Q&A: online advertising in India

Advertising

Regulation

What rules govern online advertising?

While there are no specific rules or regulations governing advertising on the internet, in terms of the Information Technology Act 2000 (the IT Act), it should be ensured that any advertisement published or transmitted through any website on the internet does not contain any obscene material, any material containing sexually explicit acts or conduct, and any material depicting children in an obscene, indecent or sexually explicit manner. In addition to the above, the Advertising Standards Council of India prescribes the code for self-regulation in advertising (the ASCI Code), which may be adopted by persons publishing advertisements on the internet. Compliance with such code is voluntary with respect to online advertising and not mandated by law. However, with respect to content on television, adherence to the ASCI Code is mandatory under the Cable Television Regulation Act 1995 (the Cable Television Act).

In addition, there are certain laws and guidelines that prohibit the advertising and publication of certain specific types of content. A violation of these laws will entail consequences under those respective laws, including imprisonment. An illustrative list of such regulations is:

• the Indian Penal Code 1860 prohibits any person from selling, advertising or otherwise distributing any obscene material (such as books, pamphlets, drawings, paintings and representations). It also prohibits any person from distributing, circulating or advertising any picture or any printed or written document that is grossly indecent;
• the Indecent Representation of Women (Prohibition) Act 1986 prohibits publishing or taking part in the publication of any advertisement that contains ‘indecent representation of women’ in any form;
• the Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act 1992 prohibits advertising of infant milk substitutes, feeding bottles or infant foods for the purposes of distribution, sale and supply;
• the Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act 2003 prohibits all direct and indirect advertising of tobacco products in all media;
• the Flag Code of India 2002 prohibits the use of the Indian national flag in any form of advertisement;
• the Legal Metrology Act 2009 imposes certain prohibitions and restrictions upon the advertisement of prepackaged commodities and certain other products;
• the Drugs and Magic Remedies (Objectionable Advertisements) Act 1954 prohibits the advertisement of certain drugs and of misleading advertisements;
• the Prize Chits and Money Circulation Schemes (Banning) Act 1978 prohibits advertisements relating to prize chit and money circulation schemes;
• the Transplantation of Human Organs Act 1994 prohibits any advertising inviting persons to supply, or offering to supply, any human organ for payment;
• the Young Persons (Harmful Publications) Act 1956 prohibits advertisements relating to any harmful publication (ie, any publication that tends to corrupt a person under the age of 18 years by inciting or encouraging him or her to commit offences or acts of violence or cruelty or in any other manner whatsoever);
• the Drugs and Cosmetics Act 1940 prohibits advertisements for any drug or cosmetic from using reports of tests or analysis of the Central Drugs Laboratory or by a government analyst;
• the Cable Television Network Rules 1994 prohibit any advertisement promoting the production, sale or consumption of cigarettes, wine, liquor or other intoxicants through the cable service; and
• the Food Safety and Standards Act 2006 prohibits advertisement relating to the standard, quality, quantity or grade composition, and no representation concerning the need for, or the usefulness of, any food can be made that is misleading or deceiving or that contravenes the provisions of the food safety laws.

Targeted advertising and online behavioural advertising

What rules govern targeted advertising and online behavioural advertising? Are any particular notices or consents required?

The term ‘online advertising’ has not been specifically defined under Indian law. However, laws that regulate publication or advertisement of content in physical form are medium agnostic and are equally applicable to content over the internet. Further, as per section 2(1) of the Consumer Protection Act, 2019 (CPA 2019), ‘advertisement’ means any audio or visual publicity, representation, endorsement or pronouncement made by means of, inter alia, electronic media, internet or website and includes any notice, circular, label, wrapper, invoice or such other documents. Accordingly, advertisements need to comply with the CPA 2019, in addition to other laws that regulate advertising.

Misleading advertising

Are there rules against misleading online advertising?

