product whose
advertising is restricted or prohibited, due attention
shall be paid to the following:
 ASCI Code
(a) Visual content of the advertisement must depict
only the product being advertised and not the
prohibited or restricted product in any form or
manner.
(b) The advertisement must not make any direct or
indirect reference to the prohibited or restricted
products.
(c) The advertisement must not create any nuances
or phrases promoting prohibited products.’
Interpretation of the ASCI Code
 Interpretation
It specifically prohibits surrogate advertising and
lays down guidelines which qualifies it to be so,
Namely:
– Whether the legal product under a tobacco brand,
sought to be advertised, has been produced in
reasonable quantities or not.
– Whether in the disputed advertisement, there are any
direct/indirect clues to the promotion of the restricted
product i.e. tobacco or not.
 The Prohibition of Publication or
Telecast of Vulgar, Obscene and
Surrogate Advertisements and Re-
mix songs by Print and Electronic
Media Bill, 2004
 Print and Electronic Media Bill, 2004
• The bill hasn’t yet seen the light of the day
• For the first time, a legal definition of
‘surrogate advertisements’ has been
attempted through Section 2(d), which states:
‘an advertisement which shows a substitute
product in the guise of the real one which
otherwise cannot be legally advertised
through the print and electronic media.’
 Print and Electronic Media Bill, 2004
• Section 3 prohibits the publication by print
media and telecasting of surrogate
advertisements and provides that violators of
the said provisions shall be punished
accordingly.
"Let's gear our advertising to sell goods,
but let's recognize also that advertising
has a broad social responsibility."
- Leo Burnett
Advertising Law

31st March 2010, Wednesday

 ASCI Code
• The Code for Self-Regulation has been
– drawn up by people in professions and industries in or
connected with advertising,
– in consultation with representatives of people affected by
advertising
– and has been accepted by individuals, corporate bodies
and associations engaged in or otherwise concerned with
the practice of advertising
– with the following as basic guidelines with a view to
achieve the acceptance of fair advertising practices in the
best interests of the ultimate consumer:
 ASCI Code
• To ensure the truthfulness and honesty of
representations and claims made by
advertisements and to safeguard against
misleading advertisements. 
 ASCI Code
• To ensure that advertisements are not
offensive to generally accepted standards of
public decency.  Advertisements should
contain nothing indecent, vulgar or repulsive
which is likely, in the light of generally
prevailing standards of decency and propriety,
to cause grave or widespread offence.
 ASCI Code
• To safeguard against the indiscriminate use
of Advertising in situations or of the
promotion of products which are regarded as
hazardous or harmful to society or to
individuals, particularly minors, to a degree or
of a type which is unacceptable to society at
large.
 ASCI Code
• 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
canons of generally accepted competitive behaviour
in business are both served.  Both the general public
and an advertiser’s competitors have an equal right
to expect the content of advertisements to be
presented fairly, intelligibly and responsibly. 
The Code applies to advertisers,
advertising agencies and media.
This is a self-imposed discipline required
under this Code for Self-Regulation in
Advertising…
… from all involved in the
commissioning, creation, placement
or publishing of advertisements.
 ASCI Code
This Code applies to advertisements read, heard
or viewed in India even if they originate or are
published abroad so long as they are directed to
consumers in India or are exposed to significant
number of consumers in India.
Trademark Infringement
• Trademark infringement can arise if a website
uses registered trademarks of third parties
without consent, unless the trademark is
being used honestly and simply for the
purpose of identification and is not bringing
the mark into disrepute.
• The Trademarks Act, 1999 has introduced some wide-
ranging changes to Indian trademark law
• It has essentially made it possible to apply for
registration of any mark capable of graphical
representation.
• This is in addition to the obvious word marks and
logos, advertising straplines, slogans and shapes.
Even if a mark is not registered there may still be
liability for any use of a well known mark under the
1999 Act.
 10 Things To Do

