This article is written by Manya Chhabra who is pursuing a Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho.
Today, India has one of the fastest-growing markets in the world with cut-throat competition amongst the sellers, each of them striving to make their products stand out from the rest in the eyes of the consumer. In such immensely competitive environments, advertising of the products is one of the ways in which sellers attempt to distinguish their products from those of others. Often times, we find that sellers tend to make exaggerated or false claims, as a result of which the end product is unable to meet the expectations created in the minds of the consumer by such advertisements. Therefore, a need was felt to curb this practice of unfair advertising. In this article, the standards created for such advertisements will be discussed in detail.
The Advertisement Standards Council of India (hereinafter, “ASCI”) was established in the year 1985 under Section 25 of the Companies Act, 1956. It has been defined as a “voluntary, self-regulatory council” which has been registered as a non-profit company. The view with which the ASCI was formed that all the advertising activities in India must be legal, truthful, decent, honest, with a sense of social responsibility and in line with fair competitive conditions.
Currently, there are similar self-regulatory bodies in over 70 countries of the world, including India, the United States of America, the United Kingdom and Germany.
Structure of the ASCI
The ASCI team consists of a Board of Governors, members of the Consumer Complaints Council and a Secretariat. The Board of the ASCI consists of a governor and 16 members, which comprise of members of reputable firms including media agencies, advertisers and other individuals involved with the advertising business. The members of the Consumer Complaints Council are discussed in detail subsequently in the article. The Secretariat consists of 5 members and is headed by the Secretary General.
It is important to note that the ASCI is not a government body and is not responsible for formulating rules for the general public. The ASCI has adopted a self-regulating code, in its commitment to further the interests of the consumers. The ASCI also invites complaints from consumers against any such unfair, untruthful and false claims and advertisements; all of such complaints are examined independently by the Consumer Complaints Council.
In the year 2016, the Ministry of Information & Broadcasting cast a mandate on all commercials and advertisements to follow the ASCI Code.
Objectives of the ASCI
The ultimate mission of the ASCI is to promote truthfulness, honesty, public decency, societal standards and to oppose hazardous products. The objectives of the ASCI include to “monitor, manage and promote” standards with respect to advertising practices in the country, with a view to ensure the following:
- That advertising claims are presented with truthfulness and honesty, and that no misleading and false claims are made.
- That the advertisements are not made and presented in a manner which is offensive to the general public in India, and that the standards of public agency are followed.
- That no advertisement is made in respect of products or services regarded as hazardous or unacceptable to individuals or to the society.
- That no unfair means are used by anyone player in the market, and that advertisements are made in a competitive manner.
The ASCI also has been established in order to codify, modify and adopt a code for fair advertisement, and that such code is modified from time-to-time.
Another objective includes to provide for a Consumer Complaints Council to entertain claims against advertisements in violation of the set standards and practices.
The Consumer Complaints Council
The Consumer Complaints Council is the body responsible for examining and investigating complaints from consumers and the public at large in relation to any contravention of the Code of Conduct of the News Broadcasting Associations and advertisement ethics. It also makes recommendations as to actions to be taken against such contravention.
The members of the Consumer Complaints Council are appointed by the Board of Governors. There are 21 members of which 12 are appointed from the civil society and 9 from professional advertisers. Usually, complaints are decided within 4 to 6 weeks.
In case no reply is received from the advertiser, the Consumer Complaints Council can pass an ex-parte decision, and can ask the wrongdoer-advertiser to modify or even to remove the false and misleading advertisement.
Jurisdiction of the ASCI
While there are no statutory provisions on the same, the jurisdiction of the ASCI has been discussed at length by the judiciary. For example, in the case of Procter and Gamble Home Products v. Hindustan Unilever Ltd., the High Court of Delhi held that the ASCI is a self-regulatory body, but it cannot adjudicate upon any disputes or award any damages. The complaint committee of the ASCI is only for self-regulation. In case any complaint is found to be of merit by the ASCI, it can only recommend steps to be taken or changes to be made by the advertiser but it cannot grant any other relief to the complainant. In other words, the ASCI does not stand at the same footing as a civil court, which is empowered to adjudicate disputes and award damages, and that it can only complement, and not usurp, the power of civil courts.
A similar stance has been taken by the High Court of Bombay in Century Plyboards v. Advertising Standards Council of India in which it has been held that the ASCI cannot assume the powers vested in a civil court. It was reiterated in this case that the machinery of the ASCI has only been designed to “complement the legal controls”, and not surpass them.
On the other hand, the Delhi High Court has taken a contrary view in the case of Metro Tyres Ltd v. The Advertising Standards Council of India in which the issue before the court was whether the ASCI is competent to entertain complaints related to infringement of copyright, in view of the fact that jurisdiction to deal with disputes of infringement and passing off has been vested in courts not below a District Court. The High Court answered the question in the affirmative, and rather encouraged the role of self-regulatory bodies in lessening litigation and providing an alternate dispute mechanism.
