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Chapter I. Introduction
 
1.1. Nature of misleading advertising 
An advertisement has informative function which facilitates the flow of commercial 
information from a manufacturer to a consumer. Since consumers search the information about 
available products to make purchasing decision, producers try intensively to persuade consumers 
about qualities, price and other characteristics of their products. The use of deceptive selling tactics 
in advertisement aims to manipulate consumers and most frequently causes misleading effect. 
Misleading advertising, as commercial information, can actually or potentially deceive consumers 
by affecting their economic behavior.
1
Such type of advertising creates unfair advantage in the 
marketplace.
2
Therefore, government needs to filter deception from commercial information flow 
in order to determine and regulate misleading advertising. However, the complexity of misleading 
advertising regulation requires to provide balance of competitors, consumers and government 
interests in the market. 
1.2. Problem background 
Over 130 years, the economy of Uzbekistan was under the influence of Soviet Union, 
where market was managed by administrative command methods in centrally planned way.
3
Particularly, due to the supremacy of social (state) ownership, competition in the market did not 
exist at all and advertisement deemed as an announcement in manufacturing, which was planned 
in advance and regulated in administrative way.
4
1
Misleading advertising harm consumers by causing them to have false beliefs about the nature of the products 
being advertised and thereby causing them to make different purchasing decisions than they would have made 
otherwise and purchase things unsuitable for their needs. See Thomas L. Carson, Lying and Deception: Theory and 
Practice (Oxford, New York: Oxford University Press, 2010). 
2
Paul Rubin describes deception as manipulation of information to gain some advantage. See Roger Van den 
Bergh and Alessio Pacces, Regulation and Economics, Revised ed. edition (Cheltenham, UK: Edward Elgar Pub, 
2012). p.138. 
3
“History of Uzbekistan,” The Government portal of the Republic of Uzbekistan, The Cabinet of Ministers, 
(1997). 
4
Боймурод Улашов, Competition Policy in Uzbekistan [Конкурентная Политика в Узбекистане] (Tashkent: 
State Committee for Demonopolization and Development of Competition of the Republic of Uzbekistan, 2010). p.20. 

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After gaining independence, Uzbekistan developed its own Uzbek Model for market 
transition.
5
The Model aims to build socially-oriented free market economy which based on 
gradualism and state-led approaches.
6
One of the main focuses of the model is to provide free and 
fair competition, which ensure free information flow in the market. However, during a quarter-
century of independence, Uzbek Model has had a failure in this matter. In particular, it provides 
for a high level of government interference in socio-economic process and limits development of 
competition, and therefore, this economic model clearly fails to provide real conditions for 
competition in the market.
7
Newly elected President Shavkat Mirziyoyev has started full-scale reforms, which 
acknowledged as positive changes in political and socio-economic life of Uzbekistan.
8
He declared 
that improvement on the business environment through liberalization measures in trade is one of 
the top policy priorities in Uzbekistan.
9
In February 2017, the President initiated the Strategy for Further Development of 
Uzbekistan in 2017-2021
10
. The strategy contents five-area actions, where one of the main areas 
is liberalization of the economy.
11
Accordingly, the State Program on Development Strategy 
5
The basis of Uzbek Model have laid down five principles of transition to a market economy: 
1) De-
ideologization of economy and its priority over politics, 2) Entrusting the state with the role of the main reformer; 3) 
Ensuring the rule of law; 4) Implementation of strong social policies; and 5) Gradual adoption of reforms. See Diloram 
Tashmukhamedova, “The Uzbek Model of Economic Reform in the Global Financial and Economic Crisis,” April 
22, 2013. 
6
Diversifying Uzbekistan (Uzbekistan The Asian Development Bank, January 28, 2011).; G. N. Khaki and 
Riyaz Ahmad Sheikh, “Uzbekistan: Karimov’s Model of Economy; Dynamic or Paradox A Critical Study,” Studies 
in Asian Social Science 3, no. 1 (January 31, 2016): 54.p54. 
7
The director of the Center for Economic Development, Yuliy Yusupov stated that Uzbek Model limits personal 
initiative and development of private enterprises as well. See Ikrom Nosirov, “New Uzbek Leader’s Reforms Greeted 
Warily,” Nikkei Asian Review, December 22, 2016; See also Rafael Sattarov, Is the Uzbek Development Model a 
Path towards True Modernization?, Central Asian Bureau for Analytical Reporting, CABAR.Asia, (November 25, 
2016). 
8
Islam Karimov's death creates uncertainty, first for Uzbekistan but also for neighbors and major powers, all 
with strong interest in the strategic state's stability. The transition's first stage has been smooth. Shavkat Mirziyoyev, 
prime minister since 2003, has emerged as the main leader and expected to be elected president on December 4. See 
“Uzbekistan: In Transition,” BRIEFING 82 / EUROPE & CENTRAL ASIA, Crisis Group, (September 29, 2016).
9
President Mirziyoyev signaled a willingness to reform economic and foreign policy. See Brent Hierman, 
Russia and Eurasia 2017-2018 (Rowman & Littlefield, 2017). p.7. 
10
Mirzokhid Rakhimov, “New Priorities of Uzbekistan,” Columbia JIA, Columbia/SIPA, April 17, 2017, 
https://jia.sipa.columbia.edu/online-articles/new-priorities-uzbekistan. 
11
The strategy covers five main priorities: improvement of state construction, judicial and legal system, 
economic liberalization, development of the social sphere, and implementation of active foreign policy. See “Priority 
Areas of the Development Strategy,” Official web page, Development Strategy Center, (2017).

