Advertising Quarterly Q2 2024: What else? Legal, regulatory and other developments

ASA issues guidance on qualifications in advertisements 

The Advertising Standards Authority (ASA) has issued guidance on the use of qualifications in advertisements. Qualifications cover a wide array of text within advertisements, both online and in-print, including on-screen text, small print and footnotes.

Key pitfalls highlighted by the ASA include:

• Qualifications that create contradictory impressions where the qualification misleadingly contradicts the overall impression of the advertisement, for example, if a website advertises a promotion on 'everything' but includes a qualifier in small text which excludes certain products. 

• Failure to ensure that the qualification is prominent and sufficiently legible.  Unlike TV ads, there is no minimum size for small print and qualifications in non-broadcast ads. However, any qualifications should be sufficiently prominent and easily legible.

• Failure to include a qualification, where a qualification is required.

For more on the use of small print in AI generated ads, see here.

ASA issues guidance on using animals in advertisements

The ASA has issued guidance on the use of animals in advertisements. The guidance can be summarised as follows:

• Ensure your images don't distress or frighten especially where pictures of dead animals are concerned – see the PETA decision in contrast to the Viva! decision.

• Ensure you can substantiate objective claims made in any advertisement including animals – see the Sighthound Welfare decision (concerning claims relating to the dangers of greyhound racing), in contrast to the Pack Pet decision (which claimed that a plant-based diet was healthier for dogs).  

• Take care around the anthropomorphisation, sexualisation and objectification of animals. This includes cartoon and animated animals – see the Oasis Games decision.

• Ensure animals' welfare is treated as a paramount concern.

High Court rules on preliminary issue in comparative advertising claim: Gibraltar v Viovet Ltd

The High Court of England & Wales has ruled on a preliminary issue in a (rare) comparative advertising claim. The claimants, Gibraltar and VetPlus, contended that various adverts made by the defendant, Viovet, in which it compared its own-brand veterinary nutraceutical products with VetPlus' products, constituted trade mark infringement by breaching the Business Protection from Misleading Marketing Regulations 2008. These Regulations require comparative adverts to "objectively compare one or more material, relevant, verifiable and representative features" which may include price.

The complaints related to the following:

• Certain advertisements offered for sale various VetPlus products but, when selected, presented an "Add to Basket" option or a reversible arrows symbol with text stating either "Save £[x] per day" or "Swap and Save [£]" or "Try something new" (which, if clicked, would take the customer to one of Viovet's own-brand products).

• If a customer nonetheless still clicked "Add to Basket" for the VetPlus product, a pop-up displayed both the selected VetPlus product and one of Viovet's own-brand products, along with each product's price (Viovet's being cheaper). In between the two products was a reversible arrows symbol and the customer was presented with an option of clicking either a "Swap and Save" button (which would take the customer to the Viovet product) or a "No Thanks" button (which would enable the customer to buy the originally selected VetPlus Product).

• Certain advertisements (relating to just one VetPlus product, Aktivait), presented the customer with a button stating "Read More". This took the customer to an advertisement for one of Viovet's own-brand products, "RenewMe", which stated that it "contains trusted ingredients found in Aktivait" and was a "more cost-effective option".

The preliminary issue before the Court was the message conveyed by the comparative adverts. The Court held that the message being conveyed was that Viovet's own-brand products which were offered in the alternative to VetPlus's products were comparable in nature, composition, specification, efficacy and/or quality to VetPlus's products.

Whether any of the comparisons were objective, as opposed to misleading, will be for the main trial. The decision emphasises the importance of making sure that comparative adverts meet the legal requirements.

BCAP consults on proposed changes to Code to restrict ads for qualifying cryptoassets to specialised audiences

BCAP has published a consultation on BCAP Code rule 14.5 to explicitly restrict ads for qualifying cryptoassets to specialised financial channels and programmes.

In practice, ads for these products have already been restricted from mainstream broadcast media as a result of being regulated by the FCA in 2023. BCAP proposes introducing a new sub-rule to explicitly name this category of ads as one that should be limited to specialised audiences, as is the case for other types of complex financial products.

This would result in greater clarity for advertisers and broadcasters and ensure that ads for high-risk financial investments are not shown to general broadcast audiences.

