LAW MANTRATHINK BEYOND OTHERS (National Monthly Journal, I.S.S.N 2321 6417)

Deceptive and Misleading Advertisements in India

Introduction

Perception is subjective phenomenon. People draw meaning though a complex process

involving both hemispheres. It is this process which provides a wide window of opportunity to

admen to mislead by twisting what drives perception and what is pushed into background.

Advertising is an effective tool adopted by the market players to reach their perspective

customers and to educate them about the uses of their products. However, the practice of

advertising can also be misused to deceive the customers and bait them into the trap laid down

by the producers. It is due to the prevalent cut-throat competition in the marketplace that

various businesses are resorting to the unethical practices of releasing misleading and false

advertisements. However, this is not the only reason for misleading customer. Most of the time

deceptive advertisements are made to disparage the competitive counterparts and display a

very vague image about them. Such advertising is seldom accompanied with malicious

intention of undue enrichment of their product. In the race of scaling higher profits and

expanding their sales, companies wholesomely ignore their responsibility towards customers-

the responsibility of providing true and correct information about their products. Customer, in

the words of John K. Galbraith is described as

It is not the consumer who is the king, but it is the large corporation who is the king in the

economy. Whatever happened is not because the consumer wants it but because large and

powerful corporations prefer it that way

This paper will be dealing with the concept of misleading advertisements and would also be

highlighting a few celebrated cases in the context of same.

1. Elucidation of the term Misleading advertisements

An advertisement is misleading if it deceives or is likely to deceive those to whom it is

addressed and as a result is likely to affect their economic behaviour or is likely to injure a

competitor of the advertiser.1 Section 2(r)2 while defining Unfair Trade Practices provides

misleading representation/advertising to be one of the recognized methods undertaken by the

market players for deceiving their customers.

2. Judicial Pronouncement on misleading advertisement

Using false statements to entice buyers, quoting false prices to attract customers or disparaging

a rival product in a misleading manner are some of the common practices that are adopted by

the business entities to have an edge over their competitors. Newspapers and the televisions are

flooded with such advertisements.

i. Bureau Of Indian Standards vs Pepsico India Holdings P. Ltd.3

The advertisement of water packaging brand 'Aquafina' contains a pictorial depiction of snow

capped mountains is being manufactured and marketed by Pepsico India Holdings Pvt. Ltd. It

is objected on the ground that the pictorial device "Snow-Capped mountain" as used in the

label suggests that the Packaged Drinking Water has its origin in the mountains indicating the

product to be sourced from the mountains which is therefore a misleading claim regarding the

origin of the water. The other objection is on the expression 'Purity Guaranteed' which creates

confusion in the mind of the general public regarding nature, composition and properties of the

Packaged Drinking Water. The Court held that the pictorial device 'snow-capped mountain'

suggests the packaged mineral water has its origin in the mountains which creates a misleading

impression in the mind of the purchasing public. The phrase, "Purity guaranteed", the

expression 'Purity Guaranteed', only conveys to the consumers the guarantee that the quality of

the product is safe for human consumption and it does not contain any harmful and undesirable

substance

ii. Colgate-Palmolive (India) Limited Vs. Anchor Health and Beauty Care Private Ltd.4

1 Available at http://www.cccindia.co/corecentre/Database/Docs/DocFiles/misleading.pdf last visited 30 May 2014 2 Consumer Protection Act, 1986. 3 129 (2006) DLT 522. 4 2008-4-LW628, (2008)7MLJ1119, 2009(40)PTC653(Mad)

The grievance was regarding Television Commercial of Anchor Toothpaste. In the said

advertisement, a Hindi Film actress advises her daughter that "Anchor" tooth paste is the only

tooth paste containing Triclosan, Calcium and Fluoride and that it is the first tooth paste

providing all round protection. Ultimately, the actress questions the viewer as to when the

viewer would change over to "Anchor" tooth paste. The said advertisement also showed that

Fluoride in "Anchor" tooth paste gives 30% more cavity protection and Triclosan is ten times

more effective in reducing bacteria. Colgate contended that Anchor is not the first and only

brand using Triclosan, Calcium and Fluoride and even Colgate contains all the three

ingredients. Further, every tooth paste is supposed to contain 1000 ppm (particles per million)

of fluoride and the same is also regulated by Rule 149-A of the Drugs and Cosmetics Rules.

