Advertisement

Law

Prof. Madabhushi Sridhar

A satisfied
customer is the best advertisement-
(American Saying)
Brand Management
 “I have learnt that you can‟t have good
advertising without a good client, that you
can‟t keep a good client without good
advertising, and no client will ever buy
better advertising than he understands or
has an appetite for”- Leo Burnett, “100
LEO‟s, Chicago, IL
Global Advertising
 There will presently be no room in the
world for things; it will be filled up with the
advertisements of things --William Dean
Howells
 Print, Radio, TV and internet advertising…
all the four exist and flourish
 TV advertising is costly but very effective
 India - Advertising
 Indian market is one-sixth of global market,
with one billion population, is very
attractive.
 Hindustan Lever alone spent Rs. 700 crore
per year on advertisements in 1998.
 Dishonest in advertising
 “It is flagrantly dishonest for an advertising
agent to urge consumers to buy a product
which he would not allow his own wife to
buy”
 says David Ogilvy,
 (Confessions of an advertising man)
 Boring ads
 I am one who believes that one of the
greatest dangers of advertising is not that of
misleading people, but that of boring them
to death. – Leo Burnett.
 Heart
Attack
Did not.
But

BILLS
KILLED HIM
INSURE YOUR HEALTH
‘Mudra’ and its growth
 Started with one client VIMAL, Rs 35000
W Indies, Viv Richards “Only Vimal”
 In 2001, it reached Rs 714 Cr income
 Puli Raja ads for AIDs by Mudra
 Johnson and Johnson baby products
 I love you Rasna.
 AG Krishna Murthy, the CEO author of
Invisible CEO.
Right to advertise
 Its truth is more easily verifiable, driven by
profit motive, thus it has less protection
compared to non-commercial speech
 It has less to do with democratic self
governance or decision making process
 Every commercial organization has right to
promote and for that, right to advertise
 India:
Restrictions on Ads
 Ad involves commercial element, thus to be
guided by noble restrictions, all ads do not
relate to Freedom of speech and
expression of ideas. Article 19(1)(a)
 Advertisements to promote drugs can be
restricted. No propagation of magic
remedies be allowed. Hamdard Dawakhana
v UoI AIR 1960 SC 554
 Drugs & Magic Remedies
 The Drugs and Magical Remedies
(Objectionable Advertisements) Act, 1954
prohibits
 Ads of certain drugs S 3,
 Misleading ads s 4,
 Ads of magical remedies for treating certain
diseases and disorders, s 5
 Yellow Pages Case
 Commercial ad is also part of FoSE.
 No exclusive right to publish telephone
directory for Telecom department only
 Telecom has no copyright over its list of
subscribers.
 Tata has right to publish yellow pages and
secure advertisements as usual.
 Right to Ads from Govt
 There is no right to Ad from Government
 But, if Government has to advertise certain
information, every newspaper has right to
equitable distribution of ad revenue as per
norms under Article 14 of equality
 Govt cannot deny ads on ground of adverse
criticism, it affects Art 19- Dainik Samband
v State of Tripura 1989
 Eenadu Case
 Congress Govt denied due share of ads to
Eenadu, Ushodaya publications challenged
such denial, High Court held that state has
duty to distribute ad revenue equitably
among eligible newspapers. 1981
 Denial for adverse criticism is not
constitutionally valid. Mian Bashir v J K
AIR 1982 JK 26
 Advertisement and Law
 Advertisement is an invitation to offer,
which will not create any right until
accepted, SPC Engineering Co v UoI, AIR
1966 Cal 259 (Contract Act,1872)
 Encouraging some one to engage in a crime
by advertisement is an offence, for
procuring obscene object is an offence 292
imprisonment and fine, IPC
 NGOs PIL 2003
 Govt ads. carry photos of leaders
 Using public money to gain personal
political mileage in government ads, it
violates Articles 14, 21, arbitrary executive
action that undermines liberty of the
citizens. Remedy in Supreme Court, under
Article 32.
 Govt of India replied
 After all 60% of the Govt. ads deal with job
recruitment, public tender and notices.
 Ads are not done for personal publicity but
for informing junta about sarkari schemes
named after *you know who*
 That way, junta can make informed
decisions.
 SC order in 2014
 Canada, Australia regulate Govt. ads and
prevent their abuse.
 public awareness purpose vs ads have
political motive.
