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MISLEADING ADVERTISEMENT: LIABILITY AND CONSUMER PROTECTION ACT, 2019

INTRODUCTION

The purpose of advertisement is to attract consumers by giving the details and information related to the product. But in this age of technology and competition many companies in order to attract more consumers adopt unfair trade practices intentionally by providing false or misleading information related to the product. Various laws and regulations have been enacted to protect consumers from such false and misleading advertisements. One such act is Consumer Protection Act, 2019 (first enacted in 1986).

What is a misleading advertisement?

The term misleading advertisement has been defined in Section 2(28) of the consumer protection act as follows: “Misleading advertisement” in relation to any product or service, means an advertisement, which:

  • falsely describes such product or service;
  • gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service;
  • conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice;
  • deliberately conceals important information.[1]

Under Section 10 of this act, a Central Consumer Protection Authority has been established to regulate matters related to misleading advertisements among many other violations.[2] Under section 16 of the said act, District Collector has to further investigate the matter within its jurisdiction.[3]

Penalties for misleading advertisement –

Section 21 – If an advertisement is proved to be false or misleading, the Central Authority can issue directions for discontinuation or modification of the advertisement. If the Central Authority deems it necessary then it can impose a penalty on the manufacturer or the endorser or the publisher of the misleading advertisement of the product.[4]

Section 89 – Any manufacturer or service provider who causes a false or misleading advertisement to be made which is prejudicial to the interest of consumers shall be punished with imprisonment for a term which may extend to two years and with a fine which may extend to ten lakh rupees; and for every subsequent offence, be punished with imprisonment for a term which may extend to five years and with fine which may extend to fifty lakh rupees.[5] To understand the aim and purpose of such a liability let us examine a few case laws.

Case laws related to misleading advertisement

  • Francis Vadakkan v. The Proprietor, A-One Medicals[6]

Facts – In this case, the plaintiff had purchased a hair growth cream on seeing an advertisement related to it. The advertisement was endorsed by Malayalam film actor Anoop Menon. The advertisement guaranteed hair growth in six weeks which influenced the plaintiff to purchase the product. On no positive result even after using the cream for seven weeks, the plaintiff then filed a complaint against the defendant.

Judgement – The court held the manufacturer, Dhatri Ayurveda Private Ltd., actor Anoop Menon (the endorser), and even the medical shops selling this cream liable for misleading the consumers. The argument of the defendants that the disclaimer contained that the results may vary from person to person was also dismissed by the court. As the details were written in such minute print that it was difficult to read properly even with a magnifying glass.

  • Horlicks Limited v. Zydus Wellness Products Limited, 2020[7]

Facts – In this case, the plaintiff (Horlicks) filed a case against the defendant (Zydus wellness) for a permanent injunction of its advertisement. In the advertisement, the defendant had shown that two cups of Horlicks is equal to one cup of Complan and one cup of Complan has the same amount of Protein as two cups of Horlicks. The plaintiff contended that despite the serving size of the plaintiff and defendant being different, the cup size in the advertisement was made the same thereby creating confusion in the mind of the customers.

Judgement – The court ruled in favour of the plaintiff and granted an interim injunction. It said that the advertisement was being telecasted for only 6 seconds which did not give the viewers sufficient time to read the disclaimer about the serving size. This gives the viewers only sufficient time to look at the comparison of one cup of Complan with two cups of Horlicks and not on the disclaimer of different serve sizes. Thus, the court held the advertisement to be misleading. The above two case laws indicate that with the introduction of the consumer protection act, 2019, the manufacturer not only has to withdraw the advertisement but also pay a penalty to the consumers and modify the misleading advertisement. With this new act, even the endorser is liable to pay the penalty. They are required to check the facts and verify the claims made by them in the advertisement. These provisions will deter the manufacturer and the endorser from making false and misleading advertisements.

Few landmark cases related to advertisement

In Dabur India v. Colortek Meghalaya Pvt. Ltd., the Supreme court had said that an advertisement is protected under Article 19(1)(a) of the Constitution as long as it is not false, misleading, or deceptive.[8]

In Pepsi Co. Inc. v. Hindustan Coca Cola Ltd., it was held that an advertisement can glorify the product keeping in mind that it does not disparage a rival product.[9]

In Reckitt and Colman of India Ltd. v. M.P Ramachandran, it was held an advertisement can declare its products the best(even if untrue) and also compare its advantages to the goods of others as long as it does not disparage the product of its rival. Otherwise, it will amount to slander.[10]

Conclusion

The Consumer Protection Act, 2019 protects the various rights of consumers such as the right to information, right to knowledge, etc. It ensures that the manufacturers do not misuse Article 19 of the constitution and provide false and misleading information to the consumers under the ambit of freedom of speech and expression. Earlier, in cases of misleading advertisements, the manufacturers were asked to withdraw the ads but no strict penalty or punishment was imposed. But with this amended act, the relevant authority can impose a penalty on the manufacturer and even the endorser for providing false information and not verifying it. So, due to this stringent law instances of unfair trade practices will be curbed.

Author(s) Name: Niyati Tejani (Maharashtra National Law University, Mumbai)

References:

[1] Consumer Protection Act, 2019, Section 2(28)

[2] Consumer Protection Act, 2019, Section 10.

[3] Consumer Protection Act, 2019, Section 16.

[4] Consumer Protection Act, 2019, Section 21.

[5] Consumer Protection Act, 2019, Section 89.

[6] Francis Vadakkan v. The Proprietor, A-One Medicals,2012, CC NO 345.

[7] Horlicks Limited v. Zydus Wellness Products Limited, 2020, SCC OnLine Del 873.

[8] Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd., 2010, SCC OnLine Del 391.

[9] Pepsi Co., Inc. v. Hindustan Coca Cola Ltd., 2003, SCC OnLine Del 802.

[10] Reckitt & Colman of India Ltd. v. M.P. Ramchandran, 1998, SCC OnLine Cal 422.