When the ingredients of a normal tooth paste are just the same, the claim of superiority that the

defendant's product would give 30% more cavity protection and 10 times more effective in

fighting bacteria, were obviously false, intended to mislead the consumers. The Court allowed

the contention of colgate to a limited extend and held Anchor guilty of unfair trade practice by

projecting their product as only product containing 3 ingredients and as first and only product

to provide all round protection. Thus, in public interest, the Court, restricted anchor to continue

with such misleading claim .

iii. Glaxosmithkline Consumer Healthcare Ltd. Vs. Heinz India (P) Ltd.5

In this case, two advertisements of Complan (Heinz) were challenged to be disparaging and

misleading. First advertisement of Complan shows a Mummy telling the another Mom that

shes compromising her childs health by buying a product made of cheap

ingredients(Horlicks, Glaxo) and that her (fat) child would not grow as fast as a child who was

fed Horlicks. The Complan mother then picks out a Complan packet and explains how it has 23

vital ingredients which would ensure fast growth of a child. In the second advertisement, a

Horlicks mom asks the Complan Mummy how her son was so tall and strong. The Complan

mother then expounds on the virtues of Horlicks after which she asks the Horlicks mother:

have you ever read the label of cheap Horlicks? This is followed by the Complan mom

explaining to the Horlicks mom that Horlicks is made of cheap products and ingredients which

means less nourishment & protein. The ad ends with a voiceover praising Complan. The Court

ruled in favour of Horlicks since the ad-campaign against them was clearly disparaging and

also ordered Complan to pay Horlicks costs of Rs. 2.2 Lakhs only Justice Bhat drawn a

5 2009 (39) PTC 498 (Del).

distinction between advertisements in different mediums i.e. print and television with the

standard of judicial scrutiny being much higher in the latter than in the former. The reason for

this according to Justice Bhat is the fact that television advertisements unlike print

advertisements make an instant impact across consumer classes and the level of impact of such

advertisements on the consumer is much greater than a print advertisement where each word

has to be read, analysed and understood.6

iv. Marico Limited vs Adani Wilmar Limited 7

The Present case was between edible oil manufacturing companies Saffola and Fortune.

Saffola contended that Fortune has made false, unsubstantiated and misleading claims and

statements in respect of Fortune Rice Bran Oil (RBO) as being the healthiest oil in the world,

healthier than the SAFFOL oil and is good not only for the heart, but also good for cholesterol

immunity, skin and hormones.

The Court ruling in favor of Fortune held that the Courts cannot adopt a hyper technical view

and penalize the defendant for not disclosing each and every detail regarding the cholesterol

lowering abilities of Oryzanol so long as the intent, storyline and message sought to be

conveyed by the advertisement is not entirely untrue. Hence, it was held that the advertisement

of Fortune is not misleading.

v. Dabur India Ltd. Vs. Vs. Colortek Meghalaya Pvt. Ltd. 8

It was held that while hyped-up advertising may be permissible, it cannot transgress the grey

areas of permissible assertion, and if does so, the advertiser must have some reasonable factual

basis for the assertion made and it is not possible for anybody to make an off-the-cuff or

unsubstantiated claim that his goods are the best in the world or that his goods are better than

that of a rival.

vi. Reckitt & Colman of India Ltd. v. M.P. Ramchandran and Anr. 9

This case was referred to for the following propositions relating to comparative advertising: 6 Mr. Prashant Reddy Delhi High Court rules on Horlicks v. Complan Ad-Campaign Ad-gurus gone wild first published on December 1, 2010 available at http://spicyip.com/2010/12/delhi-high-court-rules-on-horlicks-v.html last visited 29 May 2014. 7 199 (2013) DLT 663. 8 (2010) 44 PTC 254 Delhi (DB) 9 .,1999 (19) PTC 741

(a) A tradesman is entitled to declare his goods to be best in the world, even though the

declaration is untrue.

