Unfair Trade Practices (Misleading Advertisements) under the Consumer Protection Act, 1986

Unfair Trade Practices (Misleading Advertisements) under the Consumer Protection Act, 1986

INTRODUCTION

Over the past few years,  advertising has become an integral part of any sales and marketing strategy. In the past, people consumed what was produced without any question asked. However, with rapid technological advancements, producers have gone the extra mile to ensure that they are able to cater and produce to the unending social needs of their customers. This marked the beginning of the marketing era. Products and services started getting advertised on radios, television commercials, print media and recently, even in various digital and social media platforms like Youtube, Instagram, Facebook, etc. While this has helped many consumers choose the right product and service, it has also made some consumers lose trust in the market. Because of the growing competition, manufacturers and service providers are tempted to engage in deceptive and misleading advertisements to increase sales and market share. To ensure that the advertisements are made in the public interest and to protect consumers’ rights against unscrupulous advertisements, the government has enacted several laws.

STATUTES GOVERNING ADVERTISING

In India, the laws regulating advertisements include even those advertisements that use the internet as their medium to reach people. Keeping in view the wide arrays of advertisements, the government has enacted the Consumer Protection Act,1986 (hereinafter referred to as CPA)  and the Competition Act, 2002 to protect the rights of consumers and regulate trade practices in the market.

Consumer Protection Act, 1986

This statute primarily focuses on protecting the interests of consumers by safeguarding them against defective goods[1], deficient services[2], unfair trade practices and restrictive trade practices[3]. An unfair trade practice includes using deceptive, unfair or misleading advertisements.[4] Here, “Misleading advertisement” means “an advertisement, which-  falsely describes such product or service; or gives a false guarantee, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or deliberately conceals important information.” [5]

The consequences of publishing such misleading advertisements have also been broadly classified under the Act. It includes compensation to the aggrieved party or imprisonment for a fixed period, or both, based on the degree of damage done. The statute additionally ensures to regulate bait advertisers and those advertisers who offer pseudo gifts or prizes to those participating in the sale contest to create an impression that something is being given free of charge, when actually it is fully or partly covered by the amount charged in the transaction as a whole.[6]

READ  Doctrine of Indoor Management - Rule in Turquand's case

Competition Act, 2002

The Competition Act, 2002 came in place of the Monopolies and Restrictive Trade Practices Act, 1969 with the intention to prevent unfair trade practices that have an adverse effect on the market. It is mainly enacted to ensure that the interests of the consumers are protected by keeping a check on the trade practices used. The act also ensures to restrict  advertisements that are considered to be prejudicial to the public interest. Quite often, advertisements of companies encourage anti-competitive practices by taking undue advantage of its dominant position, so as to create entry barriers for small companies. In such instances, the Competition Commission of India (CCI), set up under the Competition Act, 2002, can conduct an inquiry and adjudicate accordingly.

LANDMARK CASES

Over the years, there have been numerous cases that have dealt with misleading advertisements.  In 2004, Dabur India Ltd. filed a suit against Colgate Palmolive India Ltd for their advertisement that showed a celebrity tell the ill-effects of tooth powder. The toothpowder shown in the advertisement was in a red container which resembled Dabur Lai Dant Manjan Powder. The appellant argued that the said advertisement represented Dabur Lai Dant Manjan Powder to damage the tooth enamel, making it pernicious to the dental health of its consumers. The Delhi High Court ultimately granted an interim injunction on the grounds that the television commercial was disparaging.[7]

Another such example is the case of  Colgate Palmolive India Ltd. v. Hindustan Lever Ltd.[8], where the respondent in it’s television commercial for New Pepsodent showed samples of saliva being taken from two children, one who brushed his teeth with New Pepsodent and the other with a ‘leading brand of toothpaste’. Later while collecting the samples, the children were asked to name the toothpaste they had brushed their teeth with. While one replied Pepsodent, the response of the other was muffled. However, the lip movement of the child indicated that he said ‘Colgate’. Furthermore, the sound of the jingle used in Colgate’s commercial was played when the boy spoke. The commercial went on to show that the sample of the ‘leading brand of toothpaste’ contained more germs than that of the New Pepsodent sample. The court held that the advertisement of the respondent  was disparaging.

READ  ROLE OF NGOs IN PROTECTION OF HUMAN RIGHTS

Similarly, in Pepsi Co. Inc. and Ors. v. Hindustan Coca Cola Ltd. And Anr. [9] it was argued that the advertisement in question was disparaging for calling the cola drink of the appellants, “Wrong Choice Baby”.  The commercial also indicated that their drink is sweet in taste and is for kids which further disparaged the appellant’s product. It was held that the seller can say that his goods are best or better, but cannot slander or say that the competitor’s product is bad or inferior.[10]

The court also differentiated between ‘comparative advertisement’ and ‘disparaging or misleading advertisement’ in the case of  Havells India Ltd. and Ors. v. Amritanshu Khaitan and Ors.,[11] Even in the recent case of Dabur India Ltd vs Colortek Meghalaya Ltd[12], the appellant filed for an injunction in respect of the television commercial of Good Knight, alleging that it disparages the advertisement of Odomos cream. It was the first case in which the Delhi High court held that, “advertisements falling under the ambit of Article 19(2) [13] are void ab initio.”

CONCLUSION

Based on the above study, we can say that India has a large body of decided  cases on misleading and disparaging advertisements. However, even after all the efforts, we still see that many provisions of the statute are not being utilised and implemented efficiently. Moreover, we come across how producers and marketers find loopholes in the existing law to broadcast advertisements that suit their own interests. This calls for a need to establish a Regulatory Authority in India for advertisements. This statutory body will help in curbing unfair trade practices and misleading advertisements which, would ultimately protect the interests of consumers and ensure a fair market.

READ  Anticipatory Bail

 

[1] Section 2(1)(f), Consumer Protection Act,1986, Acts of Parliament, 1986 (India)

[2] Section 2(1)(g), Consumer Protection Act,1986, Acts of Parliament, 1986 (India)

[3] Section 2(nnn), Consumer Protection Act,1986, Acts of Parliament, 1986 (India)

[4] Section 2(1)(r), Consumer Protection Act,1986, Acts of Parliament, 1986 (India)

[5] Section 2(28), Consumer Protection (Amendment) Act, 2019, Acts of Parliament, 2019 (India)

[6] Ibid 4

[7] Dabur India Limited vs. Colgate Palmolive India Ltd. (2004), MANU/DE/0657/2004 (India)

[8] Colgate Palmolive (India) Ltd. and Ors.  vs. Hindustan Lever Ltd. (1997),  MANU/MR/0005/1997 (India)

[9]  Pepsi Co. Inc. and Ors. vs. Hindustan Coca Cola and Ors. (2001) , MANU/DE/1269/2001 (India)

[10] It has also been held so in in  Colgate Palmolive India Ltd v. Hindustan Lever Ltd. (1997)

[11] Havells India Ltd. and Ors. vs. Amritanshu Khaitan and Ors. (2015) : MANU/DE/0791/2015 (India)

[12] Dabur India Ltd. vs. Colortek Meghalaya Pvt. Ltd. (.2009), MANU/DE/3109/2009 (India)

[13] INDIA CONST. Art.19, cl.2

Author: Prarthana Vasudevan,
Christ (Deemed to be University), 1st year B.A. L.L.B

Leave a Comment