CCPA issues detailed New Guidelines for Advertisements

The Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 hereafter known as Guidelines have been issued by the Central Consumer Protection Authority (CCPA) which were notified on 9 June 2022 vide notification number F. No. J-25/4/2020- CCPA (Reg). The guidelines have been brought into force with immediate effect that is the effective date is 09th June 2022.

The Guidelines have been crafted with a lot of details and seek to contain misleading advertisements and protect consumers from falling prey to unfair trade practices.

Salient Features of the notification are as follows –

A. Who is covered?

These guidelines shall apply to –

• all advertisements regardless of form, format or medium
• a manufacturer, service provider or trader whose goods, product or service is the subject of an advertisement, or to an advertising agency or endorser whose service is availed for the advertisement of such goods, product or service.

B. Conditions for non-misleading and valid advertisement.

– An advertisement shall be considered to be valid and not misleading, if – it does not mislead consumers by

• presenting untrue and dishonest representations
• exaggerating the accuracy, scientific validity or practical usefulness or capability or performance or service of the goods or product;
• presenting rights conferred on consumers by any law as a distinctive feature of advertiser’s offer
• suggesting that the claims made in such advertisement are universally accepted
• creating a false claim about the nature or extent of the risk to consumers’ personal security, or that of their family if they fail to purchase the advertised goods, product or service;
• advertisement shall not contain statements or visual presentations which directly, or by implication, or by omission, or by ambiguity, or by exaggeration are likely to mislead consumers about the product advertised, or the advertiser, or about any other product or advertiser

It ensures that the claims that have not been independently substantiated but are based merely on the content of a publication do not mislead consumers and complies with the provisions contained in any other sector specific law and the rules and regulations made there under.

In addition to the prohibited advertisements as set out in these guidelines, no advertisement shall be permitted which is designed, produced and published in respect of goods, products or services which are prohibited from being produced, sold or provided or which are prohibited from being advertised under any law for the time being in force or under any rules or regulations made there under.

Conditions for validation of advertisement in case there is a unintentional lapse in above guidelines by advertiser while carrying out mass manufacture and distribution of goods, products and services, provided–

• Such promise or claim is capable of fulfillment by a typical specimen of the product advertised;
• the proportion of product failures is within the generally acceptable limits;
• the advertiser has taken prompt action to make good the deficiency to the consumer.

C. Conditions for Bait Advertisements

A bait advertisement means an advertisement in which goods, product or service is offered for sale at a low price to attract consumers. There is no restriction on issue of bait advertisements however these have been subjected to certain conditions.

• There should be no inducement to purchase the goods/products/services at the offered lower prices.
• the advertiser should ensure that there is adequate supply of goods/products/services to meet foreseeable demand generated by offering the goods at lower price
• in case, there is any limited availability of goods/products/services, such advertisement shall state the grounds for non availability of stock, potential restrictions of geographies or age limit etc.
  Bait advertisement should not mislead consumers about the market conditions with respect to the goods/products/services at conditions less favorable than normal market conditions.

D. Prohibition of Surrogate Advertising

The guidelines have strictly prohibited surrogate advertisement which means an advertisement for goods, product or service, whose advertising is otherwise prohibited or restricted by law, by circumventing such prohibition or restriction and portraying it to be an advertisement for other goods, product or service, the advertising of which is not prohibited or restricted by law.

An advertisement shall be considered to be a surrogate advertisement or indirect advertisement, if it indicates directly or indirectly the goods, product or service whose advertising is prohibited or restricted by law or even uses any brand name, logo, colour, layout and presentation associated with such goods, product or services whose advertisement is prohibited or restricted. Further a brief clarification has, however, been given in the provision whereby a brand used for prohibited or restricted goods/services/products could be used for other goods so long as it does not otherwise violate these Guidelines.

E. Conditions for Free Claims Advertisements

A free claims advertisement claiming any goods, product or service to be free, without any charge to the consumer shall ensure to mention any hidden unavoidable cost which a consumer has to pay other than delivery charges and further shall indicate the extent of commitment that a consumer shall make to take advantage of a free offer

Moreover, the guidelines sets out the negative list to describe what shall not be considered as free product/service which includes if the consumer has to pay

• for packing, packaging, handling or administration of such free goods, product or service;
• the cost of response, including the price which the consumer has to purchase to take advantage of such offer, has been increased, except where such increase results from factors unrelated to the cost of promotion;
• the quality or quantity of the goods, product or service that a consumer shall purchase to take advantage of the offer has been reduced;
• not describe an element of a package as free if such element is included in the package price;
• not use the term ‘free trial’ to describe a ‘satisfaction or your money back’ offer or an offer for which a non-refundable purchase is required.

F. Children Targeted Advertisements

Advertisements with target audience of children or featuring children should ensure that the conditions laid down in these guidelines are followed in letter and spirit. The inexperience and credulity of children is not taken undue advantage off and include that such advertisements shall not:

• condone, encourage, inspire or unreasonably emulate behavior that could be dangerous for children;
• claim any health or nutritional claims or benefits without being adequately and scientifically substantiated by a recognized body;
• be such as to develop negative body image in children including any harm to physical and mental health of children
• exaggerate the features of goods/products/services in a manner so as to lead children to have unrealistic expectations, feels inferior, persuading their parents in buying certain products,
• feature children for advertisements prohibited by any law for the time being in force, including tobacco or alcohol-based products;
• feature personalities from the field of sports, music or cinema for goods/products/services, which under any law, requires a health warning or cannot be purchased by children.
• Not create visuals to fantasize children for any product making it difficult to distinguish real life situations
• exploit children’s susceptibility to charitable appeals and shall explain the extent to which their participation will help in any charity-linked promotions;
• claim that consumption of a product advertised shall have an effect on enhancing intelligence or physical ability or bring exceptional recognition or health or nutritional claims or benefits without any valid substantiation or adequate scientific evidence
• be published in any mass media, including advertisement on network games in respect of medical services, drugs, dietary supplements, medical instruments, cosmetic products, liquor or cosmetic surgery which are adverse to the physical and mental health of children.

