Misleading advertising practices in India

Misleading advertising

How is editorial content differentiated from advertising?

‘Editorials’ technically refers to opinion articles in newspapers. Since the vast majority of blogging falls into the ‘opinion’ category, ‘editorial blog content’ has come to mean posts that the blogger has posted out of genuine interest, in an unpaid capacity. On the other hand, advertising content is content that the author has been paid to produce. This is usually negotiated in advance. The brand will have certain parameters and goals for the post. Advertisers may compromise accuracy or try to manipulate content, but at least there is no ambiguity regarding their motivation: they are driven by profit.

How does your law distinguish between ‘puffery’ and advertising claims that require support?

False or misleading advertisements, or advertisements that create false associations, are prohibited by law, namely the Trademarks Act, the Consumer Protection Act and the ASCI Code. The advertisers can use superlatives (puffery) to boost the merits of their products, such as ‘the best’, ‘number 1’ or ‘the greatest’. However, where advertising claims are expressly stated to be based on, or supported by, independent research or assessment, the source and date of this should be indicated in the advertisement.

What are the general rules regarding misleading advertising? Must all material information be disclosed? Are disclaimers and footnotes permissible?

Under the ASCI Code, general rules regarding advertising are to ensure the truthfulness and honesty of representations and claims made by advertisements, and to safeguard against misleading advertisements. In addition, the advertisement must carry a disclaimer stating ‘past results are no guarantee of similar future outcomes and results may vary’. The font size of the disclaimer should not be less than the size of the claim being made in the advertisement and it is also specified that such disclaimers should not be in italics.

Disclaimers can ‘expand or clarify a claim, make qualifications, or resolve ambiguities, to explain the claim in further detail, but should not contradict the material claim made or contradict the main message conveyed by the advertiser or change the dictionary meaning of the words used in the claims received or perceived by a consumer’.

Must an advertiser have proof of the claims it makes in advertising before publishing? Are there recognised standards for the type of proof necessary to substantiate claims?

All descriptions, claims and comparisons that relate to matters of objectively ascertainable facts should be capable of substantiation. Advertisers and advertising agencies are required to produce such substantiation as and when called to do so by the ASCI.

Are there specific requirements for advertising claims based on the results of surveys?

Where advertising claims are expressly stated to be based on or supported by independent research or assessment, or the results of a survey, the source and date of this should be indicated in the advertisement under the ASCI Code. Surveys should be conducted by a reliable source so as to be credible and should be backed by evidence to prove their authenticity.

What are the rules for comparisons with competitors? Is it permissible to identify a competitor by name?

Comparative advertising is allowed to some extent in India. A trader is entitled to compare his or her goods with the goods of another trader and to establish the superiority of his or her goods over that of others, but while doing so, the courts in India have upheld that the advertiser cannot say that the goods of the competitor are inferior, bad or undesirable. If any such statement is made, it would be an act constituting ‘product disparagement’, which is not allowed. The ASCI Code also requires that advertisements shall not make unjustifiable use of the name or initials of any other firm, company or institution, or take unfair advantage of the goodwill attached to the trademark or symbol of another firm or its product, or the goodwill acquired by its advertising campaign.

Section 29(8) of the Trademarks Act states that a registered trademark is infringed by any advertising of that trademark if such advertising:

• takes unfair advantage of and is contrary to honest practices in industrial or commercial matters;
• is detrimental to its distinctive character; or
• is against the reputation of the trademark.

However, section 30(1) creates an exception to such infringement, namely that a trademark is not infringed where the use of the mark is in accordance with honest practices in industrial or commercial matters or the use is not such as to take unfair advantage of or be detrimental to the distinctive character or repute of the trademark.

Do claims suggesting tests and studies prove a product’s superiority require higher or special degrees or types of proof?

Yes, claims suggesting tests and studies prove a product’s superiority require proof. Where advertising claims are expressly stated to be based on or supported by independent research or assessment, the source and date of this should be indicated in the advertisement under the ASCI Code. Surveys should be conducted by a reliable source so as to be credible and authentic.

Are there special rules for advertising depicting or demonstrating product performance?

There are no specific rules or provisions that require an advertiser to mandatorily demonstrate product performance. However, in case an advertisement depicts the performance of a product, such a demonstration must be true and factual, otherwise a consumer complaint may arise regarding the difference in the performance of the product as claimed by the owner in an advertisement when compared to the performance of the same product in the hands of a consumer. An advertisement is misleading if it creates, increases or exploits a false belief about expected product performance. Advertisements are also considered misleading if they create a false impression, even if everything stated in the advertisement may be literally true. Misleading advertising occurs when a claim about a product or service is materially false or misleading, in an attempt to persuade the consumer to buy it.

Are there special rules for endorsements or testimonials by third parties, including statements of opinions, belief or experience?

To ensure the truthfulness and honesty of representations and claims made by the advertisements and to safeguard against misleading advertisements, the ASCI Code requires that the advertisement shall not, without permission from the person, firm or institution referred to, contain any reference to such person, firm or institution that confers an unjustified advantage on the product advertised or tends to bring the person, firm or institution into ridicule or disrepute. If and when required to do so by the ASCI, the advertisers and the advertising agency shall produce explicit permission from the person, firm or institution referred to in the advertisement.

Are there special rules for advertising guarantees?

There are no special rules for advertisement guarantees. Under the ASCI Code, claims such as ‘guaranteed for up to five years’ are not accepted if there is a likelihood of the consumer being misled, either as to the extent of the product’s availability or as to the applicability of the benefits offered.

Further, the ASCI lays down specific rules for skin lightening or fairness improvement products where it explicitly requires advertisers to not claim or guarantee any false fact.

Are there special rules for claims about a product’s impact on the environment?

The Air (Prevention and Control of Pollution) Act 1981 and the Environment (Protection) Act 1986 empowered the government to take necessary steps towards the protection of the environment. The Eco-mark scheme was launched in 1991 to encourage consumers to buy products that have a less harmful impact on the environment. The scheme provides accreditation and labelling for household and other consumer products that meet certain environmental criteria along with the quality requirements of Indian standards for the product. The scheme is voluntary and invites participation from citizens and concerned industrial sectors in the wider interests of the environment.

Are there special rules for describing something as free or a free trial or for special price or savings claims?

Indian law does not prohibit sales promotions by advertisers. However, sales promotions have to meet the requirements of the ASCI Code. No advertisement shall be permitted to contain any claim so exaggerated as to lead to grave or widespread disappointment in the minds of consumers. As per the ASCI Code:

• products shall not be described as ‘free’ where there is any direct cost to the consumer other than the actual cost of any delivery, freight or postage. Where such costs are payable by the consumer, a clear statement that this is the case shall be made in the advertisement; and
• where a claim is made that if a product is purchased another product will be provided ‘free’, the advertiser is required to show, as and when called to do so by the ASCI, that the price paid by the consumer for the product offered for purchase with the advertised incentive is no more than the price of the product without the advertised incentive.

Are there special rules for claiming a product is new or improved?

Yes, the ASCI lays down validity and duration of claiming new and improved as follows:

• the definition of ‘new’: the words ‘new’ and ‘improved’ must specify what aspect of the product or service is new or improved, regarding the product’s utility, function, product design, package design, etc; and
• the period over which it can be claimed: the above-mentioned words may be used in advertisements only for a period of one year from the time the new or improved product or service was launched or introduced into the market.

Are there special rules for claiming where a product is made (such as country of origin)?

Please see www.gettingthedealthrough.com.