Updates to Indian Advertising Laws – Lexology

India’s advertising landscape has changed significantly since 2019 when a new consumer protection law was passed. On June 9, 2022, the CCPA released the Guidelines for the Prevention of Misleading Ads and Clearances for Misleading Ads, 2022 (“Guidelines”) which prohibit ‘misleading advertising’. Guidelines are available here.

New guidelines against misleading advertisements

The detail of the guidelines (among others) elements of misleading advertisements, bait advertisements and regulate free advertisements, advertisements directed to children, including the conditions to be met for the distribution of bait advertisements, disclaimer requirements, and also prohibit advertisements of substitution.

  • Terms of non-misleading advertisements: Ads are considered misleading if they are (among others) (i) not honest, truthful; (ii) mislead consumers as to the specifications of the advertised product/service (eg, quality, price, scientific validity, etc.); (iii) claims of endorsement in advertisements cannot be supported by independent research; (iv) decrease the level of risk associated with the product/service, etc.

  • Bait Ads: These have been defined as advertisements that seek to attract consumers to a product/service by offering low prices. The Guidelines state that such advertisements should only be shown if (among others) there is (i) a “reasonable” prospect of selling the advertised product/service; and (ii) advertiser has verified adequate inventory of such products/service provider’s ability to meet foreseeable consumer demand; (iii) the advertiser affixes all the reasons which, in their opinion, could have an impact on the supply of advertised products/services (for example, the estimated demand exceeds the supply, geographical restrictions on the product, etc.) .

  • Free ads : Products/services must not be advertised as “free”, “no charge”, in the event that they involve costs other than the costs incurred by the potential consumer to take advantage of the free product/service by responding to this advertisement. Additionally, the use of the term “free trial” is restricted for offers related to non-refundable purchases.

  • Advertisements targeting children: The guidelines list advertising content that should not be directed at children and/or broadcast during programs intended exclusively for children, including a direct urge to purchase goods or services. Initially, it was clarified that advertisements should not invoke a negative body image in children and undermine natural or traditional foods.

  • Prohibition of alternative advertisements: “Alternate advertisements” have been defined as circumventing the ban on advertisements of certain prohibited products/services by advertising other products/services that are not prohibited by law. The Guidelines prohibit the broadcast of any form of surrogate or indirect advertising and establish the test for surrogate advertising. However, mere use of the brand name of a company that markets the advertised products/services in advertisements that do not violate the guidelines is permitted.

  • Regulation of influencers and endorsers: The guidelines also list the obligations of a manufacturer, service provider, advertiser, endorser and advertising agencies with respect to advertisements, as well as due diligence obligations for the approval of advertisements. Endorsers, in particular, face new requirements to disclose material links between the endorser and the manufacturer/advertiser, which can undermine the credibility of the advertisement.

What does that mean: The guidelines establish a comprehensive regulatory framework for misleading advertisements and also give the regulator teeth for enforcement. Posting advertisements deemed to be misleading is punishable by imprisonment of up to 2 years and/or a fine of INR 1,000,000 (approximately 12,174 Euros) and/or non-compliance may result in the initiation of investigations/investigations for violation of consumer rights. .

Advertising notice for online betting

In parallel, the MIB issued an opinion on online betting advertisements on June 13, 2022 and can be consulted here.

The notice reiterates the obligation of private satellite broadcasters to continue to adhere to the guidelines on online gambling advertising issued by the Advertising Standards Council of India.

  • Print and electronic media at refrain to publish advertisements of online betting platforms; and

  • Online social media platforms, advertising intermediaries and publishers for do not display advertisements on online betting platforms in India or aimed at an Indian audience.

What does that mean: Although the advisory refers specifically to online betting, it adds to existing caveats regarding online gambling platforms in India.

The developments may have profound implications for the retail sector, and their true impact will become evident in the coming days.

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