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determined the task on struggling against counterfeit in manufacture and sale of goods, which 
intends to prevent unfair competition and to protect manufacturer and consumers rights.
12
The task 
should have been accomplished by research-based and legislative amendment proposals until June 
2017.
13
However, there is no legislative and research proposal on this matter yet. Furthermore, 
although specific Law on Advertising of Uzbekistan (Advertising Law) was adopted in1998, legal 
provision on misleading advertising has not been amended since 2002.
14
Also general acts such as 
the Law on Competition (Competition law) and Law on Consumer Rights Protection (Consumer 
Protection Law) have remained unchanged without any progressive and effective provisions on 
misleading advertising.
15
One could ask why Uzbek Government is not satisfied with current regulation of 
misleading advertising and wants to change its legal framework? The answer on this question is 
that the current regulatory approach on misleading advertising in Uzbekistan is very strict and 
ineffective, even it can bring harmful consequences. In particular, the Article 13 of Advertising 
Law defines misleading advertising as improper advertising which, along with deceptiveness 
standard, has non-deception standard as well. This non-deception standard refers to the violation 
of time, place and manner of advertising which does not have a capacity to mislead consumers. 
Moreover, this ambiguous legal framework of improper advertising gives an opportunity for 
government to intervene in free commercial speech of entrepreneurs in a administrative way. As 
a result, traders are unreasonably punished for non-deceptive actions and free flow of commercial 
information is limited by government. Consequently, consumers cannot access to the information 
about products and services which they need for purchase and they lost their confidence as demand 
side of the market. While government is anxious and busy with non-deceptive standard, unfair 
12
This task is one of the prior tasks among the other tasks for creating and promoting effective competition in 
the area of economic liberalization. See “Ўзбекистон Республикасини янада ривожлантириш бўйича Ҳаракатлар 
стратегияси тўғрисида,” Official web page, The President of the Republic of Uzbekistan, (July 7, 2017). 
13
Ibid 97. 
14
Amendments of 2002 added the concept of counter-advertising to the Law. See Law on Advertising of the 
Republic of Uzbekistan [Ўзбекистон Республикасининг “Реклама тўғрисида”ги қонуни] (Uzbekistan 1998). 
15
See Law on Competition of the Republic of Uzbekistan [Ўзбекистон Республикасининг “Рақобат 
тўғрисида”ги Қонуни] (Uzbekistan 2012).; Law on Protection of Consumer Rights [Ўзбекистон 
Республикасининг Қонуни Истеъмолчиларнинг Ҳуқуқларини Ҳимоя Қилиш тўғрисидa] (Uzbekistan 1996). 

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competitors use misleading advertising as a tool to manipulate consumers.
16
Thus, the State 
becomes unable to carry out its function on market regulation, especially it cannot keep balance 
between competitor and consumer interests, and mostly, the State fails to provide constitutional 
guarantee on economic freedom and legal protection of consumer rights.
17
Furthermore, foreign 
investors, who observe such situation in Uzbek market, feel mistrust to the government and 
disbelief to the legal system of Uzbekistan which might cause very negative impact on the Foreign 
Investment Policy of the country.
Furthermore, the practice shows that the number of improper advertising has increased year 
to year. 
Figure 1. Dynamic change of improper advertising (in number and percentage)
18
Therefore, the research aims to make a significant contribution on future reforms according 
to the Development Strategy of Uzbekistan taking into account domestic prerequisites and through 
making comparative analysis of the related legal systems in order to propose an effective 
regulatory approach on misleading advertising.
16
An interview with Dilshod Azimov, Head of department of Advertising Control and Consumer Right 
Protection at the Competition Committee of Uzbekistan. See Dilshod Azimov, “Sell, but Do not Manipulate” 
[Продавать, а не манипулировать], Economic Review [ЭКОНОМИЧЕСКОЕ ОБОЗРЕНИЕ] 11, no. 191 (2015): 
20–26. 
17
In accordance with the Article 53 of Constitution of Uzbekistan, the State guarantees freedom of economic 
activity and entrepreneurship with due regard to the priority of consumer`s rights. See Constitution of the Republic of 
Uzbekistan [Конституция Республики Узбекистан] (Uzbekistan 1992).
18
Source: Annex 5 of the Annual Reports of the Antimonopoly Committee of the Republic of Uzbekistan in 
2009-2016 (only the “percentage” was calculated by author based on the Annual Reports) 
Осно
вной
Осно
вной
Осно
вной
Осно
вной
Осно
вной
Осно
вной
Осно
вной
Осно
вной
Year
Основно
Основно
Основно
Основно
Основно
Основно
Основно
Основно
Violations of the Advertising
law
Основно
й
Основно
й
Основно
й
Основно
й
Основно
й
Основно
й
Основно
й
Основно
й
Improper advertising
Основно
Основно
Основно
Основно
Основно
Основно
Основно
Основно
percentage
63%
16%
6%
20%
28%
38%
34%
30%
Основной
Основной
Основной
Основной
Основной
Основной
Dynamic change of the number improper advertising and its 
percentage regarding to total violations of the Advertising law 
in Uzbekistan

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The second main question arrived in this issue is how to regulate misleading advertising in 
Uzbekistan? An answer to this question requires examine theoretical framework of the issue.