ASA publishes annual report for 2023

The ASA has published its 2023 annual report, marking the conclusion of the ASA's previous five year strategy aimed at having "more impact online" and the commencement of its new strategy for 2024 to 2028 on "AI-assisted collective ad regulation". The new strategy will focus on:

• 'People', 'plant' and 'online'. The ASA will: (i) put people first, prioritising protecting vulnerable people in particular; (ii) continue its climate change and the environment project; and (iii) continue and build on its use of its AI-based Active Ad Monitoring system to proactively regulate online advertising. 

• Collective ad regulation & awareness and buy-in. The ASA will continue to work with government and regulators to explore material gaps in legislation. 

• Operational transformation. The ASA will prioritise proactive regulatory projects, adopting a ‘whole system’ approach to ad-related issues that cause the most detriment to people.

The report states that the majority of investigations for 2023 were proactive and directed at non-paid for advertising. The ASA and CAP secured the amendment or withdrawal of 27,378 ads in 2023. 92% resulted from proactive work enabled by the ASA's "Active Ad Monitoring system" and 89% of these were non-paid for ads, posted from organisations' own social media accounts / websites.

The Active Ad Monitoring system, which captures and processes large volumes of online ads from various channels and applies machine learning models to prioritise the most problematic, processed over 500,000 ads per month by the end of 2023.

The report also considers the following areas:

• Climate change. In 2023, the ASA focussed on tackling misleading claims in the energy and transport sectors, including sustainability claims by airlines and misleading omissions by oil and gas companies. The ASA will continue its work in this area in 2024.

• Body image. The ASA focussed on ads targeting UK residents to go abroad for cosmetic surgery. It worked with regulatory counterparts in the UK and abroad and disseminated an Enforcement Notice to hundreds of clinics.

• Youth vaping. The ASA issued an Enforcement Notice which was addressed to over 150 vaping brands. Going forward into 2024, the ASA will be issuing a new Enforcement Notice that addresses most, if not all, of the key players and spans across all social media platforms and all types of advertising.

• Interim platform principles. 2023 also saw the conclusion of the ASA's one-year pilot Intermediary and Platform Principles initiative, focused on bringing digital businesses more closely into the ASA system. In October, the ASA independently concluded “without question, that over the course of the twelve-month pilot the 10 participating companies implemented the Principles that were applicable to the services they offer… (and) demonstrably supported the ASA” to regulate ads online. As a consequence, IPP now offers a tried-and-tested way in which platforms and intermediaries can play a part, and be seen to play a part, in supporting the ASA to help secure responsible advertising online. In 2024, the ASA is committed to championing how the ASA thinks the regulatory framework should develop.

ASA outlines plans relating to environmental claims in food and drink ads

The ASA has published research into people's understanding of environmental claims in food and drink ads, concluding that, while widespread enforcement action is not needed, some issues would benefit from further dialogue and consideration. It recommends, in particular:

• Continued engagement with the CMA, Defra and industry stakeholders on its findings, as well as work with DEFRA and the Institute of Grocery Distribution to gather information to inform recommendations to the UK government ahead of a consultation on a food eco-labelling scheme.

• Providing further guidance to industry, expanding some of the key themes including ‘green’ and ‘natural’ imagery, sustainability and regenerative farming-related claims. 

• Additional monitoring and follow-up engagement of clear-cut breaches of existing ASA Rulings and Guidance, and potential formal investigations of less clear-cut instances of non-compliant advertising within this sector. 

• Continued monitoring for potential misleading ‘green’ imagery issues.

• Industry engagement on regenerative farming aimed at producing related guidance. 

ASA issues advice on privacy rules

The ASA has published advice on the privacy rules detailed in sections 6 and 10 of the CAP code. In summary, the guidance includes the following: 

• The Royal Family. Members of the royal family shouldn't be shown or mentioned in ads, except under certain circumstances. 

• Members of the public. If an advertisement refers to anyone in an adverse or offensive way, under the Code, it is only acceptable if the advertiser had written permission from that person to do so. 

• Private Property. If an ad shows someone's house and the address could be easily identified, permission should be sought. 

