Companies could soon find it difficult to get away with tall claims about their products or making insinuations against their competitors. A newly-formed apex panel on competition is set to define the limits of acceptable advertising. These guidelines, although not mandatory, will be deterrent to unethical campaigns as they would form the regulatory benchmark on the subject.
According to official sources, Competition Appellate Tribunal (CAT), the quasi-judicial body empowered to look into unfair trade practices, will spell out the ?dos? and ?don?ts? for electronic and print ads in a first-of-its-kind move in the country. The CAT guidelines could force brands to revisit their commercial plans and re-look at their ad campaigns. ?The tribunal is committed to discontinuing the practice of companies making disparaging comments about competitors to hype their own products. You can blow your own trumpet, but cannot denigrate your competitors,? CAT chairman Arijit Pasayat told FE in an interview-his first to any newspaper after taking charge in November.
Pasayat added that even a brand claiming to be ?number one?, which is a common trend nowadays, could be interpreted as an unfair practice unless corroborated by reputed market surveys. Some of the likely guiding principles include preventing a company from comparing its products, directly or by implication, with others and restraining a firm from making reference to the ingredients of competing products. ?(The proposed guidelines) are going to have a huge impact,? Pasayat said. This is not the government?s first effort to curb unethical advertising. However, previous moves failed to produce the desired results for want of requisite legal backing. A corporate affairs ministry official said on conditions of anonymity that with its adjudicatory powers, CAT?s guidelines would be hard to ignore.
Since the Monopolies & Restrictive Trade Practices Commission was wound up last year, more than 2,000 cases under its jurisdiction have been transferred to CAT. Of this, a substantial chunk pertains to unfair trade practices. ?Since November, we have cleared more than 200 cases,? Pasayat said.
CAT?s decision to come out with advertising best practices comes barely a month after the tribunal found Kolkata-based FMCG group Emami guilty of disparaging competitor Johnson & Johnson by insinuating that the chemicals used in its baby products are harmful to children. Following this, Emami moved the Supreme Court.
The MRTP Act, 1969, states that an unfair trade practice is when a company ?gives false or misleading facts disparaging the goods, services or trade of another person.? CAT could pave the way for redefining these sections in the months ahead.