Tuesday, April 5, 2011

ADVERTISEMENT LAWS OF INDIA- ITS TIME FOR A UNIFORM LEGISLATION


“Advertising is the foot on the accelerator, the hand on the throttle, the spur on the flank that keeps our economy surging forward”
Robert W. Sarnoff

            We live in the era of globalization where new products are being marketed within a splash of time. So in this competitive environment, every representation of a product or service is unique and is all about what ‘others are not’. These practices indeed raise questions about truthfulness and fairness of representation of products and services. If a person is about to start a business, even it’s a product or service or magazine or newspaper, the first thing he look into it is how he can market it. The basic idea behind advertising is that it is just a presentation, which may be oral or written, to induce consumption to make people buy things which they actually do not want. When it comes to India, advertising has a profound impact on how people understand life, the world and themselves, especially with regard to their values, choices and behavior.
            It is a naked truth that advertising is a business strategy which is in fact a powerful tool for enhancing, maintaining and developing brand equity. Therefore, it is crucial enough for companies to protect the content of an advertisement and to ensure that it is in line with the applicable laws. Even now many won’t realize the fact that which are the applicable laws governing advertising in India. At this point of time, it is pertinent to note that as far as India is concerned there is no as such law is there for regulating advertisement in any media. All one has to look into is a series of legislations and regulations relating to advertisements. But the fact is a common man should show pretty good amount of patience by going through all these rules and regulations as these will not as such constitute a complete structure on what one has to abide on the matter of advertisements.

ADVERTISING LAWS OF INDIA
As mentioned earlier the Government of India has not set up a regulatory body in India to regulate advertisements. But as in due course depending on the nature of the grievances, the power to regulate advertisements may be exercised by a vast variety of authorities, including the courts, Central and State Governments, tribunals or the police authorities. In addition to that numerous legislations also deal with advertisement provisions in part not in toto unfortunately. The rules, regulations and legislations include the following:-
1.      Advertising Standards Council of India (ASCI)
2.      Constitution of India
3.      Consumer Protection Act, 1986
4.      Information Technology Act, 2000
5.      Indian Penal Code, 1860
6.      The Young Persons (Harmful Publications) Act, 1956
7.      Indecent Representation of Women (Prohibition) Act, 1986 
8.      The Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003
9.      The Cigarettes (Regulation of Production, Supply and Distribution) Act, 1975
10.  The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1955
11.  The Drugs and Cosmetics Act, 1940
12.  The Emblems and Names (Prevention of Improper Use) Act, 1950
13.  Securities and Exchange Board of India (SEBI) (Stock-brokers and Sub-brokers) Rules, 1992 - Code of Conduct for Stock-brokers
14.  Securities and Exchange Board of India (SEBI) (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995
15.  Securities and Exchange Board of India (SEBI) (Mutual Funds Regulation), 1996: SEBI Guidelines for Advertisements by Mutual Funds
16.  Securities and Exchange Board of India (SEBI) (Disclosure and Investor Protection Guidelines), 2000
17.  The Prenatal Diagnostic Techniques (Regulation and Prevention of Misuse) Act, 1994
18.  The Transplantation of Human Organs Act, 1994
19.  The Representation of the People (Amendment) Act, 1996
20.  The Lotteries (Regulation) Act, 1998
21.  The Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992
22.  The Competition Act, 2002
23.  The Contract Act, 1872
24.  The Civil Defense Act, 1968
To scrutinize certain principles and fairness in the sphere of advertising, Advertising Standards Council of India was established in India in 1985. ASCI deal with complaints received from consumers and industry against such advertisements which are false, misleading, indecent, illegal, leading to unsafe practices or unfair to competition and are in contravention to the advertising code[1]. Even though there is no as such provision for regulating advertisement policy in the Constitution of India, which should be adopted by press or media, the Supreme Court has given guidelines for the same through a series of decisions[2].
Consumer Protection Act, 1986 provides better protection of the interests of consumers and to make provision for the establishment of consumer councils and other authorities for the settlement of consum­ers' disputes and for matters connected to it, including protection against unfair trade practices.[3]
             India is one of the very few countries in the world besides Singapore to have legislated Cyber laws.[4] The IT Act specifically empowers that anyone who publishes in the electronic form, any material which is lascivious or which  tends to degrade persons who are likely to read, see or hear the matter contained or embodied in it, shall be punishable with imprisonment and fine[5]. Even there is a provision in the IT Act, which applies to any offence by which any person shall be punished irrespective of his/her nationality if the act constituting the offence involves a computer, computer system or computer network located in India[6].

