This Article is written by Aparna Chaki, student of Heritage Law College (Calcutta University).
Broadly defining, a misleading advertisement may be described as any promotion (publicity, propaganda, marketing, and selling) as well as advertisement through traditional media which includes radios and television or electronic media like newspaper, posters, banners, wall-writing, etc. to garble or falsify the nature, attributes, standard or topographical genesis of goods and services with an intention to delude the customers. Misleading advertisements misstate competition and the consumer’s choice. Thirty years into the enactment of the Consumer Protection Act, 1986, and a prototype conveyance from Caveat Emptor to Caveat Venditor, Indian consumers are still getting exploited by service providers of all sectors. A lot of advertisements these days are used as a tool to mislead the public at large or become a nuisance element.
In a predominantly capitalist country like ours, advertisements are a fundamental pedigree for generating consciousness and perception about any particular products and services. However, there has been a paradigm shift. Advertisements are now conveyed through radios, televisions, print media to social media platforms and through these, there remains a massive demand from the customers. Companies press with the ingenious and radical approach in an order to attract their customers and augment their sales. In this process, corporates often have a propensity to advocate their brand in such a fashion that they show themselves superior to their competitors. One such recent case of misleading advertisement is that of Horlicks Limited vs. Zydus Wellness Products Limited wherein the Delhi High Court dealt with the law associated with misleading advertisement and depreciation.
HORLICKS LIMITED VS. ZYDUS WELLNESS PRODUCTS LIMITED
Horlicks is one of the key brands in the health food drinks variety available in India. It is a brand owned by the Hindustan Unilever Limited who acquired it from the GSK Consumer Healthcare in the year 2020. It claims to have been clinically proven to make kids who drink this beverage regularly taller, stronger, and sharper. It further asserts that regular consumption of Horlicks combined with a healthy diet as well as a healthy lifestyle can lead to quantifiable enhancement in the growth and development of the child along with better concentration power. Complan, on the other hand, is a powdered milk energy drink which is again preferred in many Indian households. It is a brand owned by Zydus Wellness Products Limited.
In mid-2019, Complan (owned by Zydus) aired an advertisement and declared that one cup of Complan was equivalent to two cups of Horlicks (owned by Unilever) thus providing the same amount of protein in one cup of Complan that Horlicks furnished in two cups. A suit was filed in the Delhi High Court by Horlicks seeking a permanent injunction prohibiting Zydus Wellness Products from airing the disputed TVC.
WHAT THE PLAINTIFFS CONTENDED?
Horlicks (the plaintiff) mentioned in their plaint that the said TVC generated incertitude and perplexity in the minds of the customers by giving a fallacious implication to them. The TVC also did not furnish any voiceover for the disclaimer and the advertisement was way short for the customer to scrutinize the textual disclaimer. The plaintiff contended that the purpose of the TVC was to disparage and belittle their product.
WHAT THE DEFENDANTS CONTENDED?
The Zydus Company (the defendants) stated that the gross motive of the said TVC was to edify the viewers/consumers about the protein content that one cup of Complan contained which was equivalent to the protein content that Horlicks (the plaintiff) contained in two cups. The defendant further contended that they should be given the liberty to be creative latitude to which the plaintiff should not act as hypersensitive. It further stated that per size cup comparison was a recognized approach of comparison. A comprehensive evaluation of the facts along with the ramifications of the TVC should be considered. Henceforth, the Court of law should not impede and obstruct in the grossest case of abuse.
DECISION OF THE DELHI HIGH COURT
The Delhi High Court highlighted the category of the channel that was used to disseminate the advertisement in this case. The Court marked that any advertisement aired through an electronic form of media would lead to creating well-fortified repercussions on the customers than if it was given out on print media. The Court was of the opinion that a viewer or a customer who sees any advertisement of such a small duration cannot be expected to read any sort of textual disclaimer given anywhere on the screen. Justice Mukta Gupta, the presiding Judge over the case, said that under such circumstances, any viewer viewing the commercial would be deceived and Horlicks (the plaintiff) would have to suffer an irredeemable loss. Thus, the High Court restrained the Zydus Company from airing its commercial in the current form till the time the lawsuit that was initially filed by Horlicks wasn’t disposed of.
