An ad campaign against the Indian film industry has triggered a legal challenge in the US, which has threatened to force the online retailer to take down the ad.
The court said that a disclaimer from the company stating that it did not endorse the movie or any content in the film, and that it does not accept money from or to promote films, violated the law.
The Federal Court of Appeals said that the ad was “likely to incite” and “promote violence, hate and hatred, and to defame and disparage persons”.
The case was filed by US filmmaker and producer Rajiv Sethi in March.
Sethi, who was a star of the blockbuster film “The Salesman”, said that his film had been wrongly labelled as “a political film”.
“Million Listing did not know that the film was politically incorrect,” he told the court.
The company was contacted by The Hollywood Reporter on Friday morning to say that it had received a complaint about an advertisement in which a fictional Indian film was criticised for glorifying violence, but did not disclose that the company had taken down the advert.
The advert was a parody of a popular US TV show, The Salesman, which satirised the Indian economy.
The US-based firm also declined to comment on the lawsuit.
The film was originally shown in theatres in the United States and Canada in 2016.
But it has been criticised for being politically incorrect and insulting Indian society.
It has been banned in many countries.
US Senator Dianne Feinstein, who represents California, said in a statement on Friday that the case was “an outrage”.
“This type of political propaganda should never have been allowed to take place, and is repugnant to anyone who cares about free speech,” she said.
The Supreme Court ruled in November that Congress can bar political advertising.
In a separate case brought by the New York Times in April, the court ruled that the newspaper’s decision to include the film in its list of “100 Greatest Films of All Time” violated the First Amendment.