Understanding Advertising Laws in India – Regulations, Compliance, and Challenges

Introduction

Advertising is a methodical process of communication across different media to sell or offer goods, services, or ideas to a target audience. It aims to inform, persuade, and remind consumers and plays an important role in shaping consumer demand and market competition. India’s advertising industry has been a major driver of the country’s economic growth, shaping consumers’ behavior, generating employment, and fueling innovation across industries. It stimulates economic activity by driving demand, which creates employment and business opportunities. Digital advertising, driven by the Digital India initiative and the widespread adoption of smartphones, has further revolutionized the economic landscape, making India one of the world’s fastest-growing digital economies.

However, the increase in advertising has required regulation to prevent abuse, for instance, advertising of illegal or harmful products. The Advertising Standards Council of India (ASCI), is dedicated to self-regulation of advertising and consumer protection of interest. ASCI ensures advertisements are legal, decent, honest, and truthful, in terms of compliance with observing fairness in competition. Current trends indicate emphasis on curbing misleading advertisements and giving priority to consumer protection and ethical advertising. The Consumer Protection Act (CPA) and regulations also come into play, with the CCPA asking ASCI to refer non-compliant advertisements that have the potential to contravene the CPA. Moreover, court orders and judgments, for instance, the Supreme Court, act as precedents that further govern advertising practices.

Legal requirements for Advertising in India

Advertising in India constitutes a wide range of activities whose purpose is to promote goods, services, and ideas through media. It consists of print, online, TV, and radio advertisements, among others, and all of these combined create consumer awareness and foster economic growth. Adherence to legal requirements in advertising is called for in an effort to protect consumers from misrepresentative claims and unfair trade practices. Adherence to the set regulations promotes consumer-advertiser trust, and eventually, the market.

History of advertising regulations in India dates back to the late 18^th century when Hickey’s Bengal Gazette was published and had the first adverts. As the advertising industry changed over time, so did the demand for regulation. In 1985, the Advertising Standards Council of India (ASCI) was created as a self-regulatory agency to encourage ethical advertising and consumer welfare. A series of legislation laws, like the Consumer Protection Act and specific rules that control content in the media, have been enacted in an effort to address misleading advertisements and ensure conformity with societal standards. Today, ASCI regulates advertising practices considerably, while further legal frameworks still develop in an effort to keep up with the changes and updates in the Advertising Industry.

Key Regulatory Authority Governing Advertisements

The framework for advertising regulation in India is characterized by a number of major institutions, each playing a distinct part.

Advertising Standards Council of India (ASCI)

ASCI, a self-regulated but voluntary organization founded in 1985, strives to promote and maintain trust in advertising. Its goal is to promote truthfulness, honesty, and decency in advertising. Certain claims made by advertisers in advertising are termed effectively misleading or dangerous claims.[1] ASCI has established a self-regulatory code that advertisers are supposed to abide by, and it addresses consumer complaints through its Consumer Complaints Council (CCC). The council’s decisions are pivotal in ensuring that advertisements, in fact, comply with generally accepted ethical standards and allow for fair competition in the industry.

In November 2017, ASCI received 243 complaints. Suo moto action was taken against 152 ads and the rest were complaints from direct sources. Of the 182, 65 belonged to Healthcare, 96 to education, 3 to personal care, 7 to the category of food and beverages and 11 to ‘other.’ Gross product efficacy exaggeration was the number one reason for Complaints to be upheld, followed by a violation of the Drugs and Magic Remedies Act (DMR Act) and the Drugs and Cosmetics Rules (D&C Rules). The claim upheld against low-cost SpiceJet carrier for claiming to be the timeliest airline in the Country. The advertisement’s claim,’ SpiceJet-India’s Most Punctual Airline,’ was not substantiated by any market survey data or comparative data compared to other competitor airlines or by any third-party validation or research to prove this claim.[2]

Major Laws Governing Advertisements in India

Several fundamental laws work towards regulating advertisements, addressing specific aspects of advertising to protect consumer rights.

The Consumer Protection Act, 2019

The Consumer Protection Act of 2019 is a landmark piece of legislation that states, under Section 2(28), that misleading advertisements are those that falsely describe a product or service, offer false guarantees, or hide material facts.[3]The Act sets up a Central Consumer Protection Authority (CCPA) to regulate matters arising out of misleading advertisements. The CCPA has the power to investigate complaints made by the complainant and impose penalties on manufacturers, endorsers, or publishers of misleading ads for a fine that may be extended to ₹ 10 lakh and an imprisonment term of up to two years. On top of that, the Act also imposes corrective advertising to remove the misleading claim. This is a very strong indictment that can serve as an armour for the consumer towards the advertisement practice.