To summarize, the law regarding the jurisdiction of the ASCI in dealing with complaints remains unclear at the present. While it is settled that the ASCI is competent to make suggestions, what remains unsettled is whether the ASCI can adjudicate on any disputes and award damages to the complainant. To have a strong legal backing, the author contends that the law needs to be more focused so as to bring more clarity in the role of the ASCI to more efficiently deal with complaints.
A complaint received by the ASCI may be of any of the three types; the first being complaints by the public at large which may include complaints by the government. The second type being suo motu complaints from the members of the Board of Governors of ASCI or the Consumer Complaints Council. The last type includes complaints by the advertisers.
Complaints to the ASCI can be made through any of the following means:
- A letter directed to the Secretary General of ASCI.
- Official email of ASCI.
- Registering a complaint online on the website of ASCI.
- Phone call.
All the complaints received are ultimately dealt with by the Consumer Complaints Committee. When a complaint is received, the Secretary General shall acknowledge it and ask for complaints from the advertiser against whom the complaint has been filed. The parties involved shall be allowed to present their case, and a decision shall be taken within a period of 4-6 weeks. If the Committee finds that the advertisement is violative of the guidelines, it shall inform the same to the parties within 5 days. The advertiser shall be given a period of 2 weeks to make the necessary changes, failing which the ASCI will publish the advertisement in its quarterly release which is circulated pan-India.
Anti-trust or competition law in India has provisions to protect the consumers against “unfair trade practices”. The Competition Act, 2002 prohibits the making of any representation to the public which is false or misleading in a “material respect”. An unfair trade practice means the practice of promoting sale, use or supply of any goods or services in a manner that involves an “unfair method” or “unfair deceptive practice”.
Rule 7(9) of the Cable Television Network Rules, 1994 provides that “No advertisement which violates the standards of practice for advertising agencies as approved by the Advertising Agencies Association of India, Bombay, from time to time, shall be carried in the cable service.”
Generally speaking, there can be said to be two categories of misleading advertisements. The first kind pertains to the violation of the consumer’s right to information and to choice. Such advertisements relate to non-health issues that can cause mental agony and, or financial loss to the consumer. For instance, shampoo advertisements creating false sense of silkiness of hair, or ads for vehicles making false claims of mileage etc. The second kind of misleading advertisements include health and nutrition related claims, and they are a violation of the right to safety of the consumer and can cause prejudice to the health of consumers. Examples include medicines falsely claiming to cure certain ailments etc.
Recent controversies regarding Misleading Advertisements
Recently, during the outbreak of the coronavirus pandemic, there have been a number of instances where advertisers have received criticism over false advertisements promising to offer enhanced protection against the coronavirus. Some of such cases have been discussed here:
The “Anti-Corona Mattress” Case
A private company, Arihant Mattresses, faced backlash against its advertisements for an “anti-corona mattress” in a Gujrati newspaper. An FIR was filed against the company for making statements which amounted to public mischief under the Indian Penal Code, as well as under the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954. The company tried to take advantage of the pandemic, by making totally false and misleading claims in a bid to make profit.
The Immunity-Boosting Sanitizer Case
Even a company as reputed as Hindustan Unilever came scrutiny after the Drugs Controller General of India (DGCI) issued the company a show-cause notice after its advertisements for an apparently “immunity-boosting” sanitizer, which helps to prevent coronavirus. Since the product does not actually boost immunity, the DGCI concluded that making such a claim amounted to a false and misleading advertisement.
In recent years, ASCI has upheld a number of complaints against advertisers including, Hindustan Unilever (HUL), Airtel and Lucky-Goldstar (LG).
The Consumer Complaints Council rebuked HUL for a false and misleading advertisement of “Pureit Ultima” water purifier. The advertisement for this product made a claim that only Pureit Ultima has a purity indicator which shows how clean or pure the water is; “Sirf is mein hai Purity Indicator jo saaf saaf dikhata hai ki paani kitna pure hai.” This claim was false and misleading as it was untrue.
LG Electronics came under criticism for a similar reason, for an advertisement for its water purifier, which claimed that it is “India’s only true water purifier.” This claim was not at all substantiated, and LG was forced to submit a clarification about the same to the ASCI.
Airtel was also directed by ASCI to remove or to modify its advertisement wherein it had claimed that its networks are the fastest networks in India. Its rival, Reliance Jio had filed a complaint against this advertisement, contending that it was “false, misleading and incorrect”. The Complaints Committee upheld the complaint filed by Jio and concluded that Airtel’s advertisement was misleading by “ambiguity and implication.”
To summarize, the Advertisement Standards Council of India is a non-governmental, non-profit and self-regulatory body. Its role as a self-regulatory body has recently received recognition from the apex court of India. The ASCI has come a long way in restricting exaggerated and unfair claims made by various advertising agencies. In light of the fact that driven by financial and capital motives, brands often tend to mislead the public through false and unfair advertising, the establishment of ASCI and enforcement of its code is a welcome step in our society which furthers the interests of the end consumer.
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