Advertising to

Consumers: Legal and

Ethical Issues
PRESENTED BY
GROUP 8
AKSHAY |AAYUSHI | PAYAL | SMRUTEE | SURABHI | UTKARSH
Advertising- A Fundamental Right
o Advertising is a marketing communication that employs an openly sponsored, non-personal
message to promote or sell a product, service or idea.
o Advertising is communicated through various mass media, including traditional media such as
newspapers, magazines, televisions, radio, outdoor advertising or direct mail; and new media
such as search results , blogs, social media, websites or text messages
“We, therefore, hold that “commercial speech” is a part of the freedom of speech and
expression guaranteed under Article 19(1) (a) of the constitution” – The Supreme Court of
India .
H.G. Wells once famously said that advertising was legalized lying. This reflects the dilemma on
advertising and its effect on consumers. In an environment of zealous competition in the
foreground of a market economy, advertisements often tend to exaggerate and misrepresent
facts which ultimately affect impressionable minds. That is precisely what all legal systems must
seek to address
Issues
 Deceptive Advertising- As advertisements aim to influence or persuade customers into
buying products that they promote; many a times advertisements illegally use false statements
and misrepresentations about their products in violation of customers’ right to know exactly
what they are purchasing.
 Misleading Prices- Companies often hide or fudge prices of products/ services advertised
in order to attract a larger customer base. The prices they advertise often do not disclose
additional charges and the overall cost to the customer. Such advertisements are commonly
found in the airlines, mobile telephony industry and memberships for clubs. A common case of
such misleading pricing is the ‘end-of-season sales’ when the prices of products are often
knocked down and advertised in the media in order to push up sales. But what such
advertisements don’t disclose is that such knocked down/ discounted prices are actually pushed
up before providing the discount so that the profit margin of the seller on such products remains
intact.
Failure to maintain standards- At times companies/ sellers/ service providers cleverly
bypass established standards applicable to the products by adopting a different standard which
provides a sense of enhanced efficacy of the goods/ services in the mind of the customer. This
also provides unfair advantages to the seller over its competitors. Such advertisements are often
seen in advertisements that compare the products advertised against the products of other
leading brands.

 Labeling issues- Labeling on products can also be misleading. They may, at times,
misrepresent or obfuscate the actual weight of the packets or adopt a different standard of
measurement contrary to the generally accepted standards. The packaging of products may also
use exotic high-sounding words such as “organic”, “eco-friendly”, “natural”, “mild” etc. without a
proper explanation of the terms and such terms may even be used for products that have
nothing to do with such concepts.
Regulations In India
 Consumer Protection Act, 1986- Section 6 of the Act grants consumers the right to be
informed about the quality, quantity, potency, purity, standard and price of goods or services, as
the case may be so as to protect the consumer against unfair trade practices.
 Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation
of Trade and Commerce, Production, Supply and Distribution) Act, 2003- Section 5 of this Act,
inter alia, prohibits both direct & indirect advertisement of tobacco products in all forms of
audio, visual and print media
Doordarshan/ All India Radio (AIR) Advertisement Code- Doordarshan and AIR,
both under the control of Prasar Bharati (a statutory autonomous body established under the
Prasar Bharati Act), follow a comprehensive code for commercial advertisements which control
the content and nature of advertisements that can be relayed over the agencies
Indian Penal Code, 1806- The IPC, vide an array of provisions, prohibits obscene,
defamatory publication, publication of a lottery and/ or statements creating or promoting
disharmony/ enmity in society.
The Representation of People Act, 1951- The display to the public of any election
matter by means of cinematograph, television or other similar apparatus in any polling area
during the period of forty-eight hours ending with the time fixed for the conclusion of the poll
for any election in the polling area is prohibited under the Act (Section 126).
Food Safety and Standards Act, 2006- Section 53 of this Act provides a penalty of up to
Rs. 10 lakhs for false and misleading advertisements relating to the description, nature,
substance or quality of any food;
Regulatory Authority
Press Council of India Act, 1978 – The Press Council of India is a statutory, adjudicating organization in India formed
in 1966 by its parliament. It is a self-regulatory watchdog of the press, by the press and for the press, that operates
under the Press Council Act of 1978. The objects of the Council are to preserve the freedom of the Press, to maintain
and improve the standards of newspapers and news agencies in India. It builds a code of conduct for the newspapers
in accordance with the high professional standards. Under this Act, the council has the power to censure any rule
which violates the journalists’ ethics and the public taste.

