The year 2024 has seen significant advancements in advertising laws in India, with the introduction of various new guidelines aimed at regulating mis-advertising. This is understandable, considering that the Indian advertising market is projected to become a $19.2 billion industry by 2028.[1]
Globally, since 2020, digital marketing and ad-tech have been outperforming other forms of media like television, print and radio.[2] By 2025, digital advertising in India, too, is poised to claim 55% share of advertising spends![3] Innovations like interactive ‘advergaming’[4], where games are used to deliver more engaging advertisements to consumers are ‘breaking the internet’!
While innovation is welcome, advertising is also getting more aggressive, often crossing into the grey of law. However, regulators are keeping up to protect consumer interests!
2019-2022: Advertising and the Consumer Law
Advertising laws in India have been evolving for a while now. The year 2019 saw the overhauling of the 1986 consumer law, with the Consumer Protection Act, 2019 (“CPA”), replacing it.
Among many of its ushering, the CPA, for the first time:
- defined ‘advertisements’ broadly to cover all kinds of audio and/ or visual publicity and representations made in all forms of media, including digital media[5];
- introduced the concept of ‘misleading advertisements’ in relation to a product/ service to mean an advertisement which, (i) falsely describes such product/ service; (ii) gives a false guarantee or is likely to mislead with respect to nature, substance, quality or quantity of a product/ service; (iii) conveys a representation that constitutes unfair trade practice; or (iv) deliberately conceals important information[6];
- defined ‘e-commerce’ to mean buying/ selling of goods/ services (including digital products) over a digital or electronic network[7]; and
- established the Central Consumer Protection Authority (“CCPA”) as the nodal agency to regulate matters relating to misleading advertisements[8], having wide powers to inter alia issue necessary guidelines for protection of consumer interests.[9]
With advertising on, and of, e-commerce platforms hitting new highs, the Consumer Protection (E-Commerce) Rules, 2020 (“E-Commerce Rules”), were notified to outline the duties and liabilities of various e-commerce entities and sellers on online marketplaces. The E-Commerce Rules define an e-commerce entity to mean “any person who owns, operates or manages a digital facility/ platform for electronic commerce”.[10] The E-Commerce Rules categorise e-commerce entities as marketplace (i.e. which provide a platform to facilitate transactions between buyers and sellers[11]) and inventory-based (i.e. which own the inventory of goods/ services and sell directly to consumers[12]), and have nuanced compliance obligations for e-commerce platforms, as well as sellers.
In the context of advertising practices, the E-Commerce Rules require sellers and inventory e-commerce entities (i.e. e-commerce entities that own the inventory of goods/ services and sell directly to consumers) to: (i) ensure that the advertisements are consistent with actual characteristics, access and usage conditions of the goods/ services[13]; and (ii) take back goods/ discontinue services and refund consideration paid for such goods/ services if they are not in line with the characteristics advertised by them.[14] Marketplace e-commerce entities are inter alia obligated to require sellers on their platforms, through an undertaking, to ensure that the description/ images/ other content pertaining to goods/ services sold by the seller on the platform are accurate and corresponds with the actual appearance, nature, quality, purpose and other features as claimed.[15]
To strengthen the grip around misleading advertisements, the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 (“Misleading Advertisement Guidelines”), were notified in 2022. The Misleading Advertising Guidelines provide a robust overarching framework for protecting consumers against misleading advertisements across form, format or medium by manufacturers, service providers, traders, advertising agencies or endorsers (including celebrities and influencers) of products and services.
They inter alia lay down various do’s and don’ts for an advertisement. Essentially, the advertisement should:
- contain honest representation;
- ensure that the claims made are independently substantiated and do not mislead consumers; and
- comply with sector-specific laws.
Further, advertisements should not:
- mislead consumers by exaggerating accuracy, scientific validity or practical usefulness or capability, etc., of the goods/ services;
- present rights conferred on consumers under law as a distinctive feature of the advertiser’s offer;
- suggest that claims are universally accepted, if there is division of informed/ scientific opinion on such claims; or
- mislead about the nature or extent of risk to personal security of consumers/ their family if they fail to purchase the goods/ service.[16]
While this framework looks comprehensive, the CCPA is further tightening the noose around advertisers by responding to the latest trends in the market and technology by notifying specific and targeted guidelines.