• People with a public profile. If someone is in the public eye, they still have a right to privacy.

CAP updates its guidance on advertising in-game purchases

Following a review by CAP, minor amendments have been made to CAP and BCAP's guidance on in-game purchases, including loot boxes. The guidance, initially introduced in 2021, has undergone minor amendments for increased clarity but maintains its original policy stance. Key clarifications include that:

• Advertisers must present in-game transaction costs transparently, enabling consumers to grasp how much they are spending.

• Games with in-game purchase features, such as loot boxes, should disclose this information clearly before purchase or download.

• Advertisements featuring content that necessitates additional purchases must explicitly indicate this requirement.

The ASA has ruled on several complaints reinforcing that non-disclosure of the presence of in-game purchases is misleading. As these elements could significantly influence consumer decisions, ensuring clear disclosure in advertising is imperative.

Moreover, CAP acknowledges ongoing discussions by the Department for Digital, Culture, Media, and Sport (DCMS) about loot boxes' impact and potential regulatory responses. The ASA notes that the question of whether loot boxes should be defined as gambling and banned either from sale or advertising is a legal question which falls outside CAP and BCAP’s remit. However, they remain vigilant observers of policy changes to guide evidence-based regulation.

CAP issues guidance on disclosure of host-read ads in podcasts

CAP has issued guidance reiterating the importance of unambiguous advertising disclosures in podcasts, particularly when transitioning from editorial content to advertisements. The guidance does not introduce new requirements but underscores the necessity for "clear, up-front signifying terms" indicating advertisement segments. In particular:

• An up-front signifying term will generally be 'clear' if it's unambiguous (e.g. "this is an ad" or "here is a message from our sponsor"). The aim is to enable consumers to readily identify sponsored content.

• Up-front generally means that the term should be presented before the commencement of the advertisement so listeners or viewers can anticipate the change in content type.

Presenters are encouraged to articulate these signifying terms distinctly and at a pace that ensures comprehension, allowing audiences to recognise the shift from editorial to paid content. While there is no explicit requirement for auditory cues like jingles before/after an ad break, their use may facilitate audience understanding that an advert will follow.

Where paid-for references feature within the main programming (rather than in ad breaks) they should also be made clearly identifiable – for example, by stating that the segment is paid-for, or referring to a sponsor brand at the outset of the content appearing.

ASA issues guidance on advertising alcohol alternative products

The ASA has published guidance on advertising alcohol alternatives. This follows the publication of new CAP rules on alcohol alternative product advertising that were announced at the end of last year.

Alcohol alternatives are non-alcoholic drinks (those at or under 0.5% ABV) that are intended to replace alcoholic drinks in contexts where they would normally be consumed eg non-alcoholic beer.

The Code states that an ad will be subject to the new rules “…if it is likely to be understood by the audience as an ad specifically for an alternative to alcohol, whether in general or as a non-alcoholic version of a particular alcoholic drink…”.

Among other things, the guidance explains how alcohol alternatives can be marketed without inadvertently encouraging inappropriate consumption of alcohol, and that the use of alcohol-related imagery (similar packaging, glassware, or serving styles) without clarifying the alcohol-free nature of the product is likely to be considered to have the effect of promoting alcoholic drinks, even though the product itself is an alcohol alternative.

ASA publishes guidance on dental advertisements

The ASA has published guidance on the advertisement of dental hygiene products.  The guidance aims to remind marketers that they must hold robust supporting evidence before making objective claims in their advertisements – this is particularly relevant when making efficacy claims about a dental product or treatment.

When using before and after images, marketers should also ensure they don’t give a misleading impression about the effects likely to be achievable when using the product. Images should be an accurate representation of the product’s capabilities and be reasonably representative of the effects likely to be achieved by most consumers using the product.

While toothpastes are generally considered to be cosmetic products, if a product or claims about it are medicinal, marketers should ensure that the product has a marketing authorisation from the Medicines & Healthcare products Regulatory Agency and that the claims made comply with that licence.

EU Commission takes preliminary steps against 20 airlines over greenwashing

The EU Commission and the European Network of Consumer Protection Cooperation Authorities have sent letters to 20 airlines identifying several types of potentially misleading green claims, and inviting them to bring their practices into line with EU consumer law within 30 days.

