Are the Courts Ready to Put an End to the Rising $15 Billion Menace?

The article 'Are the Courts Ready to Put an End to the Rising $15 Billion Menace?' addresses the legal actions taken against Sephora and Target, alleging deceptive practices in their promotion of 'Clean Beauty' products. These lawsuits specifically shed light on the growing apprehensions regarding the accuracy of claims made by the industry.

Controversy Surrounding 'Clean Beauty' Claims: Sephora and Target Under Scrutiny Amid Industry Expansion

Just around the time, we see a whole bunch of online advertisements and their promotional taglines related to various products, the US cosmetic companies Sephora and Target have been sued for allegedly misleading consumers through their promotional ‘Clean Beauty’ advertisements where the ‘Clean Beauty’ industry is booming the market and expected to cross $15 billion in the next five years.

This article discusses the lawsuit filed and the issue around it in the US and its possible knock on the door for India.

When a product is promoted as ‘clean’ or ‘green’ or ‘natural’, the consumers may not understand these terms in the same way as a producer. If a sunscreen is promoted as ‘Natural’, the consumers may believe that the product is entirely plant-based but the producer may interpret the term as absence in the use of a banned ingredient by a regulator.

This is the actual claim of the class action lawsuit filed against Sephora Inc. where it is claimed that the consumers’ understanding of the term ‘clean’ is inconsistent with that of the brand. The claim against Target states that the brand uses toxic chemicals while promoting the products as ‘Clean’. The absence of defining these terms by the regulator raises serious doubts about the credibility of the products advertised and turns a blind eye to the neglect of the companies invoking serious questions about the safety of the public.

The rising climate consciousness leading to the use of cleaner products fuels a growth in this industry but the difference in the consumer’s understanding of clean and the companies’ standards has placed the companies at risk of being sued.

One of the interpretations of the term ‘clean’ advertised by the brands is the absence of ingredients like propylparaben which cause hormonal imbalances and increase the risk of cancer but the lawsuits have claimed that there is a presence of ingredients that contain propylparaben or other harmful ingredients and is being treated as misleading to the consumers.

So, the leading issue is the various interpretations of the promotional term accompanied by a regulatory vacuum. Sephora has filed a motion to dismiss which will only be succeeded if it is proved that the plaintiff’s claim is not factually correct or admissible in law or failed to show real injury.

Thus, the plaintiffs will have to show that they suffered real injury due to the lack of coherence in the interpretation of these loose and vague terms. Real injury can be the damages on skin or various consequences due to the usage but what is interesting is whether the court will consider problems in understanding the term as injury or they will label that as a puffery.

While this is the scenario in the United States, let us move forward to see how the Indian courts deal with a similar problem. Firstly, it is coherent to look at the regulation in India. The Consumer Protection Act, 2019 defines misleading advertisements as one which gives a false description or false guarantee regarding the nature, quantity, quality, substance and use of the product. The advertisement that coveys an implied or express representation by the company which would be classified as unfair trade practices is also considered misleading. The ‘clean beauty’ is a representation made by the company regarding the nature and substance of the product and the issue boils down to the interpretation of the said term.

In the case of Dabur India v. Colortek Meghalaya Pvt. Ltd., the Delhi High Court held that the advertisement made by the respondents should be seen as puffery and did not cause disparagement and real injury to the plaintiff to the claim brought by Dabur India about the advertisement which allegedly implied that the plaintiff’s product caused rashes and allergies. The judgment referred to Section 30A(x) of the Monopolies and Restrictive Trade Practices Act, 1969 (which was later omitted by an amendment in the Act) and considered advertisements as commercial speech protected under Article 19(1)(a). ‘Clean Beauty’ can be considered as a boast of puffery if specific disparagement is not shown.

As there is a question of interpretation in the issue, let us look at the decision of the Delhi High Court in Horlicks Limited & Anr. v. Zydus Wellness Product Limited. The advertisement by Zydus showed that one glass of its product was equal to two glasses of the plaintiff’s product. The plaintiff claimed that the advertisement was misleading and caused injury to its product. The court decided in favour of the plaintiff showing that the balance of convenience was in favour of the plaintiff who would suffer an irreparable injury as a result of the impugned advertisement. The balance of convenience is an important factor to consider when the issue is related to the interpretation. Taking this judgment as an understanding, it can be said that the balance of convenience will be in favour of the consumers if their interpretation of the disputed term of ‘Clean’ caused an irreparable injury in the class action lawsuit against Sephora Inc.

Conclusion

The issue can be understood through two elements – whether the promotional term used by the companies causes an irreparable injury to the consumers and skews the balancing scale in their favour. I believe that this is the right time for the courts to put an end to this ‘clean beauty’ industry by defining the terms and restricting the interpretations in the absence of a definition by the company. This will ensure that the dilemma in the interpretation does not spread to other industries including food and healthcare which can have hazardous consequences to the consumers while providing a cheat code to the corporations.

References

[1] The Consumer Protection Act, 2019, Available Here

[2] Dabur India v. Colortek Meghalaya Pvt. Ltd., FAO (OS) No. 625 of 2009

[3] The Monopolies and Restrictive Trade Practices Act, 1969, Available Here

[4] Horlicks Limited & Anr. v. Zydus Wellness Product Limited, CS(COMM) 464/2019