Addressing the Issue: ASCI’s Role and the Limits of its Authority

In the absence of a comprehensive advertising law in India, the Advertising Standards Council of India (ASCI) has emerged as a key player in regulating the advertising landscape. However, while ASCI’s role in maintaining ethical standards is significant, it is crucial to understand the limitations of its jurisdiction, especially regarding the binding nature of its recommendations and its authority over non-members.

ASCI’s role and the need for self-regulation

The ASCI is a private, non-statutory body, formed with the purpose of self-regulating advertising content to protect consumers from misleading or unethical advertisements.² It operates through a code of self-regulation that outlines rules and guidelines for advertisers to follow.³ ASCI handles complaints from consumers and competitors, adjudicating on whether an advertisement violates its code.

Given that India lacks a formal advertising law, ASCI’s code serves as the de facto standard for advertising practices. This role is critical, as companies often use advertisements to compare their products with those of competitors, sometimes leading to misleading claims. ASCI’s process provides a much-needed platform for resolving disputes without the necessity of protracted litigation, thus reducing the burden on courts of law. The ASCI’s Fast Track Complaint Process (FTCP) and Consumer Complaints Council (CCC) offer relatively quick resolutions, providing a cost-effective and time-saving alternative to legal proceedings.

The non-binding nature of ASCI’s orders

Despite ASCI’s important role in self-regulation, it is essential to note that its recommendations are not legally binding. Several cases have highlighted this limitation, reinforcing that ASCI lacks the statutory power to enforce its decisions. This is particularly important in cases where companies are not members of ASCI.

In Teleshop Teleshopping v. Advertising Standards Council of India⁴, the Bombay High Court ruled that ASCI’s orders could not be binding on non-members. The Court emphasised that, while ASCI can issue recommendations, these do not have the force of law unless the party submits to them. Similarly, in Century Plyboards (India) Ltd. v. Advertising Standards Council of India⁵, the Court noted that ASCI could not assume powers that are judicial in nature and that its orders do not have any statutory backing.

The Reckitt Benckiser (India) (P) Ltd. v. Advertising Standards Council of India⁶ case reiterated this position. The Court ruled that ASCI’s directions were not enforceable and that Reckitt, as a company, was not bound to follow the Council’s recommendations. ASCI’s role in such disputes remains advisory, allowing advertisers the freedom to seek judicial redress if they feel aggrieved by the Council’s actions.

Freedom of speech and ASCI’s limits

A fundamental issue that arises in ASCI’s jurisdiction is the intersection with commercial freedom of speech. Under Article 19(1)(a) of the Indian Constitution⁷, freedom of speech includes commercial speech, as affirmed by the Supreme Court in Tata Press Ltd. v. MTNL⁸. Advertisements are a form of expression and enjoy protection under this constitutional provision. ASCI, being a private regulatory body, cannot adjudicate on constitutional matters or restrict this right in a binding manner.

While ASCI can recommend modifications or withdrawal of advertisements that it deems misleading, it cannot act as a substitute for courts of law. The principles of natural justice, such as the right to a fair hearing, must be upheld in all quasi-judicial proceedings. In Reckitt Benckiser case⁹, the Court emphasised that ASCI must adhere to due process, including giving parties a fair chance to present evidence and defend their claims.

The Delhi High Court in Sameer Jain v. Union of India¹⁰ further reaffirmed ASCI’s role as a recommendatory body without binding authority. In this case, the petitioners challenged the delegation of regulatory powers to ASCI, arguing that its actions amounted to impermissible delegation of governmental powers. The petitioners contended that ASCI, being a private body, could not lawfully adjudicate on misleading advertisements, a role that rightfully belongs to the Government.

The Court dismissed the petition, clarifying that ASCI does not perform a judicial function. Additionally, the Court stated that ASCI’s role is limited to making recommendations, and its decisions are non-binding. It emphasised that ASCI cannot replace the Central Government in adjudicating matters related to advertising regulations. Moreover, while ASCI can examine complaints and issue recommendations, the final decision-making authority rests with the appropriate Ministry of the Government. This case reinforces ASCI’s function as a self-regulatory organisation with no enforceable powers.

ASCI’s impact on dispute resolution

Despite these limitations, ASCI plays an invaluable role in reducing the burden on courts. By providing a platform for speedy disposal of complaints, ASCI helps resolve disputes that might otherwise escalate into lengthy litigation. The cost of pursuing a legal case, especially in matters of advertising, can be prohibitively high, making ASCI an attractive alternative for companies seeking resolution in a less adversarial setting.

For example, the Reckitt Benckiser and Godrej Consumer Products Ltd.¹¹ dispute over mosquito repellents could have led to costly litigation. Instead, ASCI provided a forum for the parties to present their claims and rebuttals. Even though the Court eventually ruled that ASCI’s recommendations were non-binding, the process provided both parties with a structured platform to resolve their issues without immediately resorting to the courts.

ASCI’s importance also lies in creating a uniform set of guidelines that all advertisers are encouraged to follow. This helps prevent misleading or denigrating advertisements, especially in cases of comparative advertising, where brands often make claims of superiority over competitors. ASCI’s guidelines serve as a deterrent against false claims and provide a reference point for advertisers to ensure compliance with ethical standards.

ASCI’s code: Filling a regulatory void

In India, where there is no comprehensive advertising law, the ASCI code acts as a vital tool for regulating the content of advertisements. The code outlines what constitutes misleading, harmful, or denigrating content, and helps maintain a level of trust between consumers and brands. Furthermore, ASCI has admitted to its regulatory role in dealing with complaints in Muthoot Finance Ltd. v. Advertising Standards Council of India¹², wherein ASCI submitted that “the aforesaid decision is only in the nature of a recommendation and is not binding on the plaintiff Company”. The ASCI, therefore, ensures that companies are held accountable for their advertising claims in a structured manner without interfering in a judicial capacity. As noted in Muthoot Finance case¹³, the ASCI communicates its decisions/recommendations to the Ministry of Information and Broadcasting and the Department of Consumer Affairs to take appropriate action on the complaint.

However, ASCI’s role remains advisory and non-binding. Companies are free to challenge its decisions, as seen in the abovementioned precedents, and courts have consistently upheld the principle that ASCI cannot act as a judicial authority.

Conclusion: A delicate balance

While ASCI is not a statutory body and its orders are not legally binding, it holds a crucial position in India’s regulatory framework for advertising. By offering a fast, cost-effective mechanism for resolving disputes, ASCI significantly reduces the load on courts, saving time and resources for both the judiciary and the parties involved. However, it is essential to recognise the limits of ASCI’s jurisdiction, particularly its non-binding nature, and its inability to impinge on commercial freedom of speech.

Ultimately, ASCI serves as a mediator rather than an enforcer, pushing parties toward settlements and helping maintain ethical advertising standards in India. Its role, while not judicial, remains indispensable in a country where formal advertising regulation is still lacking. The balance between ASCI’s regulatory function and the protection of free speech ensures that advertisers operate within a framework that is both fair and conducive to market competition.