2023-2024: New Trends and the Consumer Law
Digital advertising and practices such as confirm sharing (i.e. creating a sense of shame to nudge the user into making purchase), bait and switch (i.e. advertising a particular outcome, but deceptively serving another) and the nagging advertising behavior, saw the emergence of dark patterns (i.e. deceptive designs/ practices to trick users into doing something they do not intend/ want to)[17].
The CCPA took note, and in December 2023, issued Guidelines for Prevention and Regulation of Dark Patterns, 2023 (“Dark Pattern Guidelines”), to hold advertisers, sellers, manufacturers, service providers and platforms responsible for engaging in dark patterns. Therefore, practices like creating false urgency (e.g. “last piece left! 5 others are looking at this right now”) or automatic addition of products or services at check-out (e.g. automatic additional of travel insurance while booking a flight ticket) would not pass muster now.[18] [For a deep dive into the Dark Pattern Guidelines, see our previous post here.]
Another not-so-kosher trend surfaced from examination of green-claims. In November 2024, the Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024 (“Greenwashing Guidelines”), were issued, holding manufacturers, service providers, traders and advertisers and endorsers of goods, products and services responsible for making misleading environmental claims. The Greenwashing Guidelines laid down various standards to be followed by advertisers when making environmental claims, and imposed requirements to adequately substantiate them, back them up with verifiable evidence and make appropriate disclosure of material information in the advertisement itself/ through URLs/ QR codes.[19] [For a detailed analysis into the Greenwashing Guidelines, see our previous post here.]
While the above guidelines are applicable to entities across the board, a sector-specific approach to address misleading advertisements in specific industries can be seen.
In March 2024, the CCPA issued an advisory to celebrities/ influencers to refrain from endorsing illegal betting/ gambling activities and cautioning all stakeholders, including manufacturers, advertisers, publishers, intermediaries and social media platforms, against engaging in such advertisements.
Following this, a similar advisory was issued by the Ministry of Information and Broadcasting (“MIB”) to endorsers/ influencers, social media intermediaries and online advertising intermediaries to refrain from advertising illegal betting/ gambling platforms. The advisory reiterated the MIB’s powers to remove/ disable access to such advertisements.
These advisories came in a timely manner. An Advertising Standards Council of India (“ASCI”) report shows that between April 2023 and March 2024, the illegal betting/ gambling sector saw the second-highest number of violative advertisements![20]
The Supreme Court’s directions in the Patanjali case, led to the MIB mandating a self-declaration certificate requirement for advertisers in the food and health sectors.[21]
Similarly, the CCPA has been clamping down on (misleading) advertisement practices in the coaching sector as well. In November 2024, the CCPA issued the Guidelines for Prevention of Misleading Advertisement in Coaching Sector, 2024 (“Coaching Guidelines”). The Coaching Guidelines apply to all forms of advertisements made by any person engaged in coaching (i.e. academic support, imparting education, guidance, instructions, study programme or tuition or another similar activity, but not including counselling, sports, dance, theatre and other creative activities[22]).
The Coaching Guidelines define misleading advertisements in the coaching sector to include making false claims regarding (i) courses, duration, faculty credentials fee, etc.; (ii) number of selections, rank in exams or success rate; and (iii) guaranteed selection, job security, promotions, increments, admissions, high rank/ marks, etc. Practices such as false representation of quality of services, creating false urgency and other unfair trade practices also constitute misleading advertisements.[23]
The Coaching Guidelines impose further obligations on any person engaged in coaching, making an advertisement[24], including:
- disclosure of important information like rank, name and duration of course of candidate in the advertisement;
- obtaining written consent of a candidate, subsequent to their selection for using their name, photographs, testimonials, videos, etc., in an advertisement.
- accurately representing services, facilities and infrastructure of the coaching centre in the advertisement;
- truthfully representing that courses offered are duly recognised by competent authorities, as applicable; and
- maintaining transparency, prominently displaying the disclaimer and any other important information in the same font.
[For a detailed analysis of the Coaching Guidelines, see our previous post here.]
Through these guidelines/ advisories, the CCPA is taking active steps to address the concerns presented by the peculiarities of each sector or practice.