As per the provisions of Indian Penal Code, 1860 certain advertisements are considered as criminal offences. It is dealt under different provisions of the Code[7]. The Young Persons (Harmful Publications) Act, 1956 prevents the dissemination of certain publications harmful to young persons. To be more précised harmful publication indicates such publications which would tend to corrupt a young person whether by inciting or encouraging him to commit offences. The Act also proclaims that whoever advertises or makes known by any means that any harmful publication can be procured from or through any person, then he shall be punished with imprisonment or with fine, or with both[8].
Indecent Representation of Women (Prohibition) Act, 1986 prohibits indecent representation of women through advertisements[9] or in publications, writings, paintings, figures or in any other manner and for matters connected therewith or incidental thereto. The Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 and the Cigarettes (Regulation of Production, Supply and Distribution) Act, 1975, states that no person shall advertise for the distribution, sale or supply of cigarettes, and also shall not take part in the publication of such advertisement, unless the specified warning is included in such advertisement[10]. The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 (DMRA) controls the advertisement[11] of such drugs which is said to provide magical remedies and to deal with other matters relating to it.
             As per the Drugs and Cosmetics Act, 1940 (DCA), no person shall himself or by any other person on his behalf offer for sale[12] any drug or cosmetic which is not of a standard quality, or is misbranded, adulterated or spurious. The Act gives similar restrictions to advertisements for traditional drugs such as Ayurvedic, Siddha and Unani. The Emblems and Names (Prevention of Improper Use) Act, 1950 is enacted to prevent the improper use of certain emblems[13] and names, for professional and commercial purposes[14].

            In the exercise of the powers conferred by section 30 of the Securities and Exchange Board of India (SEBI) Act[15], 1992, the Board makes the regulations on the code of conduct for Stock-brokers to be known as SEBI Stock-brokers and Sub-brokers Rules in 1992. The provisions of the Rules specified that a stock-broker or sub-broker is prohibited from advertising his business publicly unless permitted by the stock exchange, including in their internet sites, by its subsidiaries, group companies etc. The Prenatal Diagnostic Techniques (Regulation and Prevention of Misuse) Act, 1994, contains provision[16] which prohibits advertisements relating to predetermination of sex. The Act provides for the prohibition of advertisements of any kind for any body or person pertaining to facilities for pre-natal diagnosis of sex available at any centre or place.

The Transplantation of Human Organs Act, 1994 provides for the regulation of removal, storage and transplantation of human organs for therapeutic purposes and for the prevention of commercial dealings in human organs and for matters relating to it[17] and provisions are there for the punishment for commercial dealings in human organs.[18] While detailing the provisions of the Representation of the People (Amendment) Act, 1951 (RPA)[19], it is observed that during the period of forty-eight hours before the conclusion of the poll for any elections in that polling area, a person shall not display to the public any election matter by means of cinematograph, television or other similar apparatus[20]. The statute even provides penalty for anyone including the advertisers who contravene the above provision with imprisonment or fine or with both.