The Guidelines also lay down that an advertisement for junk foods, including chips, carbonated beverages and such other snacks and drinks shall not be advertised during a program meant for children or on a channel meant exclusively for children. Similarly, an impression cannot be given that the goods being advertised are better than the natural traditional food being consumed by children.

G. Guidelines not in derogation of other laws

These guidelines have been issued in addition to the existing laws regulating advertisements like the following –

• Press Council Act, 1978
• Cable Television Networks(Regulation) Act, 1995
• Code for Self-Regulation in Advertising

This list is exhaustive and not limited to the mentioned acts.

H. Disclaimers in Advertisements

The guidelines have set the parameters for using disclaimers in the advertisements. These disclaimers are may expand or clarify a claim or make qualifications or resolve ambiguities in order to explain details of claim, but such disclaimer shall not contradict the material claim made in the advertisement or contradict the main message conveyed by the advertiser or change the dictionary meaning of the words used in the claims received or perceived by a consumer;

Further the disclaimer shall not attempt to hide material information with respect to any claim made in such advertisement, the omission or absence of which is likely to make the advertisement deceptive or conceal its commercial intent and shall not attempt to correct a misleading claim made in an advertisement.

I. Requirements of Disclaimer in Advertisements

A Disclaimer in advertisement shall fulfill the following requirements, namely –

• shall be in the same language as the claim made in the advertisement
• the font used in a disclaimer shall be the same as that used in the claim
• the placement of the disclaimer shall be at a prominent and visible place on the packaging and ideally be on the same panel of the packaging as that of the claim
• if the claim is presented as voice over, the disclaimer shall be displayed in sync with the voice over and at the same speed as that of original claim made in the advertisement
• shall be as clear, prominent and legible as to make it clearly visible to a normally-sighted person reading the marketing communication once, from a reasonable distance and at a reasonable speed.
  The requirements and conditions of disclaimer are more or less in line with the ones defined in ASCI code.

J. Duties of Manufacturer, Service Provider, Advertiser and Advertising Agency

The guidelines enlist certain dos and don’ts for every manufacturer, service provider, advertiser or advertising agency to whom these guidelines apply.

Broadly categories, they shall ensure that all descriptions, claims and comparisons in an advertisement should be capable of substantiation and produce such substantiation if required by the Central Authority; while the source and date of independent research or assessment in cases where claims in the advertisement are expressly stated to be based on or supported by such research should be indicated.

The responsibilities further includes that parties to advertisement shall ensure that it should not contain any reference to a person, firm or institution in any manner which confers an unjustified advantage on the product so advertised or bring such person, firm or institution to ridicule or disrepute, unless requisite permission from the concerned has been obtained.

The advertisement should not use vague terminologies and should state facts, figures claims clearly. The same included advertisements inviting the public to take part in lotteries or prize competitions, it shall clearly set out all pertinent material terms and conditions so as to enable consumers to obtain a true and fair view of their prospects in such activities

Provided that such obvious untruths or exaggerations as are intended to amuse or catch the eye of consumers are permissible subject to the condition they are clearly seen as humorous or hyperbolic and not likely to be understood as making literal or misleading claims for the advertised product.

K. Due diligence required for endorsement of advertisements

The guideline introduced the terminology of An endorser who is an individual or a group or an institution making endorsement of any goods, product or service in an advertisement whose opinion, belief, finding or experience being the message which such advertisement appears to reflect.

Any endorsement in an advertisement must reflect the genuine, reasonably current opinion of the individual, group or organisation making such representation and must be based on adequate information about, or experience with, the identified goods, product or service and must not otherwise be deceptive.

Where, Indian professionals, whether resident in India or otherwise, are barred under any law for the time being in force from making endorsement in any advertisement pertaining to any profession, then, foreigner professionals of such profession shall also be not permitted to make endorsement in such advertisement. The guidelines also require endorser to disclose material connections with manufacturer, trader or advertiser which may likely impact the value and credibility of the endorsement.

Key Definitions –

Advertiser means a person who designs, produces and publishes advertisements either by his own effort or by entrusting it to others in order to promote the sale of his goods, products or services and includes a manufacturer and service provider of such goods, products or services;

Advertising agency means a person or an establishment providing services in designing and production of advertisements or other related services for a commission or fee;

The Guidelines have come at the time when it was the greatest need of hour. These guidelines have given wings to the self regulated rules laid down in ode for Self-Regulation in Advertising’ (ASCI Code). The terms and conditions are majorly based on the latter, removing ambiguity and vague interpretations.

The regime of advertising will see a dynamic turn around with these guidelines in place. The loose ends of advertisers playing with grey areas of ASCI code will be tightened. Further the essence of the guidelines lies in the applicability which states “all advertisements regardless of form, format or medium” covering all social media, influencers, pop up in internet platforms, which shall also be required to adhere to the regulations.

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