Advertising and Marketing | UK Regulatory Outlook January 2023

Greenwashing and environmental claims

This year we expect the existing current market investigation into sustainability claims in fast fashion to conclude. and The Competition and Markets Authority (CMA) has announced a new market investigation into greenwashing claims, looking specifically at the consumer goods sector - see our Insight.

Continued high levels of enforcement action in relation to environmental claims from the UK Advertising Standards Authority (ASA) is also anticipated. 

In October 2022, the ASA published findings of its research into consumer understanding of environmental claims, in particular "carbon neutral", "net zero" and "electric" and "hybrid" vehicles, therefore we expect enforcement to focus on these areas. Please see our previous Regulatory Outlook for details. The ASA has also indicated that it may focus on sustainability claims made in relation to meat and dairy alternatives.

Online advertising programme

The government's response to the final report on the Online Advertising Programme consultation, prepared by the Department for Digital, Culture, Media and Sport, is expected in 2023. The report reviews the regulatory framework of paid-for online advertising and harms relating to it. Various suggestions, including giving the ASA further enforcement powers and/or the creation of a statutory advertising regulator with civil enforcement powers were considered. 

Focus on body image issues

This year one of the ASA's work priorities is going to be around the issues of body image in advertising.

Previously, in November 2022, the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) published an interim statement following their call for evidence which addressed the issues of body image in advertising. Please see details in our previous Regulatory Outlook. The ASA stated that the evidence received did not identify significant gaps in the current regulatory framework, but that further evidence is required.

Therefore, in 2023, the ASA is committed to prioritise the research work in the areas where the potential harms may arise from:

• digitally altered images in advertising and labelling as a possible intervention (this work should be completed by the end of Q1 2023);
• the depiction of muscularity in advertising (this work should be completed by the end of Q4 2023); and
• the depiction of women from minority ethnic backgrounds in ads and the possibility of developing new and unattainable body image ideals (this work should be completed by the end of Q4 2023).

Following the exploratory work, it is likely that measures to clearly label any digital altering of images in advertising could be put in place.

Direct marketing: UK Data Protection and Digital Information Bill and ICO Direct Marketing Code

The UK Data Protection and Digital Information Bill is likely to affect the digital advertising sector. It was introduced to Parliament on 18 July 2022, but the second reading, originally scheduled for 5 September 2022, has been delayed. The likely advertising impacts of the bill are as follows:

• Direct marketing (expansion of "soft opt-in" for non-commercial organisations, such as charities or political organisations); potential for future carve out from direct marketing rules for political campaigning).
• Purpose limitation where relying on consent.
• Fines for breaches in relation to direct marketing/unsolicited calls under the Privacy and Electronic Communications Regulations (PECR) enforcement will increase from £500,000 to GDPR level.

In the meantime, the UK Information Commissioner's Office (ICO) has provided updated sets of guidance on direct marketing to help companies comply with PECR: guidance on direct marketing using electronic mail and guidance on direct marketing using live calls. Please see our previous Regulatory Outlook for more details.

The ICO's plans on adoption of an updated Direct Marketing Code are postponed until the Data Protection and Digital Information Bill is finalised, therefore we will probably not see a formal ICO Code this year. However, it is not likely to look very different to the guidance being published on the ICO's website. Please also see the Data protection section.

Digitalisation of advertising

This year we expect an increase in regulator guidance relating to the use of artificial intelligence (AI) and non-fungible tokens (NFTs), new approaches to ad tech and new media channels (such as the metaverse), and developments around augmented reality, virtual reality and deepfake technology.

In 2023 we expect this guidance to focus on issues including considering if ads are obviously identifiable, more focus on avatars, and targeting concerns given young audiences. We expect new regulator guidance and legal action regarding greater advertising transparency where new technology is used (especially for deepfakes and advertising in the metaverse).

Digitalisation of the ASA

The ASA has already addressed the impact of AI on advertising regulation. Its head of data science, Adam Davison, highlights that the ever-increasing scope of digital advertising means monitoring enormous amount of content online every day – and AI and machine learning might be of great help in this. The ASA is expanding the collaboration between its data science and compliance experts to make the process of monitoring ads easier and less time-consuming. In particular, AI systems will be set up to search for potentially misleading text or identification of ads that are visually similar to problematic ads seen before. This approach has already been used in relation to influencer marketing, environmental claims and cryptocurrency ads.

All of which is likely to mean that we can expect to see the ASA's monitoring of compliance after a complaint has been resolved to become more efficient in 2023 and beyond.

EU might regulate influencer marketing

As described in more detail in the Consumer law section, the EU Commission is currently consulting on its latest fitness check of EU consumer law. As part of this consumer refit consultation, the European Commission is (among other things) seeking views on possibly defining the concept of and regulating "influencers".

There are no more details around this initiative, but the fact that this issue has been raised as part of the consumer refit in the EU, shows that this is on the European Commission's radar.

Online safety and advertising

The UK Online Safety Bill intends to introduce new rules to protect users online. From an advertising perspective, the bill will require the biggest social media platforms and search engines to have measures in place to prevent paid-for fraudulent ads appearing on their services. Please see the Health and Safety section for more details on this legislative proposal.

Advertising of HFSS products

Please see Food law.