 Committee under N.R.Madhava Menon*
studied best practices across the world and
recommended guidelines for sarkaari-ads,
and about use of photos of leaders.
 Guidelines
 Stop glorification of political figure or party in power-
especially on the eve of elections.
 Donor publish photos political leaders (except
President/Prime Minister or Governor/Chief Minister)
 Donor name of the political parties including ruling
party.
 No political symbol/logo/flag.
 No website links to political parties or political leader.
 No attack on opposition parties.
 What to publicize?
 Ads related to government responsibilities, public
safety, awareness.
 maintain political neutrality. Display message in
objective and fair manner.
 Prior to elections, display no Government ads,
except following:
– Law and order related
– Public health, disaster precaution, safety advisories
– Job applications, tender-contract advertisements
 Anniversaries
 During Nehru, Gandhi or xyz anniversary,
multiple ministries, departments and PSUs
run separate advertisements, thus wasting
public money. For such anniversaries/
commemorations, issue only single
advertisement.
 Additionally: setup an Ombudsman to
check violation of these guidelines.
 IPC
 Young Persons (Harmful Publications) Act 1956,
Advertising harmful material is an offence
 Prize Competition Act, 1955 Prohibits prize
competition if exceeds Rs 1000 value. Copy of
publication can be forfeited.
 S 293 prohibits sale, hire, distribution, exhibition
or circulation or attempt is offence. Ranjit D
Udeshi v Maharastra, AIR 1965 SC 881,
Obscenity defined.
 Tuffs Shoe
 Model Madhu Sapre faced a trial for
charges of obscenity and indecent
representation of women, along with Milind
Soman.
A photograph of the Tuff shoes
advertisement, in which Sapre had posed
nude with Soman, had appeared with a
news item in a newspaper on July 23, 1995,
sparking off protests.
 Obscenity
 Indecent Representation of women
(prohibition) Act, 1986, prohibits indecent
or obscene representation of ads and
material or photos. IPC also punishes.
 Transplantation of Human Organs Act,
1994 prohibits ads inviting persons to
supply human organs for payment or
offering to supply etc.
 Kamasutra
 Kamasutra Ads. Is it promotion of condoms
or sex itself? Asked PCI
 Symbolizing women as sex objects. Sunday
Magazine, Statesman, Debonair etc
published the series of Ads.
 Obscene, vulgar, or offensive to public taste
Advertising Standards Council of India,
also found it to be so. Ad withdrawn.
 Women as canvas
 90 % Ads are painted on the canvass of
woman‟s body. Fact is only 6% like them
 2 young ladies take part in an ad for a male
underwear.
 Sexual overtones in Ads may not sell-
Headlight vision survey revealed it.
 Dial a friend….
 PCI found ads inviting usage of a particular
phone number for „dial a friend and enjoy
suggesting obscene conversation, as
objectionable and wrote to
Telecommunication department to stop such
number connections.
 Can it stop Private Telephone connections
for that reason?
 Emblems and Names
 Emblems and Names (Prevention of Improper
Use) Act, 1950- prohibits use of a list of names
and symbols reflecting state or nation in
promotion of private business
 If business symbols reflect State symbol, they
have to alter the symbols
 Trade Marks Act 1999, False trade description to
any goods is offence, s 78 of 1958 Act.
 MRTP Act
 Advertising to promote monopolistic,
restrictive or unfair trade practice affecting
interest of any trader or consumer, the
Commission may restrain such activity or
advertisement.
 A trade advertisement with
recommendation of quality of goods to the
seller is not unfair SC held in Colgate case.
 Colgate Case
 Colgate Palmolive India Ltd complained to
MRTP Commission that Hindustan Lever
advertised their product “new Pepsodent”
claiming 102 per cent more germ fighting
capability than the „leading toothpaste‟.
 Alleged that such a campaign would
disparage the Colgate Dental Cream. HL
also made a similar complaint.
 Decision
 SC refused to interfere with
 interim order of MRTP Commission
 staying reference to anti-bacterial
superiority by appellant in
 Advertisements in print, visual and
hoarding media,
 without scientific proof
 ASCI Consumer Complaint
Council Directed
 Reliance Communications‟ unsubstantiated
claims of unlimited talk time.