Regulators Aligning Approach
Other regulators are also keeping an eye on mis-advertising practices.
For instance, in the insurance sector, the Insurance Regulatory and Development Authority of India (“IRDAI”) is making strides to regulate advertising. In March 2024, the IRDAI issued the IRDAI (Protection of Policy holders’ Interests and Allied Matters of Insurers) Regulations 2024 (“Insurance Regulations”), which prescribes various advertising norms to be followed by the insurers. The Insurance Regulations require insurers to, inter alia, put in place a board approved policy on advertisements and internally approve each advertisement prior to its issue.[25]
The Securities and Exchange Board of India (“SEBI”) has also been active in regulating unregistered ‘finfluencers’ and, in July 2024, came up with guidelines restraining SEBI regulated entities from engaging in any capacity or having any association/ transaction involving money or money’s worth with unregistered ‘finfluencers’.[26] Pursuant to the guidelines, entities regulated by SEBI can associate with finfluencers only if: (i) they are exclusively engaged in investor education and do not give any advice; (ii) the engagement is through a specified digital platform, which has the mechanism to take preventive and curative action to ensure that the platform is not used by unregistered finfluencers to provide advice.[27]
Next Steps
The face of advertising laws in India is rapidly evolving. Regulators are increasingly scrutinising advertising practices to ensure greater accountability and transparency. These evolving regulations reflect the intent to safeguard consumer rights and adapt swiftly to address the complexities of modern advertising practices. With this ever-changing landscape of advertising laws in India, some best practices the industry can adopt include:
- keeping track of developments in advertising laws;
- reviewing advertising practices and assessing whether such practices need to be revamped to align with the evolving legal and regulatory framework;
- content review of advertisements, including promotional and marketing material, from a compliance standpoint;
- review of platform and website design elements to ensure compliance with applicable laws; and
- keeping record of supporting material to substantiate advertising claims.
For further information, please contact:
Aarushi Jain, Partner, Cyril Amarchand Mangaldas
aarushi.j@cyrilshroff.com
[1] Indian Entertainment and Media Industry revenue to soar with a CAGR of 8.3%, projected to hit INR 365k crore by 2028: PwC report.
[2] Digital ad market set to eclipse traditional media for first time (ft.com).
[3] India’s Digital Advertising Market 2024: Key Trends and Forecasts from Dentsu & E4M Report | YourStory.
[4] For instance, see: Disney Delivers Slate of New Streaming Ad Innovation to Fuel Greater Interactivity and Engagement | Disney Advertising Press.
[5] Section 2(1), CPA.
[6] Section 2(28), CPA.
[7] Section 2(16), CPA.
[8] Section 10, CPA.
[9] Section 18, CPA.
[10] Rule 3(b), E-Commerce Rules.
[11] Rule 3(g), E-Commerce Rules.
[12] Rule 3(f), E-Commerce Rules.
[13] Rule 6(4), 7(3), E-Commerce Rules.
[14] Rule 6(3), 7(4), E-Commerce Rules.
[15] Rule 5(5), E-Commerce Rules.
[16] Clause 4, Misleading Advertisement Guidelines .
[17] Clause 2(e), Dark Pattern Guidelines .
[18] Annexure 1 of the Dark Pattern Guidelines.
[19] Clauses 5, 6, Greenwashing Guidelines.
[20] Annual Complaints Report 2023-24 Final (ascionline.in).
[21]https://new.broadcastseva.gov.in/digigov-portal-web-app/scan?requestType=ApplicationRH&actionVal=viewAllHighlightService.
[22] Clause 2(c), Coaching Guidelines.
[23] Clause 3, Coaching Guidelines.
[24] Ibid.
[25] Chapter 2, IRDAI (Protection of Policy holders’ Interests and Allied Matters of Insurers) Regulations 2024.
[26] ‘Fin-fluencers’ may register with the SEBI in accordance with provisions of the SEBI (Investment Advisers) Regulations, 2013.
[27] In August 2023, SEBI released a consultation paper on association of SEBI regulated entities with unregistered fin-fluencers. The consultation paper can be accessed here: SEBI | Consultation Paper on Association of SEBI Registered Intermediaries/Regulated Entities with Unregistered Entities (including fin-fluencers).
