[Nandinii and Mehul are students at Rajiv Gandhi National University of Law.]
Advertisements and consumer culture have become a sine qua non in the contemporary world. In the era of globalization, advertising assumes an indispensable role in cultivating a robust brand for corporations and their products. Creating awareness and providing (true) information aids the consumers in making an informed choice. However, advertising has been subjected to a multitude of transgressions ranging from deception to dilution of intellectual and moral principles. The subtlety of this deceptive practice, in most instances, makes it all the more difficult to identify and combat. The Indian marketplace is equally susceptible to such trends, making it imperative to bring about effective regulations.
The Supreme Court of India, in the case of Indian Medical Associations and Another v. Union of India and Others (2022), in order to fill up the vacuum of any robust mechanism in law, directed that prior to the printing/airing/displaying of an advertisement, a self-declaration certificate (SDC) shall be submitted by the advertiser/advertising agency. In compliance with the court’s order, the Ministry of Information and Broadcasting (MIB), in June 2024, mandated the requirement of the SDC to be submitted to the competent authority before the publication or broadcast of any advertisement. This is a crucial and appreciable advancement towards building an efficient defence mechanism against misleading advertisements. However, the jury is still out on the efficacy of its implementation.
Defining Misleading Advertisements
The governing law for the protection of the interests of consumers is the Consumer Protection Act 2019 (Act). Section 2(28) of the Act defines ‘misleading advertisement’ as an advertisement that inaccurately portrays or provides false assurance to, or is likely to deceive consumers about the nature, substance, quantity, or quality of the product or service. Further, if it intentionally fails to disclose vital information or communicates an explicit or implicit statement that, if made by the manufacturer, seller, or service provider, would be considered an unfair trade practice. With the power vested in the Central Consumer Protection Authority under Sections 10 and 18 of the Act, the Ministry of Consumer Affairs set forth the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements 2022 (2022 Guidelines).
The Advertising Standards Council of India (ASCI) is a voluntary self-regulation council that controls the content of advertisements to ensure that the interests of consumers are not hampered. The objective of ASCI is to guarantee that advertisements adhere to its Code for Self-Regulation, which mandates that they must be lawful, decent, honest, and true, and not dangerous or detrimental, while also upholding fairness in competition. Under the Cable Television Networks (Amendment) Rules 2021, ASCI has been recognised as a self-regulating authority and this position has been further affirmed and recognised in the case of Common Cause (A Regd. Society) v. Union of India and Others (2017) by the Supreme Court of India. Chapter 1 of the ASCI Code for Self-Regulation provides a safeguard against misleading advertisements and stipulates that “1.4 Advertisements shall neither distort facts nor mislead the consumer by means of implications or omissions.”
Navigating the SDC Mandate
ASCI lacks the power to penalize or compel advertisers / advertising agencies / publishers / broadcasters to adhere to its recommendations, often leading to complaints being simply forwarded to the concerned authorities which leaves consumers clueless as to the outcome of the complaint. To bridge this gap, the Supreme Court of India, by its order dated 7 May 2024, directed all advertisers / advertising agencies that before an advertisement is printed / aired / displayed, an SDC shall be uploaded, as per Rule 7 of the Cable Television Networks Rules 1994. These Rules pertain to the fact that all advertisements should obey the laws of India, and must not offend morality or decency, glorify violence and ill social issues, discriminate or promote harmful products, portray women stereotypically, etc. Such SDC has to be uploaded on the Broadcast Sewa Portal of the MIB, and in the case of press / print media / internet through the Press Council of India Portal. Additionally, proof of uploading the SDC has to be given by the advertisers to the concerned broadcaster / printer / publisher / TV channel / electronic media, as the case may be. The court further held that no advertisements will be permitted to run without uploading the requisite SDC on the portal.
In compliance with the court’s order, the MIB on 3 June 2024 released its circular, thus extending the application to broadcasters and publishers. The circular imposed the obligation of ensuring compliance with the SDC submission mandate on the broadcasters / publishers, instead of on advertisers / advertising agencies as stipulated by the court’s order. Rather than merely requiring advertisers to provide proof of uploading the SDC, the MIB circular mandates that advertisers submit the valid SDC itself. The MIB further released guidelines for using the respective portals to submit the SDC, creating an exception for statutory advertisements and classifieds not pertaining to goods or services, an exemption that is not authorized by the court’s order. Effective from 18 June 2024, all advertisers / advertising agencies are required to obtain an SDC before broadcasting / publishing any advertisement across electronic media, print media, or the internet.
