1. Misleading Advertisement Under CPA 2019
"Misleading Advertisement" means an advertisement which falsely describes a product or service, or gives a false guarantee or is likely to mislead consumers as to the nature, substance, quantity or quality of the product/service, or conveys an express or implied representation which would constitute an unfair trade practice, or deliberately conceals important information. [Section 2(28)]
1.1 Elements of Misleading Advertisement
- False description: Inaccurate representation of product characteristics
- False guarantee: Unsubstantiated warranty claims
- Likely to mislead: Creates false impression even if not literally false
- Unfair trade practice: Representation constituting unfair practice
- Concealment: Hiding important information from consumers
1.2 Categories of Misleading Claims
| Category | Examples |
|---|---|
| Quality claims | "100% pure", "best quality" without substantiation |
| Efficacy claims | "Guaranteed weight loss", "instant results" |
| Price claims | Fake discounts, inflated MRP |
| Origin claims | False claims about country of origin |
| Endorsement claims | Fake reviews, paid testimonials as genuine |
| Safety claims | "Completely safe", "no side effects" |
2. ASCI Code and Self-Regulation
The Advertising Standards Council of India (ASCI) is a self-regulatory body that administers the ASCI Code for Self-Regulation of Advertising Content in India.
2.1 ASCI Code Principles
Five Principles
- Truthful and honest: Advertisements should be truthful and honest to consumers
- Not offensive: Should not be offensive to generally accepted standards
- Against harmful products: Should not be used for products hazardous to society
- Fair competition: Should observe fairness in competition
- No harm to individuals: Should not depict individuals in a harmful manner
2.2 ASCI Complaint Process
- Consumer files complaint with ASCI (online/email)
- ASCI reviews and sends to Consumer Complaints Council (CCC)
- Notice to advertiser for response
- CCC examines complaint and response
- Decision: upheld, not upheld, or modification required
- If upheld, advertiser asked to withdraw/modify
- Non-compliance reported to media/regulators
2.3 ASCI and CCPA Coordination
ASCI and CCPA have entered into a Memorandum of Understanding for coordination:
- ASCI refers serious violations to CCPA
- CCPA can direct ASCI complaints for suo motu examination
- Joint efforts against misleading advertisements
- Data sharing on complaint patterns
3. Influencer Marketing Guidelines 2022
The Department of Consumer Affairs issued "Endorsements Know-hows for Celebrities, Influencers and Virtual Influencers" in 2022, providing comprehensive guidelines for influencer marketing.
3.1 Key Requirements
Disclosure Requirements
- Mandatory disclosure of material connection with advertiser
- Disclosure must be clear, prominent, and easily understandable
- Use labels like "Ad", "Sponsored", "Paid Partnership", "Collaboration"
- Disclosure must be in same language as advertisement
- For video content, disclosure must be both visual and verbal
- Disclosure should not be hidden in hashtags or at end of post
3.2 Types of Material Connections
| Connection Type | Disclosure Required |
|---|---|
| Payment received | Yes - "#Ad" or "Paid partnership" |
| Free products/services | Yes - "Gifted" or "Complimentary" |
| Discount/promo codes with commission | Yes - Affiliate relationship |
| Employment/ownership relationship | Yes - Relationship disclosure |
| Travel/hospitality received | Yes - "Hosted by" or "Invited by" |
3.3 Due Diligence Requirements
- Celebrities/influencers must not endorse products they haven't used/experienced
- Must do due diligence to ensure claims are truthful
- Must not make claims about products beyond what advertiser can substantiate
- Reviews must be based on adequate personal experience
Influencer Liability
Under CPA 2019, influencers/celebrities can face: prohibition from endorsing for 1-3 years, penalties up to Rs 50 lakh for subsequent violations. The due diligence defense is available only if the endorser can prove they verified the claims being made.
4. Dark Patterns and Deceptive Design
The Guidelines for Prevention and Regulation of Dark Patterns 2023 specifically address deceptive design practices in digital commerce.
"Dark Pattern" refers to any practices or deceptive design pattern using UI/UX interactions that misleads users into doing something they did not intend to do or makes it difficult for users to express their actual intent through choice architecture.
4.1 Types of Dark Patterns
| Dark Pattern | Description |
|---|---|
| False urgency | Creating fake sense of urgency ("Only 2 left!") |
| Basket sneaking | Adding items to cart without consent |
| Confirm shaming | Manipulative language for declining ("No, I don't want to save money") |
| Forced action | Forcing users into unwanted actions (mandatory registration) |
| Subscription trap | Easy to subscribe, hard to cancel |
| Interface interference | Highlighting/hiding options to manipulate choice |
| Bait and switch | Advertising one thing, delivering another |
| Drip pricing | Hidden charges revealed only at checkout |
| Disguised advertisement | Ads disguised as content or search results |
| Nagging | Repeated prompts disrupting user experience |
4.2 Prohibition and Consequences
- All dark patterns are prohibited for e-commerce entities
- Violation treated as unfair trade practice
- CCPA can take action against violators
- Penalties under CPA 2019 applicable
5. Sector-Specific Advertisement Regulations
5.1 Healthcare Advertisements
- Drugs and Magic Remedies (Objectionable Advertisements) Act 1954
- No claims of curing specified diseases
- Prescription drugs cannot be advertised to public
- AYUSH products have specific guidelines
5.2 Food and Beverage
- FSSAI advertising regulations
- Health claims must be scientifically substantiated
- Specific rules for HFSS foods advertising to children
- Nutrition claims must comply with FSSAI standards
5.3 Financial Products
- SEBI guidelines for mutual fund advertisements
- RBI guidelines for banking product advertisements
- IRDAI regulations for insurance advertisements
- Mandatory disclaimers and risk warnings
Compliance Checklist for Advertisements
Before running an advertisement, verify:
- All claims are substantiated with evidence
- No exaggerated or misleading representations
- Required disclaimers are included
- Sector-specific regulations complied with
- ASCI Code principles followed
- Influencer disclosures are proper
- No dark patterns in digital advertisements
- Comparative claims are fair and accurate
- Testimonials are genuine and disclosed
6. Key Takeaways
Summary Points
- Misleading advertisement includes false descriptions, false guarantees, and concealment
- ASCI provides self-regulation through its Code for Advertising Content
- Influencer Guidelines 2022 require clear disclosure of material connections
- Disclosure must be prominent using labels like "Ad", "Sponsored", "Paid Partnership"
- Influencers must do due diligence and verify claims before endorsing
- Dark patterns are prohibited including false urgency, basket sneaking, confirm shaming
- Sector-specific regulations apply for healthcare, food, and financial advertisements
- Penalties up to Rs 1 crore for misleading advertisements
- Endorsers can be banned for 1-3 years for violations