 Offers were subject to certain conditions
which were not mentioned in the ads.
 TV commercials had to be withdrawn.
 Ad of LMN Juice by Parle Agro was also
discontinued as hinted at racism by
portraying an African national in a bad
light.
 Volkswagen
 Volkswagen also had to discontinue the
commercial for its car-Polo as it portrayed
violence against animals.
 Mocking Suicide
 Mental health charities, including the
Suicide Prevention Action Network, the
American Psychiatric Association and
Mental Health America, complained against
Volkswagen withdrawn advert for mocking
and exploiting the serious subject of suicide.
http://www.10ad.org/volkswagen-banned-commercial/
 Educational - misleading
 Ads by TIME Institute had to be withdrawn
by the institute as the ads did not
substantiate the claim of being 'No. 1
institute for GMAT at the time'.
 A claim by Education Matters on its website
about its association with the British Deputy
High Commission was unsubstantiated and
hence it was directed to withdraw the claim
from its website. Nov 24, 2010
 Career Launcher
 ASCI (CCC) upheld complaints against
three advertisements of Career Launcher
India for not substantiating claims such as
'highest success rate', 'number of students
taking tests' and 'being the most successful
trainer in Mumbai'. The company could not
substantiate any of the claims with data and
hence the CCC asked for the ads to be
withdrawn or modify. Nov 24, 2010
 False Representation
 That goods/services are of a particular standard,
quality, quantity, grade, composition, style or
model
 That rebuilt or second hand as new
 That goods have uses or benefits, without
 The need of and usefulness of
 That give warranty, guarantee of performance,
efficacy of life without adequate test or proof
 Misleading
 A warranty or guarantee or promise to
replace, if it is materially misleading
 Misleading the public concerning price
 Misleading facts disparaging the goods
 In wrapper, accompanying article or ad in
newspaper
 Gift: but fully or partly covered by price
 MRTP Amendment 1991
 Widened the scope of definition of unfair trade
practice. It is general and inclusive
 Emphasis is on method or deceptive practices,
which are inserted in 1991
 Intentional delay in supply of goods causing
discomfort to consumer is unfair (Om Prakash v
Asst Engineer, Haryana Agro Indu Corpn (1994)II
CPR 9 SC
 Loss or injury to consumer is no more essential to
make provider liable. (excluded in 1991)
 Some misleading ads
 Ravi Foundation‟s claim that it‟s diet for pregnant
woman leads to baby of choice
 New Height: tall claim about increasing height
 Universal Luggage‟s unfounded growth
projections, unrealistic, over optimistic
 Kareer College: pass directly under the coaching
and guidance of most reputed professors… failed
to furnish their names.
 Unfair claims
 Acupressure Therapy Health Center‟s claim
that use eight minutes twice the acupressure
sandals and walk away one‟s ill-health
 Balmer Lawrie & Co: invited tenders for
sale of seven cars within 15 days, but closed
two days earlier saying „holidays‟.
 Loose weight within specific period,
without proper test.
 Paracetamol
 Burroughs Welcome (India) Ltd claimed
that its “Ridake Paracetamol” as safest way
to clear headaches without side effects,
supported by article in British Medical
Journal, which approved it. But its view that
it adversely affects liver was suppressed.
Held unfair.
 Exaggerated claims of Ayurvedic drugs.
 False representations
 Old as „new‟. „New‟ means not old, not
second hand, not used. But the old models
though unused passed off like latest models
 Bargain Bonanza in Fashion Footwear
 Falsity about sponsorship like electric
machine approved by State Electricity
Board, fire extinguisher sponsored by Fire
Commissioner etc.
 50% rebate
 Goods worth of Rs 100 now for Rs 50 is
prohibited. Is it his earlier price or current
price, fifty percent of which price is
offered? It is ambiguous.
 Lotteries and Contest
 Unfair, prejudicial to public interest
 Tends to induce to buy on consideration other than
quality and price, prizes help miniscule number of
consumers benefited and others suffer (Avon
Cycles case)
 Encourages gambling instinct
 Free gift: terms must be clear etc. may not be
regarded as unfair, if stocks of gift are available in
sufficient quantity. Fair disclosure is must.
 Withholding final results is unfair
 Medium not liable
 Explanation under 2(1)(r) clause (1),
statement would be deemed to be statement
made public by, and only by, the person
who caused the statement to be so
expressed, made or contained.
