Consumer Law and Internet Advertising

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Internet Advertising Advertising is one of the major vehicles through which seller can make the consumers/customers aware of their existing/new products. With help of effective advertising, sellers can add new customers while increasing the sales to their existing customer base. Internet is a source of easy connects between sellers and buyers. Online advertising can be of any form including text message, interactive graphics, audio or visual messages. E-advertising has gained popularity among marketers as it endows the sellers with information on consumer buying pattern and accordingly they can design specific products and advertisements to target certain group of audience. But unfortunately this ease of collecting data many times results in frauds, identity theft or violation of customer privacy. Every nation’s legislation has certain rules and regulations protecting consumer and business from fraudulent and deceptive advertisements. E-advertisings are of no exceptions from this. Those rules and regulations help to maintain the credibility of the internet medium of promotions. The U.S. Federal Trade Commission (FTC) has published few guidelines on online advertising:
  • Advertising must tell the truth and not mislead the consumers
  • Advertisers must have substantial evidences to back up their claims
  • Advertisement must be fair
  • Every advertisement should have required disclaimers or disclosure. These should be very clear so that consumers are able to notice, read and understand those important disclaimers
  • Performance of the products being advertised should be demonstrated during the advertisement
  • Unhappy consumers should get the refund money promised earlier
FTC Act prevents unfair and deceptive promotions in any platform. Under Section 5 of FCT Act, an unfair or deceptive practice has been defined as the advertisement which is misleading or not giving full information regarding the product/service. Apart from above mentioned broad headers of advertisement rules, advertisements aimed at children need to follow the guidelines provided by The Children’s Advertising Review Unit (CARU) of the Council of Better Business Bureau. In India, for many years, advertisements were regulated by Govt. tribunal, court or police depending upon the nature of the disputes. Absence of a comprehensive legislation led various confusions both from the industry and the regulatory body perspective. In 1985, a self-regulatory authority, “Advertising Standard Council of India (ASCI)” was formed. Main objective of this authority was to ensure ethical practices in advertising. Body of ASCI has of Board of Governors, Customer Complaint Council (CCC) and Secretariat. It has members across relevant industries like advertising agencies, market research, consulting, business, education, lawyers, doctors, journalists etc. ASCI’s work is based on four basic principles i.e. Honesty, Decency, Responsibility and Fairness in advertising. Objectives of ASCI are pretty much similar to what we have seen for FTC:
  • Maintain image and trustworthiness of advertising
  • Protect against misleading advertising
  • Reinforce generally accepted standard of decency in advertisement
  • Avoid unacceptable practices from society’s point of view
If a person feels some advertisement is misleading or deceptive, he/she can directly approach ASCI with the complaint. ASCI follows several steps to cross check the validity of the complaints. In case the advertiser is found to be guilty, ASCI has the power to stop the specific advertisement. During mid of the year 2013, ASCI received complaints against 144 advertisement campaigns on misleading information. Some of the big giants in health and beauty products like Hindustan Unilever, Dabur, Reckitt Benckiser etc. were mentioned in that list. One of the examples was against Hindustan Unilever where Sunsilk Perfect Straight advertisement showed that the shampoo could keep the hair perfectly straight after attending gym session or party. Customer Complaint Council (CCC) found that the advertiser could not substantiate the message and therefore, they sustained the complaint (Source: http://articles.economictimes.indiatimes.com/2013-08-23/news/41440553_1_asci-national-advertising-monitoring-service-complaints-council). Online retailer Snapdeal.com advertised on heavy discounts on October 6, 2014. ASCI mentioned this advertisement as false and non-substantiated by the retailer as the items which were on discount, were not available for the buyers (Source: http://articles.economictimes.indiatimes.com/2015-01-05/news/57705281_1_customer-complaints-council-narsee-monjee-institute-nissan-motor-india). Recently ASCI has announced the launch of a mobile app through which consumer can lodge complain against misleading advertisement on internet and social media (Source: http://articles.economictimes.indiatimes.com/2015-03-19/news/60286550_1_asci-advertising-standards-council-new-mobile-app). However, ASCI only acts as a moral support group in the protection of consumers’ choice from unethical/untruthful advertisements. Advertiser, if not satisfied with ASCI corrective measures, can take the concern to statutory authorities. There are several examples of these kinds of incidents. On 18th December 2014, ASCI gave order to e-commerce site Amazon to withdraw/modify their claim as “largest online retail store”. But following Amazon’s plea, Delhi High Court directed ASCI not to enforce that till January 5, 2015 (Source: http://articles.economictimes.indiatimes.com/2014-12-29/news/57494962_1_advertising-standards-council-asci-amazon). India having both advertising law and the self-regulatory body ASCI, creates confusion and delay in judgments many times. Advertisement law in India (especially with the surge of online business) seeks more attention to be full proof to protect consumer and business interest. References:
  1. http://psalegal.com/upload/publication/assocFile/TMTBulletin-IssueXIV.pdf?utm_source=Mondaq&utm_medium=syndication&utm_campaign=View-Original
  2. https://www.ftc.gov/system/files/documents/plain-language/bus28-advertising-and-marketing-internet-rules-road.pdf
  3. http://www.verio.com/resource-center/business-guides/internet-law/
http://www.legalservicesindia.com/article/article/legal-protection-of-consumers-1463-1.html
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