Introduction To Advertising Law

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Introduction to Advertising Law

Transcript

Welcome to the Gowling WLG ad law team podcast.

I'm Jason Stephens and, in this first podcast, I'll be taking you through the basics of advertising regulation in the UK.

Advertising is ever present in our lives. Unless you're living out in the wilderness with no access to technology, it is near impossible to spend a day without seeing an advert. Without advertising, the media as we know it could not exist - newspapers, magazines, commercial broadcasting and vast swathes of the internet all depend on the revenues raised through the sale of advertising space.

While advertising exists to raise awareness of brands and, ultimately, to induce us to spend money on products or services, it can also help to inform, assist in making choices and inspire with great creativity. In the UK, it's one of our most important creative industries, responsible for billions of pounds of revenue and some of the world's most memorable and innovative campaigns.

But barely a week goes by without advertising also making the news for the wrong reasons. It's blamed for many of society's ills, from the targeting of vulnerable people by irresponsible lenders, to childhood obesity. There are frequent calls for stricter controls or bans on gambling or alcohol advertising. The desire to present a product in the best possible light can lead to boundaries being pushed too far, resulting in claims which may mislead. And a multitude of other issues can arise, from questionable health claims to price offers which are not as attractive as they first seem.

So how is advertising regulated in the UK?

Advertising regulation in the UK takes various different forms, including an established and well-respected self-regulatory system of advertising standards, which exists alongside laws including the Consumer Protection from Unfair Trading Regulations and the Business Protection from Misleading Marketing Regulations. Various regulators play a role including the Advertising Standards Authority - the ASA - which administers the self-regulatory system, local authority Trading Standards offices, and the Competition and Markets Authority - the CMA. While advertisers may have reasonably regular dealings with the ASA and Trading Standards, the CMA concentrates on issues which have the potential to distort markets as a whole - for example, it has taken recent action on the disclosure of paid-for endorsements (to enable consumers to identify advertising and distinguish it from editorial content) and on misleading price offers.

A multitude of other laws and issues can impact advertising in the UK, including intellectual property laws - perhaps where advertising infringes copyright, 'passes off' an authorised connection with a celebrity or event or makes use of a trade mark in connection with a comparative ad that doesn't comply with the rules. Data protection and privacy laws govern the collection and use of personal data for direct marketing and have the potential to impact analytics, retargeting and other kinds of online behavioural advertising. The advent of the General Data Protection Regulation in May 2018 (which is beyond the scope of this podcast) has major implications for advertisers and agencies and all businesses which have not already done so should be looking at auditing their compliance. You don't want to be on the receiving end of a fine of 4% of global turnover...

Defamation and malicious falsehood can be an issue in advertising and more so now, in the era of the ill thought out social media post. And there are any number of sector or product-specific requirements from those governing health and nutrition claims made on foods, through to cosmetics regulation and laws on gambling, which can impact on prize promotions and contests.

So there are a lot of issues to consider and enforcement and sanctions also vary. The ASA is typically reliant on the bad publicity which flows from its published rulings, while Trading Standards and the CMA have a much wider range of sanctions available, from seeking undertakings from a business, through to criminal prosecution of both companies and individuals to whose neglect an offence is attributable. In practice, Trading Standards prosecutions come up less regularly than they used to - local authority cuts in the UK have left Trading Standards departments with significant resource constraints - but the risk of prosecution still tends to help focus advertisers' minds. Reputational impact and brand damage can also be severe - stories about supermarkets misleading on price or car brands misleading on emissions are likely to be picked up by the press.

In terms of who can bring an action before the courts, there are some private rights of action in the UK for consumers misled in breach of the Consumer Protection from Unfair Trading Regulations. However, the UK does not have the history of enormously expensive class action lawsuits which are a feature of advertising law in the United States. It can also be difficult (compared to jurisdictions such as Germany and the United States) for companies to bring a claim before the UK courts in relation to their competitors'...