 Thus owners, or managers of medium such
as newspaper, radio TV or owner of house
where hoarding is fixed, not liable.
Alcohol Advertisements
 Criminal Sanctions
 Against cigarette and wines advertisements
 But they indulge in surrogate
advertisements, they sell tea shirts with
popular cigarette brand names, wines
companies sell bottled water.
Unscientific
Pepsi Campaign
Publicity
Through
Apology
Thums Up controversy
Liability of brand ambassadors
 Popular brand ambassadors endorsing the
safety of products, such as Chiranjeevi.
 Former director of Institute of Preventive
Medicine also endorsed Thums up.
 It received a political opposition and
criticism from Jana Vignana Vedika.
 If something goes wrong they should be
liable.
 Adulteration Act
 Prevention of Food Adulteration Act, 1954,
A signboard or advertisement indicating a
commodity of a particular nature, substance
or quality, the seller would be guilty even
though no standard of purity is prescribed,
if it is adulterated.
 Prize Chits Act
 Prize Chits and Money Circulation Schemes
(Banning) Act, 1978, S 5 penalises
advertisement of any prize chit or money
circulation scheme in contravention with
provisions of this Act.
 Drugs and Cosmetics Act, 1940 prohibits
use of report made by Central Drugs Lab or
Govt analyst for ads, fine of Rs 500
 Consumer
Protection Act 1986
 It protects consumers from unfair trade practices.
Deficiency in advertisement can be a cause of
action under this Act. Complainant wanted
publication of ad for sale of property on Sunday. It
came on Tuesday. His allegation that property sold
under value because of Ad, was rejected by
Forum, A MohanReddy v Venkataramanareddy,
1986-96 Consumer 1961 (NS) (Udayam
Newspaper case)
 Representation
of People Act 1951
 Campaign during a prescribed duration
before polling is prohibited by Act. It also
prevents the display or propagation of any
election matter, s 126:
 It imposed a condition that name and
address of publisher and printers to be
printed on the face of pamphlet, s 127A.
 Ads in newspaper are not banned.
 Motor Vehicle Act
 Any ad similar in appearance to a traffic
sign as to be misleading or likely to distract
the attention or concentration of the driver
can be removed by a police officer(SP) if
empowered by notification in official
gazette by State Government.
 National Housing
Bank Act 1987
 S 35 prohibits soliciting of deposits by
unauthorized persons
 Prenatal Diagnostic Techniques (Regulation
and Prevention of Misuse Act, section 22
prohibits ads relating to such tests,
punishable with 3 yrs imp and fine up to Rs
10,000.
 DP Act prohibits dowry soliciting ads.
 Companies Act
 S 58A mandates that companies cannot
invite deposits from public unless ad
contains a statement of financial position
 SEBI (Prohibition of Fraudulent and Unfair
Trade Practices relating Securities Market)
Regulations, 1995 prohibits misleading ads
to induce sale or purchase of securities,
prohibits misleading statements/information
 Advocates Act
 S 35 prohibits ads soliciting work by
advocates. Similarly Medical Council of
India Act prohibits such ads.
 With globalization of services GATS,
norms of advertising is changing.
 Cable TV Act
 No person shall transmit or retransmit through a
cable service any ad unless such ad is in
conformity with the prescribed advertisement
code, s 6
 It will not apply to foreign satellite channels which
can be received without the use of any specialized
gadgets or decoder.
 S 67 of ITAct, 200 prohibits obscene publication
on internet.
 Defamation
 Ordinary liability for Defamation if the
material affects of reputation of others, will
be there for commercial speech also.
 Criminal liability for defamatory
advertisement is there under Section 499
and 500 of IPC
 Claim for damages can be made in civil
court for defamatory advertisement.
 Contempt of Court
 The contents of an advertisement should not
lead to contempt of court.
 Courts have power to either take action suo
motu or on complaint for advertisements if
they result in contempt of court.
 Contempt of Court Act, 1973 is applicable
to commercial speech also.
 Privacy
 The advertisement cannot contain any
invasion of privacy of any individual
 Advertisements endorsing the products will
amount to consent for use of name,
signature or photographs of that person
based on contract
 Modeling is also governed by ordinary
principles of contract law.