Now when we analyze the Lotteries (Regulation) Act, 1998, it is seen that a State Government has the discretionary powers to organize, conduct or promote a lottery, including advertising thereof subject to some conditions[21] specified in the Statute. It is also provided that the State Government may prohibit within itself the sale of tickets of a lottery organized, conducted or promoted by every other state[22]; if any contravention on the above the Central Government may, by order published in the Official Gazette, prohibit a lottery organized, conducted or promoted thereof[23]. The penalty[24] clause of the Act is such that if any person acts as an agent or promoter or trader in any lottery organized, conducted or promoted in contravention of the provisions of the Act or sells, distributes or purchases the ticket of such lottery, he shall be punishable with imprisonment or with fine or with both.
In online advertising scenario, the law related to gambling is applicable to online gambling. The online lottery is the most popular form of internet gambling in India. Most companies who markets/distributes/conducts the state government-sponsored lotteries through the internet are restricted from selling their services in the states that banned lotteries. So it is advised that the companies (as a safeguard) seek an undertaking from their consumers relating to their residence under which the advertisers who publishes the same should also make a note of it.
The Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992[25] as Amended in 2003 regulates the production, supply and distribution of infant milk substitutes, feeding bottles and infant foods with a view for protecting and promoting breastfeeding and for the matters relating to it including advertisement[26] of the same[27].  The Competition Act, 2002 provides prohibition of certain agreements in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India[28].
The provisions of Trademarks Act, 1999 clearly emphasize that the following are considered as trademark infringement if it is advertised in such a way as to[29]:-
a)               takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; or
b)               is detrimental to its distinctive character; or
c)               is against the reputation of the trade mark.
Thus if used properly and without any malafide intention, then comparative advertisement can prove beneficial otherwise that may mislead consumers resulting into irreparable loss as well as legal battles[30].
As per the Contract Act, 1872, the advertisements for gambling, lottery and prize games have held to be wagering contracts and thus void and unenforceable[31], are prohibited in India. While reading the provisions of the Act along with the ASCI guidelines it is understood that even the incorporation of a visual representation of such gaming room or table could be construed as indirect advertisement.[32]

The Civil Defence Act, 1968 gives power to the Central Government to make rules for securing civil defence[33] for prohibiting the printing and publication of any book or other document containing matters prejudicial to civil defence[34]. Rules could also be made for demanding security from any press used for the purpose of printing/publishing of any book or other document containing matters prejudicial to civil defence[35].

ITS TIME FOR A UNIFORM LEGISLATION!!!!

It is an undisputed fact that advertisement plays a vital role in building up any business. The aim of advertisement is to attract the sales and enhance the visibility of the products and services of the company among the consumers. Through an advertisement, a company can build an image which it wants to make in the minds of the people. Therefore, nowadays, companies spend a huge amount of their resources on advertising and promotional strategies. Now there is even a new medium for advertisers to explore, the Internet!!!

           Thus it is evident from this blog that there are no specific legislations governing advertising in India, other than ASCI even which is not up to the mark to govern advertising spectrum. The changing context of liberalization and globalization required better regulation and strengthening of the institutional support. Even the IT Act is currently under severe scrutiny, as its scope leaves a lot to be desired. The fast growing internet transactions has unnerved evils, including those relating to online advertising. It is evident that all that is needed a codified uniform legislation for Advertising Laws and its time for India to lead the road ahead!!!!!!





