Misleading Advertisements and Endorsements: Complete Notes on the Act and the 2022 Guidelines

This note consolidates the whole law of advertising under the consumer regime: the statutory definition of the misleading advertisement (Section 2(28)), the enforcement engines, Commissions, CCPA, offences, and the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022, which give the field its working rules on bait and free claims, surrogate advertising, children-directed advertising, disclaimers and the duties of endorsers. The earlier notes (Topics 19, 28 and 29) remain the detailed treatments; this is the field in one place.

1. The Statutory Core

Section 2(28) condemns an advertisement which: falsely describes a product or service; gives a false guarantee, or is likely to mislead as to nature, substance, quantity or quality; conveys a representation which would be an unfair trade practice if made directly; or deliberately conceals important information. 'Advertisement' (Section 2(1)) covers every medium, light, sound, print, electronic media, internet and websites, down to the label, wrapper and invoice, so the listing, the post and the package are all within. Falsity is judged by the net impression on the ordinary consumer, literal truth is no defence where the overall impression misleads (the Lakhanpal standard), while mere puffery, the unverifiable boast, is outside. Enforcement runs on three engines: before the Commissions, the misleading advertisement is an unfair trade practice, with discontinuance, refund, compensation and corrective advertisement at the trader's cost (Section 39); before the CCPA (Section 21), discontinuance or modification directions, penalties up to ten lakh rupees (fifty lakh on repetition) on manufacturers, advertisers and endorsers, and the endorser ban up to one year (three on repetition), with the endorser's due-diligence and the publisher's ordinary-course defences; and under Section 89, prosecution of the manufacturer or service provider, up to two years and ten lakh rupees, five years and fifty lakh on repetition.

2. The 2022 Guidelines: The Working Rules

Issued by the CCPA under Section 18 on 9 June 2022, the Guidelines bind the whole advertising chain, manufacturer, service provider, advertiser, agency and endorser, across all platforms. Their architecture:

2.1 The conditions of a non-misleading advertisement

An advertisement is to contain truthful and honest representations: claims substantiated, material information not omitted, the advertisement not exaggerating the accuracy, scientific validity or practical usefulness of the product, and not presenting rights the consumer has by law as a distinctive feature of the offer. Disclaimers may qualify a claim but cannot cure it: a disclaimer must not attempt to correct a misleading claim or change its meaning, must be in the same language as the claim and in a prominent and legible form, placed with the claim it qualifies.

2.2 Bait and free-claims advertisements

A bait advertisement, one offering goods or services at a price to attract consumers, is permitted only on conditions: the advertiser must have a reasonable prospect of supplying the goods at the offered price for a reasonable period and in reasonable quantities, must state any limitations on supply, and must not use the bait to switch consumers to dearer goods or disparage the advertised product once the consumer arrives. Free-claims advertisements may call something 'free' only where the consumer pays nothing beyond the unavoidable cost of responding and collecting; the 'free' funded by an inflated price for the paired product, or conditional on hidden charges, is misleading.

2.3 Surrogate advertisements

The Guidelines prohibit surrogate advertising: no advertisement may be made for goods or services whose advertising is prohibited or restricted by law by circumventing the prohibition through the advertisement of other goods or services sharing the brand, the liquor brand's 'music CDs' and 'packaged water', the tobacco house's 'elaichi'. The test is substance: where the advertisement's real object is the restricted product, brand imagery, colours, taglines carrying the association, the surrogate is condemned, while a genuine brand extension, a real product with real sales, advertised for itself, is permitted with the burden of showing its bona fides.

2.4 Advertisements targeting children

Advertising addressed to, or likely to influence, children carries its own code: no exploitation of children's inexperience or credulity; no claim that owning or using the product makes a child superior to others, or that not having it invites ridicule; no featuring of children for products legally barred to them (alcohol, tobacco and the like); health and nutrition claims directed at children must be substantiated, and advertisements must not urge children to pester or undermine parental judgment; sports and celebrity imagery cannot be used to imply unattainable results from consuming the product.

2.5 Endorsements

Endorsements, celebrity and influencer alike, must reflect the genuine, reasonably current opinion of the endorser, based on adequate information about, or experience with, the product; any material connection between endorser and advertiser, payment, free product, family or employment tie, not reasonably expected by the audience must be disclosed; and the statutory shield remains due diligence in verifying the claims endorsed (Section 21(3)), with the Department's disclosure guidance making the label prominent, unmissable and in the endorsement's own medium. Professional bars on advertising (doctors, lawyers) are untouched.

3. The Field in Operation

• One wrong, chosen forum: the same advertisement can draw a consumer complaint (unfair trade practice, corrective advertisement), a CCPA order (discontinuance, penalty, endorser ban) and, in the aggravated case, Section 89 prosecution; the engines run independently.
• The Guidelines as the measuring rod: CCPA action on bait offers, 'free' claims, surrogate campaigns, exam-coaching success advertising and influencer non-disclosure is framed on the 2022 Guidelines, and the dark-patterns guidelines (2023) extend the same policy to manipulative design.
• The chain of responsibility: manufacturer and advertiser for the claim; endorser for the vouching, with due diligence as the way out; publisher protected in the ordinary course of business; agency responsible for what it designs.
• Substantiation is the spine: at every stage, the question is whether the claim can be substantiated, by test, record or data, and the advertiser who keeps the substantiation file wins the case he never has to fight.

4. Related Topics and Provisions

• Misleading advertisement under Section 2(28) (Topic 19): the definition in detail
• CCPA powers and penalties (Topic 28): Section 21 in full
• Endorser liability (Topic 29): the due-diligence standard
• Special categories, bait, surrogate, children, influencers (Topic 71): the categories note