The Impact and Ethics of Advertising in Shaping Consumer Perception

Every time you scroll through your phone, watch television, or walk past a billboard, you are being influenced – sometimes informed, sometimes persuaded, and sometimes manipulated. Advertising is one of the most powerful forces shaping consumer behavior in modern India. It tells you what to buy, what to aspire to, and occasionally, what to believe about your health, your finances, and your identity. But where does persuasion end and deception begin? Understanding this boundary is not just a matter of ethics – it is a matter of law.

What advertising actually does to consumers 🔗

At its core, advertising is a communication tool. It connects producers with potential buyers, provides information about products and services, and drives market competition. When it works honestly, it genuinely benefits consumers. A first-generation smartphone buyer in a tier-2 Indian city learning about EMI options through an ad, or a rural farmer discovering a government crop insurance scheme through a Doordarshan commercial – these are advertising’s constructive contributions. It creates awareness, educates buyers, and expands access to choices that consumers might otherwise not know exist.

But advertising also does something more subtle: it shapes desire. Through carefully crafted visuals, music, celebrity endorsements, and emotionally charged narratives, ads do not merely reflect what consumers want – they actively construct those wants. Research on advertising’s influence on consumer behavior confirms that repeated exposure to an advertisement builds familiarity with a product, and that familiarity translates into purchase preference. This is not inherently wrong, but it becomes ethically problematic when those desires are manufactured artificially – when consumers are nudged toward buying things they do not need, through emotional triggers rather than rational information.

The creation of artificial needs 🔗

One of the most significant criticisms of advertising – particularly in a developing consumer economy like India’s – is the creation of artificial needs. An advertisement for a fairness cream does not merely inform you that a product exists; it implies that your current skin tone is a problem that requires a solution. An ad for an energy drink does not just offer you a beverage; it suggests that without it, your performance and social standing are inadequate. This kind of advertising operates not on the strength of the product but on the insecurity of the consumer.

This psychological dynamic is well-recognized in advertising studies. Studies on online advertising and buying behavior show that marketers exploit emotional weaknesses through complex algorithms and targeted messaging, nudging consumers toward impulsive purchases. In the digital age, this practice has become especially refined. Platforms collect data on browsing behavior, purchase history, and social interactions to serve hyper-personalized ads designed to trigger a response – not necessarily a rational one.

Dark patterns: manipulation by design 🔗

A particularly concerning form of manufactured urgency and manipulation is what regulators now call “dark patterns.” The Advertising Standards Council of India (ASCI) has identified several such practices on digital platforms: drip pricing (where only a partial cost is shown until the final checkout), false urgency (claiming limited stock when there is none), bait and switch (advertising one product then redirecting the buyer to another), and disguised advertising (where influencer promotions are presented as personal recommendations without disclosure). In FY 2021-22, ASCI found that nearly 29% of advertisements it processed were disguised as organic content by influencers – a figure that points to a systemic problem in how commercial intent is hidden from ordinary consumers.

Positive roles: education, awareness, and market efficiency 🔗

It would be reductive to view advertising solely through the lens of manipulation. Advertisements have played a meaningful role in public health campaigns – from promoting hand hygiene during the COVID-19 pandemic to the decades-long “Pulse Polio” campaign that used advertising to achieve one of India’s greatest public health victories. Campaigns like “Jago Grahak Jago,” run by the Department of Consumer Affairs, use advertising methods to educate consumers about their rights, rather than to sell a commercial product.

In competitive markets, advertising also drives price transparency and product differentiation, which benefits consumers by enabling informed comparisons. Small businesses and startups use affordable digital advertising to reach niche audiences, leveling the playing field against established brands. The problem is not advertising itself – it is advertising that crosses the line from persuasion into deception.

When advertising becomes misleading: the legal definition 🔗

Indian law has drawn this line clearly. Section 2(28) of the Consumer Protection Act, 2019 defines a misleading advertisement as one that falsely describes a product or service, gives a false guarantee, conveys an implied representation that amounts to an unfair trade practice, or deliberately conceals important information. This four-part definition is comprehensive and deliberately broad – it covers not just outright lies, but also the kind of technically true but functionally deceptive claims that many advertisers rely on.

