The 12th International Consumer Law Conference Blog

Organised by NALSAR and the International Association for Consumer Law

25th February, 2009: Rights and Responsibilities of Service Providers in a Global Economy

Dr. Dulio Álvarez Rubio University of Cantabria (Spain): Fight against poverty and climate change as advertising weapons and European Directive of Unfair Commercial Practices :-

The speaker firstly, brought forth the problem with classic dictionary definitions of advertising not always including indirect means of advertisement, which poses a problem when misleading commercial practices need to be checked. He then emphasized on the fact that advertising needed to be defined before you begin with any analysis of the concept. He used the definition given in Art. 2.1 Council Directive 84/450/EEC of 10 September 1984 -“making of a representation in any form in connection with a trade, business, craft or profession in order to promote the supply of goods or services, including immovable property, rights and obligations”.
Upon an anlysis of the new concept of advertising, which was implicit in the European Directive of unfair commercial practices (Art.2.d), he came up with the observation that the definition of commercial communication and advertising addresses commercial practices directly related to influencing consumers’ transactional decisions in relation to products. It does not address commercial practices carried out primarily for other purposes, including for example commercial communication aimed at investors, such as annual reports and corporate promotional literature. It could allow enterprises to use strategies of misleading in fileds as the ones we are talking about without any punishment, a fact that is particularly dangerous as these days, most of the companies use subtle, “indirect” tecniques.
According to him, companies use commitments against poverty, global warming, etc and other social problems. This according to him is also advertising as their main aim is to promote the brand image and name.
A question which he wanted to answer was whether the public showing of corporate responsibility plans be considered advertising?, or, by extension, the major question that was sought to be answered was – Can information in commercial practice that helps form a brand image be controlled? The question was answered eventually with the fact that even if it is not always, based on the changing nature of commercial practices, it should be.
There are five types of social marketing. The first three are covered by a controlling directive, whereas the last two have no controls upon them despite the fact that they also form consumer impressions.
1. Advertising with social commitments mixed with concrete commercial offers.
2. Advertising with concrete references to quality of goods produced.
3. Advertising with references to abstract commitment with rekation to goods promoted.
4. Advertising with reference to abstract commitments without any relation to goods promoted.
5. Advertisements with concrete references with no relation to goods promoted.
Since the last two forms have no controls placed upon them by the directive, they may very easily be used to mislead. They often are, as well.
He referred to the case of Nike v. Kasky, a US case to interpret with accuracy, what must be considered as advertising from a legal point of view in order to avoid misleading practices. The judgement recognised the varied nature of social advertising, and considering the importance of image and branding, agreed that socially targeted marketing also required controls upon it.

Professor Madabhusi Sridhar Acharyulu, NALSAR University of Law, Hyderabad, India: Is the consumer consumed?:-

He began with an anecdote about the slick marketing strategies employed by hell, segueing into corporate commercial practices, which attempt to “sell you hell at an exorbitant price.” He talked about how marketing departments create and sell fake images of the brand and products. How the media was being used to propagate their schemes and reach people in a very impressive way while also increasing the price. Global market in cyber space through satellite media is now a very fertile premise for launching products simultaneously all over the world and enhances the scope for selling adopting manipulated truth.
The paper essentially dealt with three cases: that of tobacco companies, Amway and Securities scams while examining company liability in light of misleading commercial practices (advertising and otherwise), both in a present-day scenario as well as historically. A 2002 Philip Morris judgement gave large amounts of compensation to a woman who had been a lifelong smoker since she was convinced by tobacco advertising that lung cancer was not a reasonable danger. Indian courts are however, not up to the point where consumers can seek redressal for their troubles.
The main question to ponder over that who should be blamed for all this? The producer, or the manufacturer, or the advertiser?
There is, as pointed out, a great necessity for regulation of such unfair trade practices. The FTC Act in the US acts as a deterrent, but despite all the acts such as the CPA, MRTP and Competition Act, the Indian consumer cannot be said to be adequately protected.

Savita Hanspal, Reader in Commerce, Kamla Nehru College, India & Prof. Shri Ram Khanna: Regulating and Misleading Advertising: Role of ASCI:-

The speaker discussed the measurement and reporting of Television Rating Points (TRP), which are used to indicate the popularity of the channel or program. The system of measuring TRPs in India is heavily biased in favour of the rich and powerful with purchasing power. The broadcasters of all 400 TV channels in the country follow the skewed ratings calculated by one of two companies, which have a very limited and biased sample to judge from. This means the broadcasters tend to show only what the rich will want to watch, ignoring the entertainment requirements of the vast majority of the country.
The TRAI or Telecom Regulating Authority of India conducted a fact finding mission, which was intended finally to recommend regulations regarding the TRP ratings.
In May 2008, India had 78 million cable and satellite TV possessing homes. 1.2 million also have direct broadcast services to their homes. Two companies in India are in charge of gathering TRPs for the whole country, TAM and EMAN. They have unconscionably small sample sizes- 6000 and 7000 homes- to gather ratings for the entire country. However, their samples are skewed based on regions, age groups, societies, which in the end trickle down to the bias related to purchasing power. Despite the availability of technology to measure in real-time the television that is being watched, such mechanism is not employed, leading to suspicions of fiddling with data gathered.
The paper finally suggests that in order to maximise social welfare, government should by regulation mandate a reliable scientific, accurate and transparent measurement system and in doing so should not be involved in its management but should only ensure its independence, scientific basis and accuracy.
Rapporteurs: Disket Angmo, IInd Year
NALSAR University of Law
Shuchita Thapar, Ist Year
NALSAR University of Law.


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