Claims taken issue with include:

• Suggesting carbon emissions caused by flights could be offset by consumers through climate projects or use of sustainable fuels with payment of additional fees.

• Those without supporting verifying information.

The CPC can take enforcement action if the airlines do not comply within the specified period.

EU Council makes recommendations for influencer marketing reform

The EU Council has published recommendations for the EU Commission and EU Member States on how to support influencers in producing lawful and socially responsible content. The Council recommends:

• Engaging with influencers and their representative organisations to ensure they are aware of their role in the media ecosystem and of applicable legislation. 

• The EU Commission should explore adopting coherent policy focusing on media literacy and responsible online behaviour.

• The Commission and Member States should: (a) develop policies and instruments to foster responsible behaviour, (b) support development of self-regulatory bodies or mechanisms and (c) ensure influencers are involved in the development of media policy which may impact them, including regarding the use of AI.

• Focusing on the impact of influencers on minors and the wellbeing of 'kidfluencers'.

CMA issues letter before claim to Emma Sleep about dark patterns

The CMA has escalated its action against the Emma Sleep Group and their directors by issuing a letter before claim. The letter before claim follows extensive dialogue between the CMA and Emma Sleep, whereby the CMA sought a formal commitment from Emma Sleep in the form of undertakings to change their online sales practices, in particular, the use of countdown timers and 'high demand' claims. To date, the Emma Group hasn't agreed to provide undertakings that the CMA considers sufficient to address its concerns.

The CMA has informed the Emma Sleep Group that it is preparing to take court action and will launch proceedings if it does not commit to changing its practices without unnecessary delay.

DMCC Act 2024 receives Royal Assent

As part of 'wash-up', the Digital Markets, Competition and Consumers (DMCC) Bill concluded its passage through Parliament and subsequently received Royal Assent (the latter on 24 May 2024).

The DMCC Act 2024 introduces substantial reforms to consumer law, empowering the CMA with direct enforcement powers, including the ability to levy fines up to 10% of global turnover for breaches of consumer protection law. Key reforms under the Act include:

• The introduction of a new stand-alone pre- and post-contract information and cancellation regime for subscription contracts.

• The migration (and amendment) of the unfair commercial practice rules from the Consumer Protection from Unfair Trading Regulations 2008 into the DMCC Act, including new government powers to amend banned practices through secondary legislation.

• The prohibition of fake consumer reviews as well as misleading publication or inadequate verification of these.

• The introduction of express provisions addressing "drip pricing", requiring specific pricing information to be included within any "invitation to purchase".

Further changes encompass updates in consumer savings schemes and the consumer alternative dispute resolution framework. The DMCC Act 2024 will be subject to secondary legislation by a future government, who will determine its timetable.

For more on the DMCC Act 2024, see here and here.

ASA publishes 2023 update to report on children's exposure to age-restricted ads

The ASA's report shows that children are seeing fewer ads for gambling, alcohol, and HFSS products on TV, in a continuing downward trend, and highlights that children’s exposure to all TV ads is decreasing.

ASA issues guidance on using Royalty in ads

The ASA has issued guidance on referring to Royalty in marketing. While incidental references to the Royal Family or mentions within third-party content such as books or films, may be permissible, advertisements should not imply that a product is endorsed by the Royal Family or is affiliated with royal events, if it is not.

Furthermore, marketers must refrain from using the Royal Arms/Emblems or referring to a Royal Warrant without appropriate permissions. When advertising souvenir products, it is important to avoid misleading consumers by making sure imagery and claims accurately represent the product. Advertisements must not suggest that unofficial merchandise is endorsed by or officially related to the Royal Family.

ASA issues guidance on treating mental health responsibly in ads

The ASA has issued guidance on treating mental health responsibly. It follows the ASA upholding a series of complaints on the topic. The CAP Code mandates that marketing communications must be prepared with a sense of responsibility to consumers and society, which extends to sensitive topics such as mental health. In particular, the ASA has made clear through various rulings that:

• Alcohol advertisements must not suggest that drinking can solve problems or act as therapy.

• Ads should avoid causing fear or distress, especially with imagery or messages related to mental illness unless it's justifiable by the context and message.