This particular Order significantly differentiated between the gradations of advertisements published in print media in contrast to electronic media. It exhibited that an uncongealed viewpoint was a prerequisite in determining similar content of advertisements when manifested in divergent categories of media. This judgment also provides a basis on which courts and companies/manufacturers can bank on while deciding and programming advertisements discretely.
NEGATIVE IMPACTS OF MISLEADING ADVERTISEMENTS
Misleading advertisements have far-reaching repercussions on the customers, their business and employees, and on the perception of competition. These false advertisements might lead to the customer being misinformed about a product or service and making wrong decisions. It leads to the customer wasting their hard-earned money on the wrong product or service and being completely unsatisfied along with creating havoc for them. These misleading advertisements often harm their business as well as employees too. If a consumer is unhappy with the products or services of them, they bad mouth it, and negative stories about the same start cooking up eventually damaging the reputation of the company permanently. These often attract severe legal actions against them.
The employees of such companies work in the frontline and often get blamed for the duped services despite the fact that they neither created nor endorsed the brands. They are often blamed for the faulty product or service. This often leads to demotivation developing amongst the employees further leading to the losses of the company. It is because of the competition that every brand tries to bring new and modern changes in their products and services. However, if a single company indulges in a misleading advertisement, it might lead the other companies dealing with similar products to invest in the same resulting in industry-wide damage.
The law in regard to the misleading advertisements is rapidly changing. It may be fascinating to observe that the Delhi High Court had earlier permitted the circulation of a similar kind of advertisement (Horlicks Ltd. & Anr. v. Heinz India Pvt. Ltd.) in the form of print media but inhibited the same when telecasted in the form of electronic media. This happened because advertisement through electronic media is supposed to create a deeper impact on the audience than through print media. Electronic media involves a merger of both audio and visual display which more presumably impacts the audience and which is why it needs precise regulations.
- SagarMalviya, HUL acquires Horlicks from GSK for Rs 3,045 crore, The Economic Times (Apr. 01, 2020 06:05 PM), https://economictimes.indiatimes.com/industry/cons-products/food/hul-acquires-horlicks-from-gsk-for-3045-crore/articleshow/74928717.cms?from=mdr.
- Ankoosh Mehta, Maitrayi Jain & Anushka Shah, Advertisement to Misleading Advertisement/Horlicks Ltd. v. Zydus Wellness Products, The SCC Online Blog (July 30, 2020), https://www.scconline.com/blog/post/
- Prathma Sharma, Delhi High Court restrains Zydus Wellness from airing its Complan ad, Mint (May 14, 2020 11:51 PM), https://www.livemint.com/companies/news/delhi-high-court-restrains-zydus-wellness-from-airing-its-complan-ad-11589480113968.html.
- Press Trust of India, HC restrains Zydus from airing its Complan ad, says it disparages Horlicks, Business Standard (May 14, 2020 09: 19 PM), https://www.business-standard.com/article/pti-stories/hc-restrains-zydus-from-airing-its-complan-ad-says-it-disparages-horlicks-120051401518_1.html.
- Nicky LaMarco, Negative Effects of False Advertising, Chron (Dec. 03, 2018), https://smallbusiness.chron.com/negative-effects-false-advertising-25679.html.
- The Impact of Electronic and Print Media on Disparagement and Comparative Advertisements in Horlicks Ltd. 7 Ors. v. Zydus Wellness Products Ltd., Lexology (July 11, 2020), https://www.lexology.com/library/detail.aspx?g=2699adad-f9ae-4e38-b80e-071a023cf5f5.