The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954

This Act prohibits the advertisement of certain drugs and magic remedies that made certain claims of curing specific diseases and disorders. The aim is to protect the consumers from false and misleading claims that exploit a person’s vulnerability concerning health issues. Advertisements claiming cures for vital diseases cancer or diabetes are strictly regulated under this law. The fines for violations of this law can be heavy, ensuring that the advertisers are unable to mislead consumers regarding unverified health benefits. The Act and its philosophy get pivotal regarding professional medical advertising even as it ensures the protection of public health by stamping out the dissemination of false information.

The Cable Television Networks (Regulation) Act, 1995

 Under section 6 of this act, no person can transmit or re-transmit any advertisement through cable service which is not verified under the advertisement code prescribed under the instant rules. The code is set up in order to ensure that any advertisement does not offend decency, morality, and religious sentiments of individuals.[4]

The Emblems and Names (Prevention of Improper Use) Act, 1950

This Act prohibits the unauthorized use of national symbols, emblems, and names in advertisements. This aims to secure dignity to national symbols and prevents their exploitation for commercial gain. Penalties can be incurred for violations, which asserts the importance of respecting the national identity in advertising practices. This is fundamental to ensure that advertisers do not use misleading commercial associations of their products related to national pride or national authority without seeking prior approval.

The Information Technology Act, 2000

The growth of digital media advertising is something that has prompted the law to provide special regimentation for online advertising practices. It addresses matters concerning electronic communications, ensuring that no digital advertisement violates consumer rights or privacy. Advertisers must ensure truthful representations of their products or services per the Act. This regulation is very much necessary in today’s digital world where misleading online content can terribly influence consumer behavior.

These statutes provide a strong basis for promoting ethical advertising practices while protecting consumers’ interests in the changing environment of the Indian market.

Code of Conduct and guidelines

Truthful Representation: Ads should be truthful and verifiable and should not mislead through false implications or omissions. Full disclosure of relevant terms and conditions must give first priority, especially in financial ads, for consumer protection.

Non-Offensive Content: Advertisements should be an architect respectively, prevailing public decency and cultural sensitivities, avoiding the indecorous portrayal of women. They should be inspired to conduct campaigns that resonate positively with societal values.[5]

Care on Exploitable Products: Ads should not incite violence or create a harmful habit, particularly for vulnerable groups like children. Other miscellaneous factors are subject to legal compliance.

The ASCI guidelines also mention deceptive advertising practices, prohibiting deception under headings like “bait-and-switch” and “dark patterns” in digital advertising.[6] Ads should not imply false urgency and press consumers into making a snap decision. In line with those guiding principles, the advertisers will allow a responsible advertising environment within India, entrenching the trust of consumers through the marketing do’s and don’ts which must safeguard the people from deception or menace at large.

Conclusion

India’s advertising law will witness a phenomenal change in the future due to the rapidly growing industry and the increasing Legality complexity of digital marketing. As the market expands, it becomes very important to balance between creative freedom and ethical responsibility.  Advertisers should be allowed to be creative, innovative without distorting or harming consumers.

Implementation of stricter enforcement of existing rules would stop misleading ads and deceptive practices. This would include the strengthened role of self-regulatory organizations such as ASCI. Another essential step could be to increase the awareness of consumers towards their rights and ads regulation, this inturn shall empower them to make informed choices and report unethical practices.

[1] Parth Gokhale & Shriyani Datta, Comparative Advertising in India: Evolving a Regulatory Framework, 4 NUJS L. Rev. 131 (2011).

[2] Yashmita Awasthi, Barkha Kakkar & Aakanksha Upp, Ethics of Advertisement and Marketing Policies: An Indian Perspective, 12 Rupkatha J. Interdiscip. Stud. Human. 1 (2020), available at https://dx.doi.org/10.21659/rupkatha.v12n1.22.

[3] Dr. T. Mallikarjuna Raju, Advertising Regulations in India, 4 J. Stud. Mgmt. & Plan. 265 (2018), available at http://edupediapublications.org/journals/index.php/JSMaP/.

[4] Shubhangi, Need for Advertising Law in India: The Best Product in the Market, Legge Rhythms (Aug. 9, 2020), available at https://leggerhythms.org/need-for-advertising-law-in-india-the-best-product-in-the-market/.

[5] Code of Ethics by Advertising Council of India, Indian Communities (Mar. 21, 2019), available at https://www.indiancommunities.org/2019/03/21/code-of-ethics-by-advertising-council-of-india/.

[6] Advertising Standards Council of India (ASCI), Guidelines for Online Deceptive Design Patterns in Advertising, ASCI (May 2023), available at https://www.ascionline.in/wp-content/uploads/2023/05/Guidelines-for-Online-Deceptive-Design-Patterns-in-Advertising.pdf.

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