• For children's ads, care must be taken not to negatively impact children's self-esteem or imply social media popularity is inherently valuable.

The guidance pays particular attention to advertising products associated with health and beauty, slimming, and therapies where certain conditions should only be mentioned under supervision of qualified health professionals.

ASA issues update on cryptoassets

The ASA has produced a blog setting out the position on advertising cryptoassets and NFTs. The ASA says misleading consumers is the biggest issue but also highlights that NFTs may be classed as investments and subject to relevant FCA rules.

Advertisers must consider what rights are conferred on the owner of an NFT and be clear where IP rights are not transferring as this will be material information. Advertisers should also specify the technical requirements needed to obtain and hold an NFT if the absence of that information is likely to mislead. Costs and fees must also be made clear.

ASA publishes guidance on environmental claims

The ASA has published guidance on publishing environmental claims/ads without misleading by omission.

The guidance mentions recent rulings on ads that highlight positive environmental actions without providing context on the brand's broader environmental footprint, potentially misleading consumers. These primarily focus on companies from sectors with substantial emissions such as oil and gas, as well as financial institutions whose investments in high-polluting industries were not transparently disclosed.

The ASA explains that, where brands communicate their sustainability goals and emission reduction efforts, they must remember that such claims must be contextualised within a company's overall environmental impact. The ASA expects ads to reflect comprehensive views of this impact; failure to do so may result in breaching the CAP Code.

ASA publishes guidance on "Green Disposal" advertising

The ASA has published guidance on green disposal claims (ie items being advertised as recyclable, compostable, or biodegradable). This guidance forms part of the ASA's wider Climate Change and the Environment project, which aims to improve consumer understanding of disposal claims.

In summary, the guidance states that advertisers must:

• Clearly specify which parts of a product are recyclable, compostable, or biodegradable.

• Provide clear instructions on how to dispose of the product if it involves a non-standard process.

• Be honest about the time required for a product to decompose and any potential harmful by-products.

• Robustly substantiate absolute claims like "100% recycled", ensuring they truly represent the entire product.

To help navigate these standards and prevent misinformation, advertisers are encouraged to consult the updated ASA Advertising Guidance document, which now features a dedicated section on environmental claims.

ASA issues guidance on environmental claims in food advertising

The ASA has published updated guidance on environmental claims within food advertising. This includes meat, dairy, and plant-based products. The guidance can be summarised as follows:

• Imagery and Terminology. Care should be taken when using 'green' or 'natural' imagery or terminology as it could imply broader environmental, animal welfare, and health benefits that may not be substantiated.

• Real-World Representation. Where feasible, ads should depict actual environments related to the product. If not possible, avoid overstating farming conditions to prevent misleading consumers.

• Farming Methods. Ads should clarify exact standards when mentioning farming practices or certifications without exaggerating associated benefits. Advertisers should be precise about terms such as 'outdoor bred' versus 'outdoor reared'.

• Regenerative Farming. This is a relatively new term without a universal definition. Therefore, advertisers should clarify what this practice entails for their product without making unverifiable absolute claims.

• Plant-Based Products. General messages about the benefits of a plant-based diet are acceptable; however, more specific environmental benefit claims must consider the full life cycle impact of the products.

• Sustainability Claims. Advertisers should exercise caution with the term 'sustainable', ensuring any absolute claims are highly substantiated due to varying sustainability metrics within food production.

ASA publishes blog on offence and free speech

The ASA has published a blog on issues around freedom of expression and the difference between fact and opinion in advertising (there being more leeway for the latter). The key takeaways are that:

• The ASA will consider complaints about an ad for a cause and idea in the context of the advertiser's right to freedom of expression, but the rules on offence and social responsibility still apply.

• The ASA will take into account the medium in which the ad appears, the audience and its likely response to the ad and the nature of the product or issue at hand.

• Claims for causes on the advertiser's non-paid for space are not in scope as long as they aren't directly requesting donations as part of their own fundraising activities.

• Advertisers are free to promote a cause or idea and give their opinion in ads provided they do not imply these are objective claims and that their expressions of opinion are not likely to cause widespread offence (which can be a complex issue to assess).