No, this is not an article on marketing strategies. In fact it is about the legality of advertisements, once the guidelines published by the Consumer Protection Authority in India are enforced. Having an idea in advance will help strategize branding and marketing ventures for the times to come.
On September 06, 2020, the Ministry of Consumer Affairs, Food and Public Distribution (Department of Consumer Affairs), Government of India, released a draft of the Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Guidelines, 2020 (“draft Guidelines”) for public consultation. The comments and reviews of the public can be submitted to the Ministry by September 18, 2020.
As per the draft Guidelines, the 7 main requirements of a valid advertisement are that it should:
- contain truthful and honest representations;
- not exaggerate the features of the product to mislead consumers;
- not portray the basic rights of a consumer as a feature in the product;
- not suggest universal acceptance, where it is not present;
- not to mislead in any manner so as to harm consumer’s personal security; and
- not be offensive to the generally accepted standards of public decency;
- in case there is any unintentional lapse in the fulfilment of a promise/ claim, be made good later by prompt action by the advertiser/ seller or by showing that the specimen product satisfies the claims. Hence, such unintentional lapse may not completely invalidate the advertisement and give the advertiser/ seller a chance to make good, the deficiency in his product.
Intellectual Property laws and advertisements: The draft Guidelines make it clear that copying or imitating other advertisements or promotions is prohibited, so as to prevent consumers from being confused or deceived into associating one brand with another. This means sellers will now be prohibited from copying, not only trademarks, trade dress, labels, and the like, but also from copying advertisements.
Where advertisements are comparing one product with a competing product, the draft Guidelines state that the comparison should be fact-based, related to specific features of the product, and should not provide an unfair advantage to the advertiser over the competing product.
Surrogate Advertisement: Interestingly, the draft Guidelines also speak about surrogate advertisement. Imagine the brands, Seagram’s Imperial Blue or Carlsberg. What comes to your mind? Are you thinking of the actual product being sold, or are you thinking of cassettes and CDs or glass tumblers!? This is essentially what Surrogate Advertisement is: where the law prohibits advertisement of certain products, such as alcohol, cigarettes, etc., these are promoted by using the same brand name for other products that are not prohibited from being advertised.The draft Guidelines prohibit Surrogate Advertisements. Whether or not a particular advertisement is a surrogate advertisement, will be decided upon the basis of whether the unrestricted product which is being advertised is being sold in reasonable quantities.
The draft Guidelines allow puffery (exaggeration), however, it is stated that any objective claim made in an advertisement shall be supported by evidence and be capable of substantiation.
The draft Guidelines also state that an advertisement shall not describe a good or service as ‘free’, ‘without charge’ or in other similar terms if a consumer has to pay anything other than the unavoidable cost of responding to the advertisement and collecting or paying for the delivery of the item.
Concerning other aspects, the draft Guidelines also provide detailed restrictions on advertisements related to children, disclaimers on products and services. The draft Guidelines, elaborately discuss the restrictions on Bait Advertisements, which are basically, advertisements to display products that are not meant to be sold but are only displayed to entice costumers. It also provides, inter alia, the duties of sellers, manufacturers, and service providers, in relation to ensuring the authenticity of the information provided and the claims made in the advertisements. The draft Guidelines also prescribe restrictions as to manner of displaying disclaimers on the product. A disclaimer is required to be, inter aliam, in the same language as the claim of the Advertisement and placed at a position from which it is clearly visible.
With the advent of the Consumer Protection Act, 2019, enforced in July 2020, and the corresponding Rules and Regulations that have come up, it is clear that our markets are shifting from the Caveat Emptor (Buyers beware) to Caveat Venditor (Sellers beware)! Consumers and Traders should both be aware of the new and shifting framework to avail their rights and ensure their products and services are brought in the market without any hindrance.