Introduction
The Advertising Standards Council of India (ASCI), in its press release dated May 22, 20241, reported that it examined 10,093 complaints and investigated 8,299 advertisements. The majority of violations, 81%, were due to misleading claims, followed by ads that promoted harmful situations or products at 34% (one ad can be flagged for multiple issues). Digital ads accounted for 85% of the ads processed and had a lower compliance rate of 75%, compared to 97% for print and TV. This raises serious concerns about online consumer safety, as highlighted last year. Notably, 94% of the ads processed were picked up suo moto by ASCI2.
Misleading advertisements are a significant concern in India, affecting consumer trust and market fairness. This article explores the scope, impact, and regulatory framework surrounding misleading advertisements in India, drawing insights from the ASCI's Annual Complaints Report 2023-243.
Understanding Misleading Advertisements
Misleading advertisements deceive or are likely to deceive consumers, potentially leading them to make decisions they would not have made otherwise. These ads can exaggerate benefits, hide limitations, or present false information about a product or service.
The ASCI's Annual Complaints Report for 2023-24 provides a comprehensive overview of the state of advertising in India, highlighting several key points:
- Volume and Sources of Complaints: There was a significant increase in the number of complaints and advertisements processed, with a 12.75% rise over the previous year. Complaints originated from various sources, including the general public, intra-industry disputes, government interventions, and consumer organizations.
- Sector-wise Violations: The healthcare, personal care, and illegal betting sectors were the most violative. Healthcare ads often involved misleading claims about drugs and medicinal products, while personal care ads frequently violated influencer disclosure guidelines.
- Media-wise Distribution: Digital media accounted for 85% of the scrutinized advertisements, reflecting the growing influence of online platforms in advertising. Print and TV followed with significantly lower percentages.
High-Profile Violations
The report highlights several high-profile violations, particularly in the healthcare and personal care sectors. Notably, the healthcare sector had a 99% modification rate for scrutinized ads, indicating widespread issues with misleading claims. The personal care sector saw significant violations related to influencer disclosures, with 55% of ads requiring modifications due to non-compliance4.
Impact of Misleading Advertisements
Misleading advertisements can have several negative impacts:
- Consumer Trust: False claims erode consumer trust in brands and the advertising industry.
- Health and Safety: Misleading healthcare ads can lead to dangerous health choices.
- Market Fairness: Unfair advertising practices distort competition, disadvantaging honest businesses.
Guidelines on Prevention of Misleading Advertisements
In 2022, the Central Consumer Protection Authority (CCPA) under the Department of Consumer Affairs issued the “Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements5.” These guidelines aim to curb misleading advertisements and protect consumers by ensuring they are not deceived by unsubstantiated claims, exaggerated promises, misinformation, or false claims.
Key provisions include:
- Inclusion of Terms: The guidelines clearly define terms such as “bait advertisement” and “surrogate advertisement,” and specify what constitutes a “free claim advertisement.”
- Children's Advertising: Ads targeting children must not exaggerate product features or make unverified health or nutritional claims. Celebrities from sports, music, or cinema cannot endorse products that require health warnings or cannot be purchased by children.
- Disclaimers: Disclaimers in ads must not hide material information or correct misleading claims. They should be in the same language and font as the main claim.
- Penalties: For violations, the CCPA can impose penalties of up to ₹10 lakh on manufacturers, advertisers, and endorsers. For subsequent violations, penalties can go up to ₹50 lakh. Additionally, endorsers can be prohibited from making endorsements for up to one year, and up to three years for repeat violations.
Conclusion
The Annual Complaints Report 2023-24 and the new guidelines highlight the importance of vigilance and proactive measures in protecting consumers and ensuring fair competition in the marketplace. As advertising continues to evolve, particularly in the digital realm, robust regulatory frameworks and active enforcement will be crucial in mitigating the risks of misleading advertisements.
Kartikey Maithani , Associate Advocate at S.S. Rana & Co. has assisted in the research of this article.
Footnotes
1 Available at: https://www.ascionline.in/wp-content/uploads/2024/05/ASCI-PR.-Annual-Complaints-Report-202324_22.05.24.pdf
3 Available at https://www.ascionline.in/wp-content/uploads/2024/05/Annual-Complaints-Report-2023-24.pdf
4 Ibid.
5 Available at: https://consumeraffairs.nic.in/theconsumerprotection/guidelines-prevention-misleading-advertisements-and-endorsements-misleading
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