Consider a coaching institute advertising “500 selections in competitive exams” without disclosing that the vast majority of those students only attended a free weekend seminar. The claim is numerically true, but the omission of context makes it functionally false. The CCPA fined Drishti IAS ₹5 lakh for exactly this kind of deceptive omission – out of 216 claimed UPSC selections, 162 had only attended a free interview guidance program, a fact the advertisement deliberately concealed.

Types of misleading advertisements 🔗

Misleading advertisements take several common forms. False claims involve stating something untrue about a product’s features or benefits – for example, a slimming product guaranteeing specific weight loss measurements without scientific basis. Exaggerated claims overstate genuine benefits to a degree that creates unrealistic consumer expectations. Omission of material information – like hiding significant terms and conditions in illegible fine print – is also covered. Surrogate advertising, where a banned product (such as tobacco or alcohol) is promoted under the guise of advertising a permitted product like soda water or music CDs bearing the same brand name, is specifically addressed by the CCPA’s 2022 Guidelines on Prevention of Misleading Advertisements. Bait advertising, where consumers are lured in with an attractive offer that is not actually available, is similarly regulated.

The regulatory framework protecting consumers 🔗

India’s approach to regulating advertising combines statutory enforcement with industry self-regulation. At the top of this structure sits the Central Consumer Protection Authority (CCPA), established under Section 10 of the Consumer Protection Act, 2019. The CCPA has sweeping powers: it can direct the modification or discontinuation of any misleading advertisement, impose financial penalties, and even prohibit an endorser from making endorsements for a defined period.

The penalties are significant. For a first offence, a manufacturer or endorser can face a fine of up to ₹10 lakh and imprisonment of up to two years. For repeat offences, the fine can reach ₹50 lakh and imprisonment up to five years. Endorsers – including celebrities and social media influencers – can be banned from endorsing any product for up to one year on a first offence, extending to three years for subsequent violations. These penalties apply because the law recognizes that an endorser is not a passive vehicle for someone else’s message; they lend credibility to a claim and bear responsibility for its truthfulness.

Alongside the CCPA, the Advertising Standards Council of India (ASCI) functions as a self-regulatory body. The ASCI Code requires that advertisements be truthful, not abuse consumer trust, not exploit a consumer’s lack of knowledge, and not distort facts through implication or omission. While ASCI’s guidelines are voluntary and carry persuasive rather than binding authority, they act as an important first line of response – and unresolved ASCI complaints can be forwarded to the CCPA for statutory action.

Sector-specific laws add further layers. The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 prohibits advertisements claiming to cure diseases listed in its schedule – including diabetes, cancer, tuberculosis, and hypertension. The Food Safety and Standards (Advertisements and Claims) Regulations, 2018 govern health and nutritional claims in food advertising. The Cigarettes and Other Tobacco Products Act, 2003 completely bans direct and indirect tobacco advertising across all media.

Landmark cases: law meeting practice 🔗

Indian Medical Association v. Union of India – the Patanjali case (2022-2024) 🔗

No discussion of misleading advertising in India is complete without examining the Patanjali case. In 2022, Patanjali Ayurved published an advertisement titled “Misconceptions Spread by Allopathy,” claiming that its products could scientifically cure a range of serious diseases – while simultaneously denigrating allopathic medicine and COVID-19 vaccines. The Indian Medical Association filed a petition before the Supreme Court, alleging that the advertisements violated the Drugs and Magic Remedies Act and the Consumer Protection Act, 2019.

What followed was one of the most significant judicial interventions in Indian advertising history. The Supreme Court repeatedly warned Patanjali, extracted an undertaking from the company’s counsel that no further misleading claims would be made, and then – when Patanjali continued publishing false claims in violation of that undertaking – issued contempt notices requiring Baba Ramdev and managing director Balkrishna to appear personally before the court. The Court refused to accept unconditional apologies and issued mandatory directions requiring all advertisers to file self-declaration certificates before broadcasting or publishing any advertisement. Critically, the Court also held that celebrities and social media influencers are equally liable for misleading advertisements if they endorse deceptive products – a declaration that significantly expanded advertiser accountability in India.

The Supreme Court’s April 2024 order went further, explicitly criticizing both central and state government bodies for failing to adequately enforce existing consumer protection laws – a recognition that the problem was not the absence of legal framework, but the inadequacy of enforcement.