(b) He can also say that his goods are better than his competitors, even though such statement

is untrue.

(c) For the purpose of saying that his goods are the best in the world or his goods are better

than his competitors he can even compare the advantages of his goods over the goods of

others.

vii. Hamdard Dawakhana and Anr., Kalipada Deb and Anr., Lakshman Shripati Itpure @ Lakshman Shripati Impore and A.B. Choudhri and Anr. Vs. The Union

of India (UOI) and Ors.10

This case deals with advertising of prohibited drugs and commodities. The Court came to the

conclusion that the sale of prohibited drugs was not in the interest of the genera) public and as

such "could not be speech" within the meaning of freedom of speech and expression under

Article 19(1)(a) of the Constitution. The Court further held in the said case that an

advertisement is no doubt a form of speech but its true character is reflected by the object for

the promotion of which it is employed.

viii. Godfrey Phillips India Ltd Vs. Ajay Kumar11

A cigarette manufacturing company Red and White manufactured and sold the cigarettes by

its name. The Advertisement stated Red and White smokers are one of a kind with smiling

face of actor Akshay Kumar holding a cigarette. National Commission allowed revision and

issued certain directions including payment of compensation to complainant. The Supreme

Court held that in order to represent all aggrieved strata of people, the complainant has to take

their permission and in absence of permission under Section 13 (6) of Consumer Protection

Act, 1986, it is not permissible for complainant to represent them and hence, order of National

Commission set aside.

ix. Colgate Palmolive (India) Ltd Vs.Hindustan Lever Ltd.12

10 AIR1960SC554 11 AIR2008SC1828 12 AIR 1999 SC 3105

In this case it was contended by Hindustan Lever that Colgate dental Cream for its promotion

in its advertisement claimed to have action of 'Germ Fighter', which is projected as a process

by which germ activity. It is stated to have the ability to 'fight tooth decay' and to 'Stop bad

breath'. Hindustan lever carried out in their Research center well accepted test to study the anti-

bacterial efficacy of the Colgate. The test data shows that Colgate Dental Cream has no

significant impact on the survival rate of oral bacterial during the contact of 60 seconds which

is more than the average brushing time of consumers. The same test done for toothpaste will

standard antibacterial agent shows a significant drop in the survival rate of these bacteria under

similar conditions". The dismissed the appeal of Hindustan lever stating

No evidence has been led as to whether there would be avoidance of 'tooth

decay' or 'germ fighting' by reason of the user of the toothpaste and without

rendering evidence on these two basic elements in our view, question of there

being a prima facie case for establishment for the grant of interlocutory

injunction does not and cannot arise.

x. M. R. Ramesh vs. M/S Prakash Moped House and Others13

In this case the apex consumer court ruled against an advertisement that used fine print to hide

crucial information pertaining to product and services, thereby misleading the consumer in

their choice. By the way of awarding monetary compensation to the consumer, who was misled

by such an advertisement, the National Commission held that it would not take such violation

of consumers right to information lightly. The commission also advised the manufacturers and

services providers that advertisements should not mislead and should give a clear picture of

quality of goods sold.This case was concerned with the advertisement of a motorbike Hero

Honda CD-100. One M. R. Ramesh bought the above mentioned bike in Bangalore in February

1993. His contention was that at time of purchase, he was assured that bike would run 80 kms

on a litre of petrol. However, the bike ran 22 kms less than promised. He filed before the

National Consumer Dispute Redressal Commission, New Delhi that an advertisement

published in October 1993, wherein the manufacturer had made such a claim about the mileage

of the motorcycle. The manufacturer, on the other hand, brought on record advertisement

during the period which carried an asterisk on the numerical figure of 80 and at the foot of

advertisement in small print, said at 40 kmph/130 kg, thereby qualifying the claim.

