JOURNALISM

JOURNALISM-II
SEMESTER-IV

A RESEARCH PAPER ON:

An Analysis on Misleading Advertisement and its Impact on the

Consumer in India

SUBMITTED TO:
Prof. Khushboo Dua
NMIMS School of Law

SUBMITTED BY:
Satyam Malakar B017,
BA.LL. B, DIVISION-B

ABSTRACT

Kirit P. Mehta School of Law 1

 JOURNALISM

In today's society, the media plays an essential part in consumers' product choices. To cash in on
the opportunity, many manufacturers are increasing their advertising budgets. As a result, product
prices are rising, and consumers are finding it increasingly difficult to distinguish between real and
mis-leading marketing. As a result, the judiciary is attempting to protect consumers' rights from
misleading marketing through several legislation. Furthermore, the product's terms and conditions
will be written in small fonts, making it difficult for a wise individual to decipher the details. Also
in markets, a significant number of duplicate things were started for the trade at low prices, putting
the consumer in a bind to discover out what the real product is. This makes it easier for
manufacturers to make money by selling duplicate goods to consumers.

In this paper the researcher explains the definition of mis- leading advertisement, the legislation
that prohibits mis-leading advertisements, Economic Analysis, the role of Indian Judiciary,
International perspective on Mis-leading Advertisements, a few advertising issues and suggestions
for dealing with these issues.

INTRODUCTION

Today, advertisements are crucial in influencing buyers to buy items and services. On the other
hand, the costs of advertising in most businesses are astronomical when compared to the costs of
other operations. Every business nowadays aspires to have the largest market share. To do this,
each company employs a variety of strategies to attract clients from various market sectors and to
position itself as the industry leader. In this difficult environment, a company's products should be
promoted in such a way that more and more customers get interested in them. Marketing operations
in today's business environment are centered on the relationship between a company and its
customers.

Advertising has long been recognized as a popular management tool for coping with today's
competitive markets' rapid technical and marketing changes, and this management tool refers to

Kirit P. Mehta School of Law 2

 JOURNALISM

the re-analysis and re-design of both internal and external activities and processes. Businesses may
utilize science, skill, and experience to discover the best and most relevant techniques for
influencing customer preference for online transactions and employ them in their marketing
process.

Marketing encompasses all operations that are required to determine market needs and wants,
arrange product availability, successfully transfer product ownership, provide physical
distribution, and enable the entire marketing process. It's a form in which price-setting mechanisms
are active and where title swaps are facilitated by physical mobility.

MIS- LEADING ADVERTISEMENT AND ITS IMPACT

Definition: Section-2(28) of Consumer Protection Act,2019 states that “misleading

advertisement” in relation to any product or service, means an advertisement, which—

(i) falsely describes such product or service; or

(ii) gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance,
quantity or quality of such product or service; or

(iii) 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

(iv) deliberately conceals important information 1

As per the Ministry of Consumer Affairs, “Any advertisement or promotion through Television,
Radio, or any other electronic media, Newspapers, Banners, Posters, Handbills, wall-writing etc.
to misrepresent the nature, characteristics, qualities or geographic origin of goods, services or
commercial activities so as to mislead the consumer could be broadly defined as a misleading
advertisement.2”

IMPACT

1 Consumer Protection Act,2019

2 Meaning of Mis-leading Advertisement, https://consumeraffairs.nic.in/more/misleading-advertisements

Kirit P. Mehta School of Law 3

 JOURNALISM

In every country, advertising has shown to be a development engine, a key input for economic
change, and a critical aid for social usage. Advertising is a growing, dynamic, and often
challenging industry. It changes as market conditions, lifestyles, distribution systems, and
consumer behaviors change. Advertising is a social and economic entity that performs critical
functions. Indeed, advertising is multidimensional, and diverse segments of society are involved
depending on their distinct viewpoints.

The advertising business is a social institution that was established to address human need for
product, brand, and service availability information. In the business sector, advertising serves
two goals. One is a competitive job that requires the creation of a distinct consumer.
Furthermore, the critical role of producing customers is critical. First and foremost, they created
a new product.

It's also a work of art, a science, a business, a financial organization, and a social one. Recently,
there has been a widespread belief that advertising is a kind of communication designed to
exploit customers. It is also frequently accused of being profit-driven, with business houses
being labelled as marketing shared for developing a perfected strategy for deceiving clients via
fraudulent advertising.

ECONOMIC ANALYSIS

Rent Wanting, which is defined as an entity seeking to increase their riches without contributing
to society's prosperity, may be used to explain the notion of advertisements in economics. Its
purpose is to gain financial advantages and benefits by altering the allocation of economic
resources. This method stifles economic efficiency by allocating resources inefficiently. It also
typically leads to a widening of economic disparities and a decrease in competitiveness.