Yes. In addition to certain industry-specific laws, the CPA 2019 prohibits, inter alia, the following trade practices used for the purpose of promoting the sale, use or supply of any goods, or the practice of making any statement that:

• falsely represents that the goods or services are of a particular standard, quality, quantity, style or model;
• falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new goods;
• represents that the goods or services have sponsorship, approval, performance, characteristics, uses or benefits that such goods or services do not have;
• makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;
• gives to the public any warranty or guarantee of the performance or efficacy of a product that is not based on proper tests; and
• permits the publication of any advertisement for the sale of goods or services at a bargain price that are not intended to be offered for sale at such price.

Given that there are no separate rules that regulate online advertising, the relevant provisions of the IT Act and CPA 2019 are applicable to misleading advertising in the online space too. As per section 2(28) of the CPA 2019, an advertisement that (1) falsely describes such product or service; (2) gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; (3) conveys an express or implied representation that, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or (4) deliberately conceals important information, will be construed as a misleading advertisement in relation to any product or service. Misleading advertisements are not permitted under the CPA 2019.

The Advertising Standards Council of India (ASCI) may call upon advertisers and advertising agencies to substantiate all descriptions, claims and comparisons that can be objectively ascertained. For instance, with respect to food and beverages, the ASCI Code mandates that advertisements should not be misleading or deceptive. Specifically, advertisements should not mislead consumers to believe that consumption of the product advertised will result directly in personal changes in intelligence, physical ability or exceptional recognition. Such claims, if made in advertisements, should be supported with evidence and with adequate scientific basis. In the context of misleading advertising, the ASCI has recently issued guidelines for celebrities in advertising (the Celebrity Guidelines). These Celebrity Guidelines have been developed to ensure that claims made in advertisements featuring celebrities or celebrity endorsements are not misleading, false or unsubstantiated. The Celebrity Guidelines impose certain obligations on the advertiser as well as the celebrity, for example:

• it is the duty of the advertiser to make sure that the celebrity they wish to engage in an advertisement is aware of the ASCI Code and such advertisements should not violate any guidelines of the ASCI Code;
• celebrities should not participate in advertising any products that, by law, require a health warning;
• celebrities should also not participate in advertising products, treatments or remedies that have been banned under the Drugs and Magic Remedies (Objectionable Advertisements) Act 1954 and Drugs and Cosmetics Act 1940 and the rules thereunder;
• endorsements, representations of opinions or preference of celebrities in the advertisement must reflect their genuine opinion and must be based upon adequate information or experience with the product or service being advertised; and
• celebrities should do their due diligence to ensure that all descriptions, claims and comparisons made in the advertisement they appear in or endorse are capable of being objectively ascertained and capable of substantiation and should not mislead or appear deceptive.

Restrictions

Are there any digital products or services that may not be advertised online?

Yes. Advertising of products such as cigarettes, tobacco and its derivatives, alcohol, infant milk substitutes, certain drugs, firearms and lotteries are prohibited under different laws, whether on the internet or otherwise. Note that there is no specific prohibition with respect to advertisements in the online space. These restrictions and prohibitions are medium agnostic.

Online publishing

Hosting liability

What is the liability of internet service providers, telecommunications providers and other parties that merely host and display the content written or published by third parties? How can these providers minimise their liability?

The primary obligation under Indian law is cast upon the content providers to ensure that content hosted or published in any form does not violate any applicable laws. Depending on the nature of the contravention, the content providers may be subject to civil and criminal liabilities. However, electronic intermediaries such as ISPs, search engines and online marketplaces are eligible to benefit from the safe harbour provisions under the IT Act. To be eligible to take benefit of safe harbour laws, the intermediary is required to comply with certain conditions, for example:

• the intermediary’s role must be limited to providing access to information made available by third parties;
• the intermediary must not initiate the transmission of data made available by third parties;
• the intermediary must not select the receiver of the transmission; and
• the intermediary must not select or modify the information contained in the transmission.

It also needs to be demonstrated that the intermediary has observed ‘due diligence’ in discharging its duties under the IT Act and the IT Intermediary Guidelines, which require that the intermediary should not conspire, abet, aid or induce the commission of the unlawful act and should also expeditiously remove or disable access to objectionable content upon receiving knowledge.