Life made miserable for Ansari
Subject matter of exhibition
Request unheeded
 Press Council of India
 PCI has authority to censure newspapers for
unreasonable and obscene ads and writings
 Two photos: Roman Catholic Priest kissing
a nun, 2) two children embrace wherein the
white child is depicted as angel and black as
devil. Ad for Benetton garment maker in
Illustrated Weekly of India, 1991. Censured
for insulting, defamatory and racist ad.
 Ahaar:
Not in good taste
 Lord Krishna folding a Dosa in his hands like a
flute and saying “Come Radhika come for the
largest Dosas in town”
 Lord Shiva with hot cup of beverage saying:
“Bom…Kulcha Garam..”, Lord Vishnu with idly
in one hand, vada in another, pudding in third, and
hot cup of beverage on fourth and saying: Vada,
Kachori, Uttappam…my favorite prasadam.
 Telegraph, Sanmarg, English and Hindi dailies
published series of ads in Dec 1988. Regretted.
 US CAN-SPAM Act of 2003
 The CAN-SPAM Act of 2003 (Controlling
the Assault of Non-Solicited Pornography
and Marketing Act) establishes
requirements for those who send
commercial email, spells out penalties for
spammers and companies whose products
are advertised in spam if they violate the
law, and gives consumers the right to ask
emailers to stop spamming them.
 FTC Act US
 The Federal Trade Commission Act allows the
FTC to act in the interest of all consumers to
prevent deceptive and unfair acts or practices. In
interpreting Section 5 of the Act, the Commission
has determined that a representation, omission or
practice is deceptive if it is likely to:
 A) mislead consumers and
 B) affect consumers' behavior or decisions about
the product or service.
 Bait advertising
 Alluring but insincere offer to sell a product
which the advertiser in truth does not intend
to sell, an unfair trade practice (FTC)
 Misrepresenting nature of product: to
publish „unabridged‟ and complete and
unabridged‟ books and „full length‟ novels
but substantial portions from original texts
have been deleted.
 Bargain Price
 Offers attractive „bargain price‟ and invites people
to spend their time at their premises with a mood
to purchase, and then switch focus to a different
and usually more expensive product. Sale
resistance of such customer is weakened under
high pressure salesmanship leading to imprudent
purchase.
 Diversion of customer‟s fund in detriment to his
interests.
 FTC Act
 In addition, an act or practice is unfair
if the injury it causes, or is likely to
cause, is:
 substantial
 not outweighed by other benefits and
 not reasonably avoidable.
 Agencies, web designers
also liable
 Sellers are responsible for claims they make
about their products and services. Third
parties - such as advertising agencies or
website designers and catalog marketers -
also may be liable for making or
disseminating deceptive representations if
they participate in the preparation or
distribution of the advertising, or know
about the deceptive claims.
 Advertising directed to
children
 Children may have greater difficulty evaluating
advertising claims and understanding the nature of
the information you provide.
 Sellers should take special care not to
misrepresent a product or its performance when
advertising to children.
 The Children's Advertising Review Unit (CARU)
of the Council of Better Business Bureaus has
published specific guidelines for children's
advertising that may be helpful
 Illegal Ads, UK
 Lotteries, inciting persons to bet, inviting a person
under eighteen through an ad to make a bet or
wager or to borrow money
 Issuing ads without authority of election agent,
Offence of printing pamphlet without names and
address of printer or publisher in elections.
 Indecent or obscene ads in contravention of Sex
Determination Act, 1975, or Race Relations Act,
1976
 Prohibited Ads in UK
 Indecent Advertisement Act, 1889, Unsolicited
Goods and Services Act, 1971
 False description of food, drugs, medical treatment
 Medicinal products procuring miscarriage of
women, or for treating diseases like TB, Cancer
etc without doctor‟s instructions, etc.
 Restricted ads relating to adoption, maintenance of
children
28 b dollars Punitive Damages
 Los Angels county superior court granted Betty
Bullock with lung caner (64), $ 28b
 She started smoking at 17, under the influence of
Phillips Morris Ad campaign „improperly
influencing‟ her to smoke. Conspiracy of 1950s
campaign of lies concealing dangers of smoking.
 33,000 times more than compensatory damages.
 750,000 $ for economic damage and 100,000 $ for
pain and agony, etc.