According to this notion, manufacturers will set aside a portion of their resources in order to
entice customers. These resources are utilized for marketing purposes. Instead of spending those
resources for promotion and production, the cost of the product will be reduced, allowing the
majority of consumers to afford it, rather than just one class 3.

3 The Drugs and Magical Remedies (Objectionable Advertisements) Act, 1954

Kirit P. Mehta School of Law 4

 JOURNALISM

Advertisements are prohibited in India under the following laws:

According to section 29 of the Drugs and Cosmetics Act of 1940, anyone who utilizes any central
government test report for the purpose of advertising is subject to a fine.

The Medications and Magical Remedies (Objectionable Ads) Act of 1954 forbids misrepresenting
drugs in advertisements. It specifies that no one may participate in the publication of any
advertisement if it contains the following:

a) conveys a deceptive impression about the drug's genuine nature, either directly or indirectly;

b) makes a drug claim that is false; or

c) is otherwise deceptive or untrue in any important respect

• Section 19 of the Transplantation of Human Organs Act of 1994 specifies that anybody
who publishes an advertisement encouraging people to supply a human organ for payment
or offering to supply a human organ for payment is subject to imprisonment and a fine.
• Section 4 of the Prenatal Diagnostic Techniques (Regulation and Prevention of Misuse)
Act of 1994 forbids the advertising of prenatal sex determination.
• Section 36A (1) of the Monopolies and Restrictive Trade Practices (MRTP) Act of 1969
states that falsely representing goods or services or sponsorship, making any
misrepresentation, or failing to provide adequate warranty and guarantee to the goods and
services can be considered an unfair trade practice. It could be verbal or written.

The District Collector may inquire into or investigate complaints regarding violations of consumer
rights as a class, on matters relating to violations of consumer rights, unfair trade practices, and
false or misleading advertisements, within his jurisdiction, on a complaint or a referral made to
him by the Central Authority or the Commissioner of a regional office, and submit his report to
the Central Authority or the Commissioner of a regional office.

A complaint about a violation of consumer rights, unfair trade practices, or false or misleading
advertisements that harm consumers as a group may be submitted in writing or electronically to
any of the authorities, including the District Collector, the Commissioner of Regional Office, or
the Central Authority.

Kirit P. Mehta School of Law 5

 JOURNALISM

International perspective:

The Federal Trade Commission in the United States is made up of divisions of consumer
protection bureaus, with one of the divisional bureaus regulating fraud and misrepresentation. If
an advertisement is suspected of being deceptive, an inquiry is done based on the advertisement,
and the corporation is determined to be accountable. The commission's purpose is to prevent rather
than punish.

Canada: The Competition Bureau of Canada regulates deceptive advertising in Canada. False
material facts or deceptive representation are prohibited under this bureau. It also forbids the sale
of goods that do not have a minimum guarantee or warranty, as well as the introduction of goods
into the market without sufficient testing and the non-disclosure of set prices. The Bureau adheres
to tight guidelines when it comes to pharmaceutical drug advertising. Before a pharmaceutical
medicine advertisement is released, it must first be approved by the bureau, after which it will be
published. The bureau will review the advertisement's substance before approving its publication.

The Consumer Protection from Unfair Trading Regulation, 2008, regulated ads in the United
Kingdom. The regulation establishes four criteria for deciding whether or not an advertisement
is misleading. These are the ones:

→ In violation of professional standards of care,

→ False or misleading behavior in regard to a set of essential factors
→ Material information is missing (unclear or untimely information)
→ Harassment, extortion, or undue influence are all examples of aggressive behavior.

Authorities, on the other hand, have distinct criteria that vary by country.

Judicial Approach with respect to Misleading Advertisement :

