The Guidelines for Prevention of Misleading Advertisements and Endorsements, 2022

Notified by the CCPA on 9 June 2022 under its Section 18 power to issue guidelines preventing unfair trade practices and protecting consumer interest, the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 are the working code of Indian advertising law: what a valid advertisement must satisfy, the conditions for bait and free-claims advertisements, the prohibition of surrogate advertising, the protective rules for advertisements aimed at children, the discipline of disclaimers, and the duties of manufacturers, service providers, advertisers, agencies and endorsers. This note covers the whole instrument.

1. Status, Application and Design

• Legal basis and force: issued under Section 18, the Guidelines operationalise the Act's misleading-advertisement provisions; contravention attracts the Section 21 machinery, discontinuance or modification, penalties up to ten lakh rupees (fifty lakh on repetition) on manufacturers, advertisers and endorsers, and the endorser ban, with Section 89 prosecution behind the aggravated case.
• Who is bound: the Guidelines apply to advertisements regardless of form, format or medium, and bind the manufacturer, service provider and trader whose goods are advertised, the advertising agency and the endorser, the whole chain, print to platform.
• The design: a general standard (the conditions of a non-misleading advertisement), three regulated species (bait, free claims, surrogate), one protected audience (children), one regulated device (the disclaimer), and a chain of duties ending in the endorser's due diligence and disclosure.

2. The Conditions of a Valid Advertisement

An advertisement is not misleading when it: contains truthful and honest representations; does not mislead by exaggerating the accuracy, scientific validity or practical usefulness of the product; is framed so that its claims can be substantiated, by the trader's records, tests or data; does not omit or conceal material information, the half-truth being the classic deception; does not present rights conferred on consumers by law as a distinctive feature of the advertiser's offer (the statutory warranty sold as generosity); and does not mislead about the risks of use or non-use. The standard throughout is the ordinary consumer's net impression, the Guidelines codify the Lakhanpal approach, and obvious hyperbole that no reasonable consumer takes literally remains outside.

3. The Regulated Species

3.1 Bait advertisements

An advertisement offering goods or services at an attractive price to draw consumers is permitted only on conditions: a reasonable prospect of supplying at the advertised price, for a reasonable period and in reasonable quantities having regard to the market and the advertising's scale; a clear statement of any limitation on supply, stock, geography, time; no bait-and-switch, no running down the advertised product at the counter or steering the arrived consumer to something dearer; and no undisclosed conditions that make the advertised bargain practically unavailable (examined in detail in the bait note).

3.2 Free-claims advertisements

'Free', 'without charge' and their equivalents may be used only where the consumer pays nothing beyond the unavoidable cost of responding and collecting or paying for delivery. The Guidelines name the abuses: describing an element of a package as free when its cost is recovered in the package price; inflating the price of the paired product to fund the 'free' one; describing as free something whose quality or quantity has been reduced to carry the offer; and presenting a conditional benefit as unconditional. A trial offer may be 'free' only if genuinely so.

3.3 Surrogate advertisements

Prohibited outright: no advertisement for goods or services whose advertising is prohibited or restricted by law may be made to look like, or ride on, an advertisement for other goods or services, the brand-sharing 'soda', 'music', 'playing cards' campaigns of liquor and tobacco houses. The Guidelines condemn both the advertisement that directly or indirectly promotes the restricted product and the use of its brand name, logo, colours and presentation for other products in a manner that functions as promotion; the genuine brand extension, a real product with real sales, advertised for itself, is the recognised exception, with its bona fides for the advertiser to establish (examined in detail in the surrogate note).

4. Children, Disclaimers and the Chain of Duties

4.1 Advertisements addressed to children

Advertisements that address or target children, or are likely to influence them, must not: exploit their inexperience, credulity or sense of loyalty; claim that the product makes a child superior or that its absence invites ridicule; feature children for products legally barred to minors; carry unsubstantiated health or nutrition claims; use celebrities or sports imagery to imply unattainable results; exhort children to purchase or to pester; or condone behaviour dangerous for children to imitate. The code is examined in full in the children note.

4.2 Disclaimers

A disclaimer may clarify or qualify a claim; it cannot cure one. The Guidelines fix its limits: a disclaimer must not attempt to correct a misleading claim or change its meaning; must be in the same language as the claim; must be legible and prominent, placed in the same visual field, in a font and duration a consumer can actually read; and must not contradict the material claim it accompanies. The fine print that takes back the headline is, by the Guidelines' own terms, evidence of the misleading claim, not a defence to it.

4.3 Duties along the chain

• Manufacturer, service provider, trader: ensure the advertisement satisfies the validity conditions, hold the substantiation for every claim, and answer for the campaign as its principal.
• Advertising agency: responsible for what it designs; it must exercise due diligence regarding the claims it frames and cannot plead the brief.
• Endorser: genuine, reasonably current opinion; adequate information about or experience with the product; disclosure of material connections; and the statutory due-diligence verification that is the endorser's only shield, examined in the endorsements note.
• The professional bar preserved: persons barred from advertising or endorsement by their professional codes (doctors, advocates) gain no licence from the Guidelines.

5. Related Topics and Provisions

• Bait, surrogate, children and endorsements (Topics 73 to 76): each strand in detail
• Misleading advertisement under Section 2(28) (Topic 19): the statutory wrong
• CCPA powers and penalties (Topic 28): the enforcement behind the Guidelines
• Misleading advertisements complete notes (Topic 70): the field in one place