CCPA v. VLCC – false body transformation claims 🔗

The CCPA fined VLCC ₹3 lakh for advertising its CoolSculpting slimming programme with claims of losing specific centimetres and weight in a single session, supported by before-and-after images that misrepresented results. The authority found the claims unsubstantiated and the images manipulated – a direct violation of the right to accurate information under the Consumer Protection Act.

Ethics in advertising: beyond legal compliance 🔗

Legal compliance sets the floor – it defines what an advertiser cannot do. Ethics asks what an advertiser should do. The gap between these two standards is where most advertising controversies live. An advertisement may be technically lawful yet still exploit cognitive biases, manufacture insecurity, or target vulnerable groups such as children or the elderly with disproportionate emotional pressure.

The CCPA’s 2022 Guidelines reflect this ethical dimension in their provisions on children’s advertising, requiring that advertisements not create unrealistic expectations in children’s minds or make unsubstantiated health or nutritional claims targeting them. The guidelines also address disclaimer requirements – a disclaimer cannot be used to contradict the main claim of an advertisement, and it must appear in the same font size and language as the claim it modifies. This directly targets the common practice of making a bold, attractive claim in large text while burying important qualifications in illegible fine print.

Ethical advertising ultimately serves the advertiser’s long-term interest as well. ASCI has noted that dark patterns and manipulative advertising tactics eventually damage consumer trust and increase abandonment rates – undermining the very commercial relationships they were designed to exploit. Responsible advertising, by contrast, builds brand loyalty and consumer confidence over time.

Where the law still falls short 🔗

Despite a robust framework, India’s advertising regulation has meaningful gaps. Scholars at IIM Kozhikode have pointed out that the Consumer Protection Act, 2019 does not clearly define what constitutes “unfair” within its definition of a misleading advertisement, leaving room for interpretive ambiguity. The Act also does not create a public interest litigation mechanism – only consumers or the CCPA can initiate action, leaving rival firms without a formal avenue to challenge competitor deception in consumer forums.

The digital advertising landscape presents its own challenges. Influencer marketing, programmatic advertising, and AI-driven personalization have far outpaced the regulatory imagination of even recent statutes. The CCPA’s 2023 Guidelines on Dark Patterns address some of these concerns, but the sheer volume and speed of digital advertising make comprehensive enforcement a significant practical challenge. Consumer awareness – knowing one’s rights and knowing how to exercise them – remains the most essential complement to any legal framework.

What do you think? Should celebrities who endorse products they have never personally used face criminal liability under consumer protection law – or is civil liability sufficient to deter misleading endorsements? And with AI now generating personalized advertisements at scale, do you think existing legal definitions of “misleading” are adequate to address manipulation that is invisible to the consumer?

References

1. https://www.researchgate.net/publication/380325184_Advertising_as_An_Influencing_Factor_on_Consumer_Behavior
2. https://www.jetir.org/papers/JETIR2403175.pdf
3. https://www.socialsamosa.com/2022/11/asci-reveals-dark-patterns
4. https://doca.gov.in/ccpa/
5. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2085748&reg=3&lang=2
6. https://www.business-standard.com/topic/misleading-ads
7. https://elplaw.in/leadership/guidelines-on-misleading-advertisements-in-india/
8. https://prsindia.org/billtrack/the-consumer-protection-bill-2019
9. https://www.lawcurb.in/post/advertising-laws-ethical-standards-asci-code-consumer-protection-act-2019
10. https://www.snrlaw.in/misleading-advertisements-a-cautionary-tale-on-advertisement-of-consumer-goods-and-services/
11. https://www.lexology.com/library/detail.aspx?g=41334f4a-bb85-4658-b7dc-c34d0f9d11e2
12. https://www.scconline.com/blog/post/2024/05/07/patanjali-misleading-ads-case-celebrities-social-media-influencers-equally-liable-endorsing-misleading-ads-supreme-court/
13. https://www.vintagelegalvl.com/post/consumer-rights-in-india-fight-against-misleading-advertisements
14. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1832906
15. https://www.business-standard.com/article/management/manipulation-by-online-ads-to-mould-consumer-behaviour-under-asci-radar-122111000747_1.html
16. https://forms.iimk.ac.in/research/markconf20/Proceedings/293.pdf