[1]See  http://www.ascionline.org/ for Advertising Code. The ASCI Code is a self-regulatory code which is not legally binding on parties. However, in practice ASCI members include various media, publishers etc. who normally abide by decisions of the Complaint Complaints Council set up by ASCI. The ASCI Code covers all media including the online media. Please also refer to the section on General Requirements. Disobedience of ASCI’s decision does not lead to any civil or criminal consequences. Its enforcement mechanism is through non-publication of the contravening advertising by its media members.
[2] Hamdard Dawakhana v. Union of India AIR 1960 SC 552; Tata Press Ltd. v. Mahanagar Telephone Nigam Ltd (1995) 5 SCC 139.
[3] As the Monopolistic and Restrictive Trade Practices Act, 1984 is repealed after the coming into force of Competition Act, 2002 the unfair trade practices provisions of the MRTP Act will be enforced under the Consumer Protection Act.
[4] Guide to Cyber Laws (Information Technology Act, 2000, E-commerce, Data Protection & the Internet, Rodney D. Ryder, 2nd Edn. Reprint 2005, p.399.
[5] Section 67 of the IT Act, 2000
[6] Section 75 of the IT Act, 2000
[7] Section 292 (1) of Indian Penal Code, 1860; Section 292(2)(d) of Indian Penal Code, 1860; Section 292 (2)(e) of the Indian Penal Code, 1860; Indian Penal Code, 1860, Section 292- Exceptions, Section 292 A of Indian Penal Code, 1860; Section 292 A (e), (d) of Indian Penal Code, 1860; Section 293 of IPC, 1860; Section 294 A of IPC, 1860, Section 153 A of IPC, 1860, Section 153 B of IPC, 1860
[8] Section 3 of the Harmful Publications Act, 1956
[9] Section 2(a) of the Indecent Representation of Women (Prohibition) Act, 1986 defines advertisement- "Advertisement" includes any notice, circular, label, wrapper or other document and also includes any visible representation made by means of any light, sound, smoke or gas.
[10] Section 5 (1), the Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 (CTPA)
[11] Section 2(a) of the Drugs and Magical Remedies (Objectionable Advertisements Act), 1954 defines " advertisement " includes any notice, circular, label, wrapper, or other document, and any announcement made orally or by any means of producing or transmitting light, sound or smoke;
[12] Section 18 of the Drugs and Cosmetics Act, 1940
[13] Section 2(a) of the Emblems and Names (Prevention of Improper Use) Act, 1950 defines emblem as any emblem, seal, flag, insignia, coat-of-arms or pictorial representation specified in the Schedule.
[14] Schedule of the Emblems and Names (Prevention of Improper Use) Act, 1950 enumerates the list of emblems and names which are prohibited from improper use in professional and commercial purposes.
[15] Visit http://www.sebi.gov.in/acts/act15ac.html
[16] Chapter VII Prenatal Diagnostic Techniques (Regulation and Prevention of Misuse) Act, 1994
[17] Preamble of The Transplantation of Human Organs Act, 1994
[18] Chapter VI, Section 19 of The Transplantation of Human Organs Act, 1994
[19] Section 126 of The Representation of the People (Amendment) Act, 1951 (RPA)
[20] Section 126 A is inserted in THE REPRESENTATION OF THE PEOPLE (SECOND AMENDMENT)
BILL, 2008 which provides a person shall not conduct any exit poll and publish or publicise by means of the print or electronic media or disseminate in any other manner, whatsoever, the result of any exit poll during such period, as may be notified by the Election Commission in this regard. For the purpose of this section, ‘‘electronic media’’ includes internet, radio and television including Internet Protocol Television, satellite, terrestrial or cable channels, mobile and such other media either owned by the Government or private person or by both;
[21] Section 4 of the Lotteries (Regulation) Act, 1998, the conditions includes the following:-
a)         Prizes shall not be offered on any pre-announced number or on the basis of a single digit;
b)       The State Government shall print the lottery tickets bearing the imprint and logo of the State in such manner that the authenticity of the lottery ticket is ensured;
c)        The State Government shall sell the tickets either itself or through distributors or selling agents;
d)       The proceeds of the sale of lottery tickets shall be credited into the public account of the State.
e)        The State Government itself shall conduct the draws of all the lotteries;
f)        The prize money unclaimed within such time as may be prescribed by the State Government or not otherwise distributed, shall become the property of that Government;
g)       The place of draw shall be located within the State concerned;
h)       No lottery shall have more than one draw in a week;
i)         The draws of all kinds of lotteries shall be conducted between such periods of the day as may be prescribed by the State Government.
j)         The number of bumper draws of a lottery shall not be more than six in a calendar year;
k)       Such other conditions as may be prescribed by the Central Government.
[22] Section 5 of the Lotteries (Regulation) Act, 1998
[23] Section 6 of the Lotteries (Regulation) Act, 1998
[24] Section 7(3) of the Lotteries (Regulation) Act, 1998
[25] The Act is named as The Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992 as Amended in 2003 (IMS Act) visit http://www.bpni.org/docments/IMS-act.pdf
[26] Section 2(a) of The Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992 as Amended in 2003 (IMS Act): “advertisement” includes any notice, circular, label, wrapper or any other document or visible representation or announcement made by means of any light, sound, smoke or gas or by means of electronic transmission or by audio or visual transmission;
[27] Preamble of The Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992.
[28] Chapter II of the Competition Act, 2002
[29] Section 29(8) of Trademarks Act, 1999.
[30] Reckitt Benckiser v Hindustan Lever 2008 (38) PTC 139; Pepsi Co Inc v Hindustan Coca Cola Ltd 2003 (27) PTC 305 (Del)
[31] Section 24 to 30 of the Indian Contract Act, 1872.
[32] Chapter III, Clause 6(d) and (e) of the ASCI Code.
[33] Chapter II of the Civil Defence Act, 1968
[34] Chapter II, Section 3(1)(w) of the Civil Defence Act, 1968
[35] Ibid, n.122

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