Liberalisation and Law on Comparative advertising in India

Akhileshwar Pathak

No WP2004-01-02, IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: With the liberalisation and globalisation of the Indian economy, as could be expected, firms have been aggressively and vigorously promoting their products and services. These practices raise questions about truthfulness and fairness of representation of products and services. Not only the consumers but even the firms need adequate law against unfair trade practices to have some ‘rules of the game’ for competing among themselves. In a competitive environment, every representation of a product or service, is about what ‘others are not’. This paper reviews the law in India on representations (advertisements) which have an element of comparison. The provisions on this aspect formed a part of the Unfair Trade Practices under the Monopolies and Restrictive Trade Practices Act. In the changing context of proliferation of advertisements, the law needed to be further strengthened in its application. To the contrary, even the existing law has been liquidated with the repeal of the Monopolies and Restrictive Trade Practices Act. It has been suggested that the same protection against unfair trade practices have been available under the Consumer Protection Act. Thus, the repeal of the Monopolies and Restrictive Trade Practices Act would not be of any significance. However, within the structure of the Consumer Protection Act, competing firms cannot be ‘consumers’ to approach a consumer forum. The paper illustrates that the opening up of the economy, on its own, is not going to create and sustain competition. Appropriate law, adequate enforcement, infrastructure and quick dispute settlement mechanism would be needed to sustain competition.

Date: 2004-01-02
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