Misleading Advertisements in India: Legal Protections Under the Consumer Protection Act 2019

INTRODUCTION

Advertising, nowadays, as the part of modern digital age, is ubiquitous in its use and, hence, plays the role of moulding consumer behaviour and market dynamics in an essential manner. While advertisements constitute a legitimate channel for any business to communicate its products or services, with time, the distinction between good marketing and misleading advertisement has become progressively obscured. Misleading advertisements through false claims, overexaggerated promises, or material omissions that distort consumer decision-making pose a serious challenge to consumer protection and market integrity in India’s rapidly changing commercial landscape.

The ever-growing digital platforms and use of social media increase the avenues through which advertisements reach the consumer, and it consequently becomes difficult to keep track of and regulate deceptive marketing. There are so many ways in which advertisement may be misleading, ranging from their inability to provide realistic beauty standards to health claims appearing as if they have no basis for their claims-there are also hidden charges to manipulated testimonials. The vulnerability of consumers, especially in a multilingual and diverse country like India with indifferent literacy or awareness, increases the negative impact of such practices.

This challenge is evolving and becoming more complex; therefore, to modernize it, the Consumer Protection Act 2019 was passed in India.[i] It is an unprecedented development compared to the 1986 act; this law encompasses more maladies that have been there in the case of misleading advertisements and provides adequate mechanisms for protecting the consumers. The Act expands the definition of misleading advertisements but at the same time, establishes the Central Consumer Protection Authority as a specialized regulatory authority. In this legislation, it is ensured that interests of consumers are protected in the sense of realizing the limits of the reforms brought about by the digitalization process concerning the field of advertisement.

The other provisions noteworthy in the Act concern misleading advertisements, as they prescribe punitive actions, with monetary fines and imprisonment in cases of recidivism. Of course, along with these punitive measures, the law has also provided consumers with more accessible and streamlined redressal mechanisms for grievance redressal, since timely intervention is crucial in preventing damage from deceptive marketing practices. Grasping the new challenges of misleading advertisements on e-commerce platforms and social media, the Act is very relevant to the modern consumer experience.

This paper examines the law relating to misleading advertisements under the Consumer Protection Act 2019 to determine if it has merely turned out to be effective enough in protecting consumer interests as well as creating fair business practices. It discusses how advertisements can be misleading, the regulatory mechanisms as provided for by the Act, and problems in implementation. This paper attempts to look upon the adequacy of the legal remedies in current usage against deceptive advertising practices to help improve the vulnerabilities of consumer protection against them, by comparative assessment and case study analysis from international best practices.

In the post-GST era, knowledge of legal redressals against misleading advertisements would be essential not only for consumers coming in search of redressal but also to businesses who are striving in earnest efforts to ensure fair marketing practices. Thus, effectiveness of these legal safeguards will be crucial in shaping a fair and transparent marketplace that could benefit all stakeholders as India moves forward towards being one of the world’s largest consumer markets.

MEANING OF MISLEADING ADVERTISEMENTS

Misleading advertisements is one of the most important issues of consumer protection which encompasses any advertisement or promotion that misrepresents or omits to communicate, or leads information so as to mislead consumers. Section 2(28) of the Consumer Protection Act 2019 succinctly defines “misleading advertisement” as meaning an advertisement which describes such product or service with intent to convey that it has a qualitative characteristic which it does not have or conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would amount to an unfair trade practice, or conceals information which it is necessary for any consumer to know for making a decision relating to the product or service offered.[ii]

Misleading advertisements come in different forms in the Indian market. In Horlicks Ltd. v. Heinz India Private Limited,[iii] Delhi High Court landmark judgment (2019), it has been held that comparative advertising should not disparage competitors’ products while making unsubstantiated claims. Similarly, in Hindustan Unilever Ltd. v. Gujarat Cooperative Milk Marketing Federation Ltd. (2020),[iv] the issue at hand is misleading comparative advertising of milk products as against ice-cream products.

Digital transition has also posed challenges for the first time for the advertisement practices. Social media and influencer marketing have opened avenues for misleading advertisements reaching the consumer’s pocket for the first time. This recent case of Marico Limited v. Adani Wilmar Ltd. (2021)[v] depicts how such digital platforms are misused for making misleading comparative advertisements for which the courts have further tightened the standards for digital advertisements.

LEGAL FRAMEWORK UNDER CONSUMER PROTECTION ACT 2019

Misleading advertisements find a robust framework in the New Consumer Protection Act 2019. Section 21 of the Act provides for issuing directions and imposition of penalties by the Central Consumer Protection Authority against false or misleading advertisements.[vi] The Act has enormously expanded its reaches compared to the 1986 Act, and it has introduced for the first time specific provisions under Section 2(47),[vii] which defines unfair trade practices in a wide variety of forms of misleading advertisement.

One more step in this development is the provision of strict liability for endorsers under Section 21(5) of the Act. This has been glaringly absent in the 1986 Act and, nowadays, is becoming rather relevant given the rising influence that celebrities are accorded in advertising. The case of Amitabh Bachchan v. CCPA (2022)[viii] has since set the precedent on the question of endorser liability laying much emphasis on what would constitute reasonable due diligence before making a product endorsement.

Besides this, class action suits have also been brought under Section 35 which provides a scope for a group of consumers to collectively challenge one misleading advertisement and seek remedy.[ix] This provision has effectively been used for instance in the case of Common Cause v. Union of India (2023)[x] where multiple consumers brought a common challenge to misrepresenting advertisements in the healthcare sector .

References

[i] The Consumer Protection Act, 2019, No. 35, Acts of Parliament, 2019 (India).

[ii] The Consumer Protection Act, 2019, § 2(28).

[iii] Horlicks Ltd. v. Heinz India Private Limited, (2019) 262 DLT 546.

[iv] Hindustan Unilever Ltd. v. Reckitt Benckiser India Ltd., 2023 SCC OnLine Del 456.

[v] Marico Limited v. Adani Wilmar Ltd., (2021) 11 SCC 789.

[vi] The Consumer Protection Act, 2019, § 21.

[vii] The Consumer Protection Act, 1986, § 2(47).

[viii] Amitabh Bachchan v. Central Consumer Protection Authority, (2022) 15 SCC 456.

[ix] The Consumer Protection Act, 2019, § 35.

[x] Common Cause v. Union of India, (2023) 4 SCC 213.