Advertising

Advertising Codes

Advertising is effectively controlled by Codes of Practice and the Consumer Protection from Unfair Trading Regulations requirements

Codes of practice are self-regulating industry controls. In some cases, they have been adopted and are enforced by an independent regulator.

The Advertising Standards Authority implemented the first British code of advertising practice in 1962. It has been significantly broadened in scope to cover other media.

The Unfair Trading Regulations protect against unfair and aggressive marketing practices, misleading advertisements and comparative advertisements. They apply to advertising to consumers. Similar but more limited regulations apply to business to business advertising.

UK advertising codes include the

• code of advertising practice for non-broadcasting advertising
• sales promotion and direct marketing code
• advertising practice code for broadcast advertising

The CAP code applies to most printed advertising including in newspapers emails texts promotional media in public places banners and website articles

The BCAP code applies to all ads that appear on TV and radio licence by Ofcom. The primary obligation rests with broadcasters who are bound by the terms of their broadcast licences to ensure compliance with the codes. Television advertisements must be specifically cleared with the body Clearcast. Many radio advertisements must also be cleared in advance.

The codes make specific provisions in respect of certain types of advertising including distance selling and customer database maintenance.

Obligations of Advertisers

All UK advertisers must comply with the codes. The codes are detailed and contain a range of general principle and many further specific provisions. The broad general principles of the codes provide that advertising must be

• legal decent honest and truthful
• not mislead the public
• be prepared with a sense of responsibility to consumers and society
• not cause harm or serious /widespread offence
• respect the principles of fair competition
• be clearly identified as advertising

Advertisers are obliged to comply with the spirit and letter of the code

Advertisers must have and retain evidence to support advertising claims that are likely to be taken as statements of fact. They must be accurate for the duration of the claim and be verifiable. Statements of opinion hyperbole et cetera should not be included unless they very clearly appear as such and are not likely to be relied on by consumers

Advertising must not materially mislead consumers or be likely to so do. The relevant information should be supplied in clear language. Material information should be included. Material limitations and qualifications should be clearly set out. They should not contradict the basic headline claim. Where there are limits on space so that is not possible to communicate extensive terms and conditions account will be taken.

Information must not be presented in a way that is misleading, even if literally true. The overall impression of the ad must be such that it is not likely to mislead.

Price claims must be clear and accurate. It must be clear what is included and not included and how the price will be calculated. Non-optional taxes must be included in the price. Expressions in respect of price such as “from or up to” must be a fair reflection of the overall price range and must not exaggerate the stock of goods at the lower price.

Comparisons must be supported by documentary evidence. Where they identify competitors, they must compare material verifiable features of the product or service. The comparison must relate to identical or sufficiently similar goods or services. The basis of comparison must be clearly set out.

Comparisons must not be misleading regarding the characteristics of products or services or be unfairly selective. The must not cause confusion, denigrate competitors or take unfair advantage of another’s reputation et cetera

There are specific rules in respect of sales promotions. The promotions must be undertaken fairly equitably efficiently and honourably. An estimate of the availability of prizes and benefits be reasonable. The must not unfairly raise consumers’ expectations. The significant terms and conditions must be made clear to customers in initial marketing. Complete terms and conditions should be available. Detailed and complex terms and conditions should be avoided.

Advertising promotions must comply with gambling legislation which restricts unlicensed lotteries and promotions involving an element of chance.

Specific Rules

There are further specific rules in respect of

• advertising targeted at children
• medicine medical devices health products beauty products
• charities
• gambling
• alcohol and tobacco
• motoring
• financial products services and advice

The Advertising Standards Authority monitors and enforces the self-regulatory system. It is funded through a levy on advertising. It covers online advertising, video, on demand services and social networking

Enforcement

There is a complaints process in the relevant codes. The ASA acts as an independent adjudicator on complaints under the advertising codes. They handled by a Council.

The complaint process is free of charge. Any business or consumer may make a complaint. The Authority requires that business competitors seek to resolve their complaints informally first before investigation.

The ASA publishes the complaints handling procedure to which it adheres. The complaint is undertaken in writing. The ASA nominates a hander wow may liaise with parties. Where a complaint is made, notice is given to the advertiser which must respond promptly in relation to the complaint.

An advertiser may voluntary withdraw or change an advertisement the subject of a complaint. Other steps may be required to be taken. If sufficient steps are taken to resolve the complaint the ASA may decide not to publish details of the complaint on its website.

If the matter proceeds to a formal adjudication, a full investigation is undertaken. The advertiser has the onus of justifying and substantiating its claims.

The draft decision is prepared, on which all parties may comment. It is presented to the council who undertake the ultimate adjudication. The council does not necessarily adopt a decision in accordance with the recommendation.

There is no power to fine. It may order changes in advertisements. It may order withdrawal. It publishes adverse findings.

In the case of severe infringements, it may convene a committee of advertising practice to apply other sanctions. They may include

• withdrawal of trading rights
• requiring media to refuse advertisements
• require future advertisements to be checked in advance
• blocking non-compliant advertisements

In serious cases the matter may be referred to the Competition and Markets Authority and be the subject of a complaint under the legislation.

B2B Advertising

Most legislation in the area of advertising and trading practices, seeks to protect consumers. The Misleading Marketing Regulations pursuant to EU directive, protects in respect of business to business marketing and advertising. The legislation complements the Unfair Commercial Practices legislation in respect of consumers.

Advertising is misleading if in any way, including its presentation,  it deceives or is likely to deceive the traders to whom it is addressed or whom it reaches or by reason of its deceptive nature is likely to affect their economic behaviour and as such that it thereby injures or is likely to injure a competitor.

Account is taken of all of the circumstances of the advertising including

• the nature of the product
• the price and the manner in which it is calculated
• the conditions on which the product is supplied
• the nature and activities of the advertiser including matters such as awards qualifications assets identity et cetera

Comparative advertising is permitted provided it meets certain conditions. It must not be misleading by way of inclusion or omission. It must compare products meeting the same needs or intended for the same purposes. It must objectively compare one or more material relevant verifiable and representative features of products. This may include price.

Comparative advertising must not create confusion between traders. This includes confusion between the advertiser and competitor or between the trademarks trade names and other distinguishing marks of the advertiser and competitor.

The advertising must not discredit or denigrate the trademarks, trade names or other distinguishing marks products, activities or circumstances of the competitor. Where products have a designation of origin, the comparison must relate to products of the same designation.

The comparison must not take unfair advantage of the reputation of the trademark trade name or other distinguishing marks of the competitor or the designation of origin of competing products.

A person or body who promotes a code of conduct must not promote or permit misleading or comparative advertising.

Breach of the regulations is an offence, prospectively subject to prosecution in the Magistrates Court (fine up to £5,000) or in the Crown Court on indictment with an unlimited fine or up to 2 years’ imprisonment.

Officers of companies may be individually guilty if an offence is committed with the consent or connivance or attributable to their neglect. Proceedings must be commenced within three years.

It is a defence for a person to prove that the commission of the offence was due to

• a mistake
• reliance on information supplied to him by another
• the act or default of another person or other cause of circumstances beyond his control.

The person who innocently publishes an advertisement who is in the business of publishing or arranging advertising or who receives the advertisement in the ordinary course of business and has no reason to suspect that its publication would amount to an offence, has a defence.