Author: mxmadmin

By A Correspondent

Close on the heels of the Advertising Standard’s Council of India’s announcement of the ad monitoring service that it is setting up along with TAM, Prof K V Thomas, Minister of consumer affairs, food & public distribution, has said that there is urgent need to update laws and improve enforcement to protect consumers from misleading advertisements as despite several provisions false and misleading advertisements continue to exploit the consumers and now have a wider canvas. He said that the widely accepted opinion is that both self-regulation and legal controls should work in synergy. Prof Thomas was addressing a national seminar on misleading claims in advertisements organised by the Department of Consumer Affairs with a view to protect the consumers from exploitation.

The full text of Minister’s address is given below:

“I welcome you all to this national Seminar on misleading claims in advertisements organised by the Department with a view to find a way to tackle or regulate them effectively so as to protect the consumers from exploitation. As you all know the Department of Consumer Affairs has started country-wide consultations with all stakeholders on this important matter to elicit their views in order to come to a consensus on what suitable measures could be put in place to regulate such misleading advertisements.

Advertisements have become a part and parcel of our lives today. However, it is necessary to use advertisements with caution to avoid a vicious effect on social values. Advertisements are a crucial aspect of any type of business because they promote products or let the public know about them. Consequently, when this route is exploited by unscrupulous businesses persons to mislead the public, then it may destroy the very image of advertising.

Though advertising is a useful tool to give information which are factual and accurate, questions are frequently raised whether it creates class consciousness, materialism, conspicuous consumption and other values which are not universally accepted. For most companies, the question is how often to communicate with the consumers. To reach the target markets advertisers sometimes overstep the legal and social norms.

The Constitution of India guarantees freedom of speech. Nevertheless, the government is authorized to regulate commercial advertisements. It can restrict deceptive, unfair, false and misleading advertisements. An advertisement is termed deceptive when it misleads people affecting the purchasing behaviour of the consumer. In India, advertisements for cigarettes, liquor, pan masala (chewed tobacco), products that are harmful to the public continue to find a place in the TV channels, despite the ban imposed by the Government of India.

Unfortunately despite several laws meant to protect consumers against such unfair trade practices, false and misleading advertisements continue to exploit the consumer. In fact such advertisements now have a wider canvas. While earlier, one saw them only in the print media, today you can see them on television, influencing a larger number of people and impacting even the illiterate. Proliferation of advertisements through television marketing networks promoting health cures, slimming and beauty gadgets of unproven value is a cause of great concern, because today the reach of television channels is phenomenal. And undoubtedly, the impact of the visuals on the television screen is far greater than the newspapers.

Outdated laws and poor enforcement of laws are the main reasons for the prevalence of any social malady and mal-advertising is no exception. The need of the hour, therefore, is better laws, their regular updation, improved enforcement and regular surveillance by the authorities. Widely accepted opinion is that both self-regulation and legal controls should work in synergy. In certain countries there are stronger legal controls over the advertising, for example in Scandinavia. On the other hand the industry`s self regulation is preferred in the Anglo-Saxon world. Needless to say, the social acceptability varies from one culture/country to another. At the end of the day “good taste or bad is largely a matter of the time, the place, and the individual”. It would be also probably impossible to set clear-cut and detailed rules in the era of Internet and interactive TV.

Therefore, I feel that both types of regulation should be applied with the ultimate aim of reaching balance between the sacred right of freedom of choice and information and minimizing possible widespread offence.

Probably the most controversial issue in the field of marketing communications is the content of advertisements. Three areas of interest in terms of ethical judgment of advertisements are “individual autonomy, consumer sovereignty, and the nature of the product”. The individual autonomy is concerned with advertising to children. Consumer sovereignty deals with the level of knowledge and sophistication of the target audience whereas the ads for harmful products are in the centre of public opinion for a long time. Advertising of hazardous products is even more harshly criticised when it is aimed at audiences with low individual autonomy, i.e. children. Children are not only customers, but also consumers, influencers and users in the family Decision-Making Unit. Additional difficulty is that they are too impressionable to be deciders. It is not a surprise then that “spending on advertising for children has increased five-fold in the last ten years and two thirds of commercials during child television programs are for food products”. In some countries like Sweden, Norway, Germany, Netherlands and Australia, there are harsh restrictions to the children advertising.

Advertising standards and self-regulation by the advertising industry is an important issue, particularly so in a country such as India where a majority of the consumers are in rural areas. To improve our record, we need to compare ourselves to the rest of the world. This does not mean that there is a global barometer which sets standards on which ads are offensive and which are not. If we go simply the number of ads for which the ASCI (Advertising Standards Council of India) receives complaints, then Indian advertising is of exceptionally high standards! Far fewer advertisements are hauled before the ASCI than the ASA (the Advertising Standards Authority of Britain). If the ASCI receive complaints in the hundreds, the ASA receives them in tens of thousands. In India, the number of complaints does not always give a true picture of the standards of advertising nor does it say anything about the level of consumer dissatisfaction. The reasons are low awareness level and apathy. The ASA, I am told, is also quite pro-active. It has conducted surveys of the national and regional press to check compliance with the ASA codes. Its results have been encouraging. 97 per cent of ads were found to comply with the codes in one such survey.

Section 2 (r) of the Consumer Protection Act gives a comprehensive definition of unfair trade practice and Section 14 deals with the directions that the court can give to deal with such practices. The consumer courts have given some excellent orders in this area, but they cannot deal with misleading advertisements like the MRTPC. For one, the consumer courts neither have the power nor the infrastructure to investigate, suo motto into misleading advertisement nor take up such cases on their own, as done by the MRTP Commission. Nor do they have an investigative wing like the office of the DG (Investigation and Registration) under the MRTP Act. The consumer courts can only adjudicate over complaints filed before them. However, the consumer courts can issue interim orders stopping such advertisements pending disposal of the case. They can give directions to the advertiser to discontinue such advertisements and not to repeat it. They can award compensation for any loss or suffering caused on account of such unfair trade practices, they can also award punitive damages and costs of litigation. Section 14 h (c) of the Act, describing the powers of the court, says that the court can order “corrective advertisement to neutralize the effect of misleading advertisement at the cost of the opposite party responsible for issuing such misleading advertisement”. In so far as misleading advertisements are caused, this is the most important provision and can really have a deterrent effect, if used effectively. Unfortunately, this provision has hardly or perhaps never been used.

Ladies and gentlemen, I have placed before you, a set of arguments and counterarguments so that the delegates, informed and involved stakeholders as they are, could further deliberate on them. In the end, I am hopeful that the outcome of these discussions would produce a consensual document delineating the steps leading to affirmative action, including legislative efforts if found necessary, without impeding the freedom of responsible speech. Because, the need of the hour is a strong signal to the people of the country that the sovereignty of the consumer is nonnegotiable and they will not be allowed to be taken for a ride. Equally important is to tell the comity of nations that India, as an emerging economy and a promising market is fully committed to ensure, protect and uphold consumers’ interest and rights”.

The seminar was attended by representative of State Governments, various Central Ministries, the Advertising Standards Council of India and consumer bodies.