Business: No license to denigrate competitor, says HC on freedom of commercial speech

New Delhi, Feb 17 (IANS) The Delhi High Court has held that while some latitude is to be given for hyperbole and commendatory expression, there can be no license to anyone to denigrate the competitor while dealing with an advertisement issue between two coaching institutes.

A bench of Justice Asha Menon, hearing the lawsuit by FIITJEE against the defendant Vidya Mandir Classes and others, noted that the plaintiff and the defendants are business rivals, and compete for good students so that their effort in establishing a reputation of being a good coaching institute would be fortified.

Both sides would naturally seek to place in the public domain such aspects of their activities that would encourage students to come to their coaching institutes, she noted, but added that while engaging in advertising one’s own products, care is to be exercised to avoid disparagement of anotheraYs products or denigration of the goodwill and reputation built by a competitor.

Malicious falsehood cannot become freedom of speech, the court said in an order passed on Wednesday.

The order said the only question to be seen is, whether the video in question contains any disparagement or defamatory matter. It is then apparent in the video, that the defendant has used very offensive words alleging that the plaintiff would “kidnap” and take the students “hostage” and put them under such pressure and indulge in “extortion” – allegations that are serious, as indicating that the plaintiff has no qualms in indulging in crime for money.

Further, the court directed the defendant to take down portions of its YouTube video alleging falsities against the rival institute.

“There are occasions when the competition takes an ugly turn. To take a cue from the preamble to the Competition Act, 2002, practices having an adverse effect on competition need to be prevented but at the same time, competition must be promoted and sustained to protect the interest of consumers and to ensure freedom of trade carried by all participants in the markets, here the field of education,” it observed.

The bench stated that care is to be exercised to avoid disparagement of another’s products or denigration of their goodwill and reputation.

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