Kirit P. Mehta School of Law 6

 JOURNALISM

♦ In M.R. Ramesh versus M/S Prakash Moped House and Others 4, the plaintiff purchased a
new Hero Honda cycle based on an advertising that said the bike would get 80 kilometers
per liter. The bike's mileage after purchase is only 58 kilometers per liter. In this instance,
the court warned that using fine print to conceal important information would be
considered deceptive. The court ordered the company to pay the plaintiff Rs.25,000 in
damages and advised the manufacturers that marketing should not be misleading and
should clearly depict the quality of the goods sold.
♦ In Buddhist Mission Dental College and Hospital vs. Bhupesh Khurana and Ors 5, the
college advertised in the Hindustan Times newspaper, claiming that the college is
affiliated with Magadh University and the Dental Council of India, and that there is no
capitation fee for admissions. After joining the college, eleven students filed a complaint
with the NCDRC, alleging that the college collected Rs.1,00,000 in capitation fees during
the admission process and refused to submit a receipt for the same. The management
threatened to terminate the admission if the receipt was not provided. Furthermore, the
college was not associated with Magadh University or recognized by the Indian Dental
Council.
♦ In the case of Dr. M. Kumar against Vijay Kumar Srivastava, the complainant's son has a
tooth condition, with two additional teeth adjacent to his normal teeth. The complainant
viewed the doctor's advertisement, which said that he holds a BDS degree. After speaking
with the doctor, the boy's teeth were extracted four times instead of two, and the boy
was promised new teeth within three weeks, which did not occur. As a result, the father
launched a lawsuit against the doctor, alleging that the doctor is treating patients with a
forged degree. According to the research, the doctor holds a degree in alternative
medicine rather than allopathic medicine. As a result, the court granted the doctor
Rs.50,000 in compensation and Rs.5000 in costs, as well as ordering him to change his
designation from BDS to BDS (Alt.)

4 M.R. Ramesh vs M/S Prakash Moped House and Others, https://www.lawyerservices.in/MR-

Ramesh-Versus-MS-Prakash-Moped-House-and-Others-2003-05-02
5Buddhist Mission Dental College and Hospital vs. Bhupesh Khurana and Ors,
MANU/SC/0204/2009(India).

Kirit P. Mehta School of Law 7

 JOURNALISM

The Issues with respect of Advertisements:

Prices that are misleading: In typically, advertising show a lower price, but when the item is
purchased, the price of the item rises and differs from the advertised price.

Standards: Advertisements will present a high-quality goods with a large quantity, but when the
consumer purchases it, the quantity and quality will be reduced.

Labeling: In most cases, the product's weight label does not correspond to the product's real
weight.

Advertisements for Surrogates: When the government prohibits the sale of certain items that
harm the human body, such as tobacco and cigarettes, new products bearing the same name will
be put onto the market, owing to the fact that the banned product's name has a high level of
public recognition.

Public Personalities: Most manufacturers employ public personalities in their marketing, and as
a result, people blindly follow and buy the things that the public personality has advertised.

CONCLUSION

Manufacturers utilize a variety of strategies to scam consumers, including misleading advertising.

Consumers are in a position where they are unable to distinguish between the correct and
improper products as a result of these efforts. The Consumer Protection Act, which strives to
defend consumers' interests, is attempting to address this issue in a variety of ways. Both the
legislature and the judiciary are working to safeguard consumers against deceptive advertising.

SUGGESTIONS

• Many of the legislation were out of date and unable to address current concerns.

Kirit P. Mehta School of Law 8

 JOURNALISM

• Most laws punish imprisonment, fines, or both in the instance of deceptive advertising;
but, if they impose a severe financial penalty, it will serve as a deterrent to other
businesses.
• Any medicine commercial in Canada must first receive clearance from the Canadian
Pharmaceutical Advertising Advisory Board before being made public. This may make it
easier for customers to avoid picking the wrong medication. It is one of the most
innovative ideas that India can pursue.
• Because many commercials will display the terms and conditions in small print, the courts
should force the marketers to use a specific font size for their advertisements.
• Consumers must understand their rights and responsibilities.

REFERENCES

1. Abdul Ghafoor, Awan Muhammad Ismail, Captain Fauzia and Majeed Farisa Ghazal,
“Effects of Advertisement on Consumer’s Buying Behaviour with References to FMCGs in
Southern Punjab-Pakistan”, Journal of Marketing and Consumer Research, Vol. 19, pp. 22-
30, 2016.
2. P. Sathya and R. Indirajith, “A Study on Purchase Behavior of Consumer Durable Goods
with Special Reference to Tiruvarur District”, International Journal of Scientific Research
and Management, Vol. 6, No. 2, pp. 100-107, 2016.
3. Ashish Kumar and Poonam Gupta, “To Analyze Consumer Buying Behavior and
Preferences in the Home Appliances Market of Hailer”, International Journal of
Engineering and Technical Research, Vol. 3, No. 4, pp. 132-140, 2015.
4. K.T. Kalaiselvi and D. Muruganandam, “An Analysis on Purchase Behavior towards
Selected White Goods”, Asia Pacific Journal of Research, Vol.1, No. 23, pp. 80-90, 2015.
5. Samar Fatima and Samreen Lodhi, “Impact of Advertisement on Buying Behaviors of the
consumers: Study of Cosmetic Industry in Karachi City”, Journal of Marketing and
Consumer Research, Vol. 19, pp. 22-30, 2015.

Kirit P. Mehta School of Law 9

 JOURNALISM

Kirit P. Mehta School of Law 10