3. False claims of warranty or guarantee.

13 RP No. 831 of 2001.

It is also one of the highly practiced ways of deceiving the customers. In order to persuade the

customers to buy ones product, the companies make false claims regarding the warranty or

guarantee of a product thereby creating an impression of a quality product in the mind of the

customers. On occasions of any default or shortcoming in the products/services (post purchase)

the companies fail to accept any responsibility and try to flee from the liability of making good

the defect. Thereafter the customers are rendered helpless and they feel cheated.

4. Non-compliance of Lucrative offers

Various brands and companies resort to the idea of luring their customers by displaying offers

in their advertisements which they in reality dont wish to comply with. Some of the examples

of such offers are free gift on purchase of a product, additional quantity of the product for

free, Chance to win a trip abroad on purchase of the product, etc. It is due to these attractive

offers that consumers are declined towards the products of the companies making such offers.

Whereas generally no such offers are complied with, making the purchase of the product

worthless.

One of the most relatable examples in this context would be of the offers provided by the

mobile phone service providers. They claim to be providing offers such as free calls and

SMSes but in reality they mobilize the funds which the customers pay to avail such services to

compensate their expenses. There are various hidden costs and surcharges that the customers

overlook and are thereby made to believe that such costs and surcharges are not levied upon

them.

When any advertisement uses or rather misuse of the word free ("buy one, get one free" sale)

there it is an established fact that the consumer is very definitely paying for what is apparently

free.

Another common practice undertaken by the sellers is that they increase the prices of their

products along with which they claim to provide free gifts and by the way of the increased

prices they cover up the expenses incurred by them in providing the free gifts.

5. Violation of customers right to safety

This includes health cures and drugs of questionable efficacy and health gadgets of unknown

values. This class of advertisements is the most dangerous, as they can also have a severe

repercussion on the health and safety of the consumer.

Tempted by an advertisement, claiming to increase a person's height, Nadiya, a Class VIII

student having a height of 135 cms got admitted to Fathima Hospital for surgery, on 24-7-

1996, for increasing her height. The surgery was conducted and a ring fixator was fixed on the

legs which had to be adjusted every six hours. To her dismay Nadiya found her left leg shorter

by inches, and therefore she could not walk. By September 1996, the pain had increased and

the complainant was bed-ridden till March, 1998. The Commission held the hospital and the

doctors negligent and deficient in their service and directed them to pay Rs 5,00,000 with costs

amounting to Rs 2,000 to the complainant. The doctors were fined for a sum of Rs. 1 lakh for

publishing misleading advertisement

In matter of Ajay Gautam Vs. Amritsar Eye Clinic and 6/6 Lasik Laser Centre, Dehradun &

others National Consumer Disputes Redressal Commission (NCDRC) (Judgement Dated :

26.02.2010) held that doctors cannot advertise anything that would mislead a person into going

for a treatment based merely on the doctors claim that he/she would be cured completely,

according to a judgement The Dr Dinesh Sharma of Amritsar Eye Clinic, Dehradun had

advertised that his laser surgery could correct visual acuity and therefore one could get rid of

spectacles. Upholding a fine of Rs 1 lakh on the doctor, the commission, found the doctor and

the hospital where the surgery was done guilty of adopting unfair trade practice, and

violating the MCI code of ethics by publishing misleading advertisement. The doctor was

fined Rs 1 lakh for publishing misleading advertisement. Also the advertisements for general

medicines that are aired on televisions or the radios never talk of the side effects that may

result from the frequent use of such medicines.