Applicability of the Mandate
While the court’s order mandates the SDC to be uploaded by advertisers / advertising agencies, the MIB circular and guidelines put an additional obligation on obtaining the signature of the authorised representative of the advertiser / company. Although the applicability appears straightforward at first glance—targeting advertisers and advertising agencies—there is a subtle complexity lurking beneath the surface. Section 2(1)(b) of the 2022 Guidelines meticulously and comprehensively defines ‘advertiser’. The underlying issue arises from the definition of ‘advertising agency’ as outlined in Section 2(1)(c) of the 2022 Guidelines. It states that an advertising agency is “a person or an establishment providing services in designing and production of advertisements or other related services for a commission or fee”. The 2022 Guidelines nowhere specify the definition or scope of “other related services”, creating a legal quagmire for dubious interpretation. There is no clear delineation with reference to whether these other related services would entail the limited scope of designing and production of advertisements or whether they are “any” other related services related to advertisements. The former would imply that no intermediary or establishment exhibiting the advertisement would be liable for any misleading advertisement published on their platform.
Let us assume that an intermediary displays an advertisement on its platform or a third-party platform, and such an advertisement is found to be misleading. Going by the former interpretation, neither the intermediary nor the third-party platform on which the advertisement was exhibited would be liable, even in the case that they had knowledge of the content of the advertisement or had reviewed the same. This interpretation thereby goes against the essence of the consumer protection laws as the interests of the consumers would be compromised and no liability would be attracted for the exhibition or display of this misleading advertisement. Further, the intermediary would not fall under the ambit of ‘advertiser’ as per the definition in the 2022 Guidelines as an advertiser has been defined as ‘a person who designs, produces and publishes advertisements… and includes a manufacturer and service provider of such goods, products or services’. Hence, in such a case, an intermediary would neither be liable as an advertiser nor as an advertising agency.
Differing interpretations of ‘other related services’ lead to ambiguity in enforcement i.e., different authorities may apply varying standards of interpretation, leading to inconsistent outcomes for similar cases. In the event that the mere display or hosting of advertisements by social media platforms or other digital service providers were to be construed as ‘other related services’, they would attract liability without having control over the content of the advertisement which would lead to overburdening the intermediaries as well as wasting precious judicial time. A number of digital intermediaries depend on safe harbor immunity within the Information Technology Act 2000, which shields companies from legal responsibility for third-party content in the event that they fail to exercise content control. An expansive interpretation of ‘other related services’ as including merely the hosting or display of advertisements could contradict these safe harbor safeguards, therefore generating legal ambiguity for digital platforms.
Conclusion
“If an ad is wrong, we will set it right”, says ASCI. The abundance of false and deceptive advertisements has proliferated the contemporary digital landscape and providing a canvas to publish and broadcast such misleading advertisements which ultimately harms both consumers and competition. The Supreme Court of India’s mandate for submitting an SDC is a breath of fresh air to regulate the evolving landscape of advertisements in India. However, the circular and guidelines given by MIB evidently exceed the parameters set forth by the Court. While it aims to strengthen the regulatory framework and provide consumers with greater protection, its effectiveness hinges on its implementation and interpretation.
The varying interpretations presented by the definition of ‘advertising agency’ under the 2022 Guidelines pose a significant challenge, as it creates legal ambiguities and uncertainties for advertisers, advertising agencies, and intermediaries alike. By adopting a restrictive interpretation of the requirements, intermediaries may potentially steer clear of being held liable, even if they intentionally host misleading advertisements, therefore impacting consumer protection. On the other hand, an expansive interpretation may overwhelm digital platforms and disturb the equilibrium established by safe harbor safeguards, thus opening Pandora's Box.
It is imperative, therefore, that an all-encompassing definition of ‘advertising agency’ is adopted to clarify the scope of applicability for the SDC mandate while keeping the legislative intent in mind. Before delineating how an ad is set right, it is high time that the authorities determine who needs to set the ad right.
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