Regulatory Outlook: Advertising and Marketing - November 2016

Current Issues

Brexit and advertising regulation: Regardless of whether we get a ‘hard’ or ‘soft’ Brexit, it seems unlikely that advertising regulation will change significantly in the short to mid-term. The Committee of Advertising Practice has said there are unlikely to be any changes in the short term to the Codes enforced by the Advertising Standards Authority (ASA) or to the ASA’s overall regulatory activity. There are certain areas of European law where some advertisers might hope to see a new approach post-Brexit. One is comparative advertising, where the doctrine of ‘riding on the coat-tails’ potentially helps entrench the position of dominant market-players to the detriment of challenger brands. Another is of health and nutrition claims relating to foods, which is currently regulated under an EC Regulation which has caused considerable frustration for many food and drinks advertisers.

ePrivacy Directive: In July 2016, Article 29 Working Party (WP29) and the European Data Protection Supervisor (EDPS) issued their opinions on the evaluation and review of the e-Privacy Directive. Both the WP29 and the EDPS recommend that opt-in consent is required for all types of unsolicited marketing communications, irrespective of the means. Unlawful direct marketing is one of the areas in which regulators, including the UK’s Information Commissioner’s Office, are most active in exercising their enforcement powers.

Advertising HFSS products: A response is awaited from the ASA on how it wishes to proceed in light of the closure of its consultation on 22 July 2016 into the advertising of foods high in fat, sugar or salt (HFSS). New rules could be significant for advertisers in this sector.

Misleading and Comparative Advertising Directive: As part of its Smart Regulation policy, the European Commission is running a Regulatory Fitness and Performance Programme (REFIT), aiming to simplify law, reduce regulatory costs and contribute to a clear, stable and predictable regulatory framework. This process includes a review of the Misleading and Comparative Advertising Directive. The period of consultation ended on 12 September 2016 and the Commission’s report is expected in the second quarter of 2017.

Clearcast not subject to judicial review: The High Court has rejected an application for judicial review by Diomed Direct Limited on a decision given by Clearcast, holding that Clearcast ‘exercises no statutory/public law power; nor does it exercise any public law function. The fact that private arrangements are used to secure public law objectives is insufficient’. This decision confirms to advertisers that judicial review is not an available option to challenge a decision by Clearcast, and that advertisers should ensure their proposed ad complies with the BCAP Code before approaching Clearcast.

Tobacco and Related Products Regulations 2016 (TRPRs): The TRPRs came into force in the UK on 20 May 2016 and contained significant restrictions on ads for nicotine-containing e-cigarettes, except for those licensed as medicines by the Medicines and Healthcare products Regulatory Agency. Broadly, the TRPRs will prohibit ads with a direct or indirect effect promoting e-cigarettes and/or e-liquids.

In Focus: Enforcement

Historically, advertising regulation in the UK has been dominated by the self-regulatory/co-regulatory regime operated by the ASA. However, other regulators also have roles to play and are becoming increasingly more active in some key advertising and marketing areas.

This year, we have seen enforcement action by Trading Standards in its role as back-stop enforcement body for upheld ASA complaints. The advertisers, who had failed to amend claims even after the ASA had ruled them misleading, were eventually subject to criminal prosecution. This development may help the ASA finally shed its reputation as a ‘toothless’ regulator.

The data-driven nature of marketing

The data-driven nature of marketing has also led to an increasingly active role for the Information Commissioner’s Office (ICO) in regulating this area. Throughout the past six months, the ICO has continued to launch investigations against marketers, particularly in the context of nuisance calls and direct marketing without adequate consent. In the last year alone, the ICO has issued over £2.3m worth of fines. On a global scale, the ICO announced in June 2016 that it had signed a memorandum of understanding with 10 enforcement authorities across the world to commit to sharing intelligence about nuisance calls.

Finally, the Competition and Markets Authority (CMA) has focused recently on certain advertising-related issues. One is transparency in advertising whether in the context of so-called ‘native advertising’ of online bloggers and influencers or otherwise. The other – in which the European Commission has also shown considerable interest – is the issue of ‘platform liability’ for online content, including ads. We see no sign of the CMA’s (or the Commission’s) interest in these issues abating as we move into 2017.

Dates for the diary

31 October 2016

The strengthened approach by the ASA to broadband price claims came into force. The new approach follows on from a joint investigation by the ASA and Ofcom which concluded that consumers were likely to be misled about the cost of broadband services. Future ads should therefore show all-inclusive and monthly costs and give greater prominence to contract length, post-discount pricing and up-front costs.

Autumn 2016 

A full report following the e-Privacy Directive consultation is to be published. A summary report was issued on 4 August 2016.

Q2 2017                      

The European Commission’s ‘Fitness Check’ of the Misleading and Comparative Advertising Directive and the Unfair Commercial Practices Directive is expected to be completed during Q2 2017.

2017 

The public consultation concerning the manufacture, presentation and sale of tobacco and related products under the Tobacco Products Directive closed on 4 November 2016. Following the consultation, the European Commission aims to have meetings with stakeholders to discuss.

25 May 2018 

The General Data Protection Regulation will become directly applicable across all EU Member States.

For more information and details of all of the other areas covered by the Regulatory Outlook click here.