Advertising Standards Council of India (ASCI) is a non-statutory, self-regulatory voluntary organization of the
advertising industry. The council has drawn up a code for self-regulation in the advertising industry with a view to
achieve the acceptance of fair advertising practices in the best interests of the consumer. The ASCI also lays down
codes for advertisements in specific industries from time to time. The codes are however self-imposed discipline to be
followed by those involved in the industry and in no way are the codes mandatory. Compliance with the code is rare as
such and very few complaints are actually received by the ASCI on account of non-compliance.
Cable Television Networks (Amendment) Rules, 2006, under Rule 7(9) mandates all advertisements carried by
cable services to be compliant with the ASCI code. According to the ASCI code, complaints against deviant
advertisements can be made by anyone who considers them to be false, misleading, offensive, or unfair. The
Consumer Complaints Council (CCC) considers and decides on the complaints received from the general public
including government officials, consumer groups, complaints from one advertiser against another and even Suo
moto complaints from the member of the ASCI Board or CCC.

 Cable Television Networks (Regulations) Act, 1995, provides that no person shall transmit or re-transmit
through a cable service any advertisement unless such advertisement is in conformity with the advertisement
code prescribed under the Cable Television Networks (Amendment) Rules, 2006. Advertising code are formulated
to conform to the laws of the country and to ensure that advertisements do not offend morality, decency and
religious susceptibilities of the subscribers
The Reserve Bank of India, SEBI and the IRDA are some of the other regulatory authorities that regulate
advertisements in their respective fields.
Benefits of Advertising
Economic Benefits of Advertising – Useful tool for sustaining honest and ethically responsible competition
that contributes to economic growth. Informing people about the availability of rationally desirable new
products and services and improvements in existing ones, helping them to make informed, prudent consumer
decisions, contributing to efficiency and the lowering of prices, and stimulating economic progress through the
expansion of business and trade
Benefits of Political Advertising – As free and responsible media in a democratic system help to counteract
tendencies toward the monopolization of power on the part of oligarchies and special interests, so political
advertising can make its contribution by informing people about the ideas and policy proposals of parties and
candidates, including new candidates not previously known to the public
Cultural Benefits of Advertising – Advertisers can exert a positive influence on decisions about media content
by supporting materials of excellent intellectual, aesthetic and moral quality presented with the public interest
in view, and particularly by encouraging and making possible media presentations which are oriented to
minorities whose needs might otherwise go unserved
Moral and Religious Benefits of Advertising – In many cases, benevolent social institutions use advertising to
communicate constructive and helpful messages like those of faith, patriotism, tolerance, compassion and
neighbourly service, concerning health and education, which educate and motivate people in a variety of
beneficial ways
 Harms of Advertising
Economic Benefits of Advertising – Advertising can betray its role as a source of information by misrepresentation
and by withholding relevant facts. For example, brand-based advertising can raise major issues. Often there are only
negligible differences among similar products of different brands, and advertising may attempt to move people to
act on the basis of irrational motives (“brand loyalty,” status, fashion, “sex appeal,” etc.) instead of presenting
differences in product quality and price as bases for rational choice
Harms of Political Advertising – Political advertising can also obstruct the working of democratic process. For
example, the costs of advertising limit political competition to wealthy candidates or groups, or require that office-
seekers compromise their integrity and independence by over-dependence on special interests for funds. At times,
instead of being a vehicle for honest expositions of candidates’ views and records, it distorts the views and records
of opponents and unjustly attacks their reputations
Cultural Harms of Advertising – Advertising also can have a corrupting influence upon culture and cultural values.
The indirect but powerful influence exerted by advertising upon the media of social communications that depend
on revenues from this source points to another sort of cultural concern
Moral and Religious Harms of Advertising – Commercial advertisers sometimes include religious themes or use
religious images or personages to sell products. It is possible to do this acceptable ways, but the practice is
obnoxious and offensive when it involves exploiting religion or treating it flippantly. It sometimes is used to promote
products and inculcate attitudes and forms of behavior contrary to moral norms.
Reference
https://www.lawteacher.net/free-law-essays/commercial-law/advertising-laws-in-india-law-
essays.php
Thank You!