6. Impact of misleading advertisement on Children

Children represent three different markets. In addition to the direct money that children spend

and the money they influence, children also represent a third major market and perhaps the

most significant and that is the future market14. Advertisers recognize that brand loyalties and

consumer habits formed when children are young and vulnerable will be carried through to

adulthood. Retailers and marketers also aware of the fact that those who switch are less likely

to be loyal than those who are nurtured from childhood15. The majority children have

generally grasped the intention to persuade by the age of eight, while after eleven or twelve

14 Sharon Beder: Marketing to children, New College Institute for Values Research, Sydney http://www.uow.edu.au/arts/sts/sbeder/children.html 15 James U. McNeal, Kids as Customers: A Handbook of Marketing to Children, New York: Lexington Books, 1992, p. 91

they can articulate a critical understanding of advertising16. Surprisingly children from the age

group of 3-6 years, (most of whom who cannot distinguish between advertisements and

programs) who do not have the emotional or cognitive tools to evaluate what's being sold to

them also demand for product of their choice (most of the times advertised products). They

want the advertised product which gives pleasure because its glorified17fantasy and puffery

appeal.

Obesity

In a recent study, Dr. Robert Lustig from the University of California, San Francisco suggests

that childhood obesity arises from foods that are high in fat and fructose and low in fiber.

When children eat these insulinogenic foods, the insulin not only increases the effects of the

pleasure-chemical dopamine (making the child want to eat more of the same food) but also

reduces the effects of the hormone leptons, making the child want to eat more and be less

active 18. Indian child on an average get exposed to not less than 20 attractive messages of

these product. More time spent with television viewing more exposure to these messages

(Repeat advertisements message result into placing the brand on top of the mind) will result

into buying the brand illustrated in the advertisements. If we screen the table we can note on

an average child from age group 3-6years spend 2.32 hours, 6-9 years spends 3.12 hours and a

child from 9-12years spends 3.45 hours. More time spend more will be advertising exposure 19

Smoking20

Spanning a 3-year period from 1993 to 1996, the study found that adolescents who had a

favorite cigarette advertisement in 1993, compared with those who did not, were twice as

likely either to have started smoking by 1996 or to be willing to start, and those who owned or

were willing to own a promotional item were three times as likely to have started smoking by

1996 or to be willing to start

7. Impact misleading advertisement on Adolescents

Effects of the mass media have been found to be far-reaching and potentially harmful in

16 Bandyopadhyay, S., Kindra, G., Sharp, L. (2001), "Is television advertising good for children? Areas of concern and policy implications", International Journal of Advertising, Vol. 20 pp.89-116. 17 Mass Media and Child Obesity-The advertising impact on increased weight gain- Column published by Dr. Richard Visser in http://www.lafamily.com/display_article.php?id=1433 18 Ibid. 19 The Impact of television advertising on child health and family spending - A Case Study by Dr. Kadambini Katke Dayanand Sagar College of Management and Information Technology, Bangalore. E-mail: Kadambini_katke@yahoo.com 20 Impact of Media on Children and Adolescents: A 10-Year Review of the Research page 398

influencing the health-related behaviors of children and adolescents, many of whom are not yet

mature enough to distinguish fantasy from reality, particularly when it is presented as real

life. This is particularly important for very young children who developmentally think

concretely and are unable to distinguish fantasy from reality. Furthermore, time spent with

media decreases the amount of time available for pursuing other more healthy activities such as

sports, physical activity, community service, cultural pursuits, and family time.21 In the

absence of regulations restricting food advertising aimed at children, reduction in television

viewing is a promising approach to reducing excess energy intake.22

8. Conclusion

Although the legal framework for the prevention of unfair, deceptive, and misleading

advertising in India exists, the practice continues almost unabated. Consumers and their

organizations must assert their rights against unscrupulous businessmen indulging in such a

practice and bring such cases to the notice of the enforcement agencies, which, in turn, have to

play the role of a watch-dog of public interest.

By:

Ananya Pratap Singh and Harshit Manaktala , 3rd Year, Symbiosis Law School, Noida

21 Effect of Electronic Media on Children MUNNI RAY AND KANA RAM JAT, Volume 47 July 14 2010 22 Ibid.