So your Ad comply with advertising law

• Substantiate your advertising claims
• Make Sure Your Advertising Claims Aren't
‘Deceptive’.
• Make Sure Your Advertising Claims Aren't ‘Unfair’.
• Be Sure Your Advertising Claims Measure Up to the
"Truth and Accuracy" Standard
• Make Sure Your Comparative Advertising Claims Are
Fully Substantiated and Are Not False or Deceptive
• You Should Be Familiar With the Advertising Law of the
States
• Are You Aware of Advertising Law Developments on
New Media as the Internet?
• Do You Advertise to Children or Will Your Advertising
Reach Substantial Numbers of Children?
• What Are the Global Advertising Legal Compliance
Issues Facing Your Ads?
• You've Scrutinized Your Ads for What They Expressly
Claim--What About Implied Claims?
Advertising directed to children
 Children as targets of Advertisements
• Children in India constitute 18.7% of the World's kids
population and one-third of India's population is
under 15 years of age.
• A survey by A.C.Nielsen UTV's research partner
showed that an average child watches TV for about 3
hours on week days and 3.7 hours on weekends.
• About half of this time is spent watching the
advertisements which can effect the behaviour of
the child.
• Advertising directed to children or advertising which
has been created with the participation of children shall
not threaten the rights or interests of children and in its
creation, regard shall be had to the perception and
psyche of children.
• Exploiting the natural credulity or lack of experience of
children in advertising is prohibited
• Exploiting children in alcoholic beverage and tobacco
product advertising, and aiming alcoholic beverage and
tobacco product advertising at children, are prohibited.
Need for Advertising Code in India
Legal actions can be taken against advertisements that:
• Ridicule caste, race, nationality, colour and creed
• Goes against any provision of the Indian Constitution
• Incite people towards criminal activity, provocative,
cause disorder and/or violence in the country
• Breach laws and/or glorify obscenity or violence in
any form
• Glorify terrorism, communal massacres, criminality
and so on
• Ridicule the father of the nation, the national emblem,
part of Constitution or the image of a national leader
or a state dignitary
• Depict women in a deprecating manner. Females
should not be portrayed in a manner that is obscene,
exploitative or vulgar.
• Display distasteful visual content that goes beyond the
established norms of good taste and decency.
• Exploit and encourage  social evils like child marriage,
bride burning and dowry system.
 Current Scenario

Food & Beverage Advertisements

 Food & Beverage Advertisements
• The Food Safety and Standards Authority of India is
working on a code that aims to stop false and misleading
advertisements on food and beverages, a top official said.
• The draft rules say that advertising and communication in
the food and beverages sect
• The advertisements should not encourage excessive
consumption or inappropriately large portions of any
particular food and not exploit consumers’ lack of
experience or knowledge. or should not be misleading or
deceptive.
 Food & Beverage Advertisements
• The code also points out that the advertisements
should not undermine the role of parental care
and guidance when children make food choices.
• It discourages the portrayal of products as
substitutes for meals, and endorsements by
government agencies, professional bodies,
independent agencies or individuals in a
particular profession without their prior consent.
• The food standards agency, an arm of the
ministry of health and family welfare, was
established under Food Safety and Standards
Act, 2006, to lay down standards for food
articles and regulate their manufacture,
storage, distribution, sale and import.
• The 2006 Act under which the authority was
constituted prescribes penalties up to Rs10
lakh for publishing misleading advertisements
and selling misbranded food.
• However, it is yet to be implemented.
Code for Advertising

On All India Radio

 General Rules of Conduct
• Advertising shall be designed as to confirm to the laws
of the country and should not offend against morality,
decency and religious susceptibilities of the people.
• No advertisements message shall in any way be
presented as News
• No advertisements shall be permitted the objects
whereof are wholly or mainly of a religious or political
natures; advertisement must not be directed towards
any religious or political end or have relation to any
industrial dispute.
 General Rules of Conduct
• No advertisement shall contain the words Guarantee
or Guaranteed etc., unless the full terms of the
guanrantee are available for inspection by the
Directorate General, All India Radio
• Advertisers or the agents must be prepared to
produce evidence to substantiate any claims or
illustrations
• The items advertised shall not suffer from any defect
or deficiency as mentioned in Consumer Protection
Act 1986.
 General Rules of Conduct
• No advertisement shall contain reference which are
likely to lead the public to infer that the product
advertised or any advertised or any of its ingredients
has some special or miraculous or super-natural
property or quality, which is difficult of being proved,
e.g. cure for baldness, skin whitener, etc.
• Advertisements shall not contain disparaging of
derogatory references to another product or service.
• Testimonials must be genuine and used in a manner
not to mislead the listeners.
 General Rules of Conduct
• Information to consumers on matters of
weight, quality or prices of products where
given shall be accurate.
• Advertisements indicating price comparisons
or reductions must comply with relevant laws.
• Any such effects which might startle the
listening public must not be incorporated in
advertisements like Rapid gunfire or rifle shots, Sirens,
Bombardments, Screams, Raucous laughter and the like.
 General AIR Code
• Criticism of friendly countries.
• Attack of religious or communities.
• Anything obscene or defamatory;
• Incitement to violence or anything against maintenance of
law and order;
• Anything amounting to contempt of court;
• Aspersions against the integrity of the President and
Judiciary;
• anything affecting the integrity of the Nation and criticism
by name of any person.