Political and Regulatory Environment
What are the principal statutes regulating advertising generally?
The Advertising Standard Council of India (ASCI) is a voluntary,
self-regulatory council established in 1985 to promote
responsible advertising and to enhance public confidence in
advertisements.
Complaints against misleading advertisements can be filed with
this body. Adverts that contravene the provisions of the following
acts of the government or various state governments are not
acceptable:
• the ASCI’s Code for Self-Regulation 1985 (the ASCI Code);
• the Code for Commercial Advertising on Doordarshan and All India Radio;
• the Drugs and Magic Remedies Act 1954;
• the Emblems and Names Act 1950;
• the Indecent Representation of Women Act 1986;
• the Trademarks Act 1999;
• the Consumer Protection Act 1986;
• the Cable Television Network Amendment Act 2011;
• the Drugs and Cosmetics Act 1940;
• the Prize Competitions Act 1955;
• the Press Council Act 1978;
• the Cable Television Network Rules 1994;
• the Indian Medical Council (Professional Conduct, Etiquette and Ethics)
Regulations 2002;
• the Bar Council of India Rules formulated under the Advocates Act 1961;
• the Cigarettes and other Tobacco Products Act 2003; and
• the Food Safety and Standards Act 2006.
Central Consumer Protection Authority (CCPA)
The CCPA, established under the Consumer Protection Act,
2019, plays a crucial role in regulating advertising practices.
It aims to protect consumer interests by curbing deceptive, unfair,
or misleading advertisements.
This includes everything from product exaggerations to false
promises. The establishment of CCPA reflects a strong regulatory
framework to maintain ethical advertising practices and is a key
part of the political landscape affecting marketers.
Types of Misleading Advertisements Regulated
• Celebrity Endorsements:
Endorsements carry heavy
influence, and regulations now
make endorsers accountable
for verifying claims before
promoting products. This aims
to prevent celebrities from
promoting products without
understanding their implications
on consumers, thereby
minimizing consumer
manipulation through trusted
figures.
Surrogate Advertising: A notable area for regulatory scrutiny, especially in industries like alcohol
and tobacco, where the real products cannot be advertised directly, and marketers often use
substitutes (e.g., club sodas or music CDs) to promote the brand.
Bait Advertising: Promoting products at attractive prices without
intending to fulfill the demand, which is a common tactic that
ends up misleading consumers.
Punishments for False or Misleading Advertisement:
• Fine: The CCPA may impose a monetary penalty on the offender, which can
extend up to Rs. 10 lakhs for the first offense and up to Rs. 50 lakhs for
subsequent offenses.
• Imprisonment: In cases of persistent or egregious violations, the CCPA may
recommend imprisonment for a term which may extend to two years.
• Product Recall or Withdrawal: In addition to fines and imprisonment, the
CCPA may direct the offender to recall or withdraw the misleading product or
advertisement from the market.
• Advertisement Discontinuation: The CCPA may also order the discontinuation
of the false or misleading advertisement and prohibit the offender from
publishing similar advertisements in the future.
• Compensation to Consumers: In cases where consumers have suffered harm
or loss due to false or misleading advertisements, the CCPA may order the
offender to compensate the affected consumers.
