Ads & Brands Law Digest: August 2023

In this edition we consider the UK Online Advertising Programme, the ASA’s latest report on age-restricted targeting practices, CAP guidance on avoiding misleading imagery in ads, Trading standards guidance on marketing land and properties, a UK government consultation on product safety which will include online marketplaces and labelling, ICO guidance on what is “likely to be accessed by children”, an indefinite extension to using CE marks on products, the CMA’s investigation into unit prices and the CMA and ICO’s joint report on online choice architecture. Finally, we look at developments relating to trade marks and to domain names.

In this edition:

• Advertising and marketing
• Regulatory
• Trade marks and domain names

Advertising and marketing

UK government plans new advertising laws to tackle illegal adverts and protect children

The UK government has published the outcome of its consultation on its Online Advertising Programme. It attempts to address the wide range of harms caused by paid-for online ads in the whole supply chain and will focus on:

• Harms arising from illegal online advertising, such as fraud and scams, the spread of malware, and adverts for illegal products (including weapons) and illegal services. These harms are generally perpetrated by bad/illegitimate actors using advertising to undertake criminal activity.
• The protection of children and young people from adverts for products and services that are illegal to be sold to them, eg alcohol, gambling, vapes and other products/services prohibited to be sold to them. This relates to the targeting and media placement and/or content of ads.

The UK government says that it will consult on the details of proposed regulation, aiming to ensure it is coherent, logical and can be designed and implemented in partnership with industry. It plans to bring forward legislation, as soon as parliamentary time allows, to introduce a new regulatory framework for paid-for online advertising, focusing on the activities and overarching objectives mentioned above.

For more information, see here and here.

ASA reports on age-restricted targeting practices

The ASA has published a report on monitoring age-restricted ads served to children on social media and online.

The ASA contacted advertisers whose adverts reached both accounts registered to under-18s and accounts registered to children who had falsely stated that they were over 18. The ASA sought information on the steps taken by the advertisers to avoid their adverts reaching children, including whether they had followed CAP's guidance on targeting age-restricted ads online.

The report reflects positively on advertisers and agencies’ efforts, which the ASA found to be broadly in line with the CAP guidance, which sets out steps before, during and post ad campaigns to help ensure marketers are doing everything they can to limit children’s exposure to these ads.

For more information, see here.

CAP issues guidance on avoiding misleading imagery in marketing communications

CAP has published an article on how to avoid using misleading imagery in marketing communications. The article states that advertisers should ensure their ads do not mislead about the items customers will actually receive, do not exaggerate the product's efficacy, and where the advertising is for video or mobile games, representative gameplay is used.

For more information, see here.

National Trading Standards revises guidance on terms used in property marketing

Estate agents commonly use terms like ‘new on the market’, ‘new instruction’, ‘under offer’, ‘sale/let agreed’, ‘sold/let subject to contract’ in advertisements, marketing boards and on property portal listings. Delays in updating a property’s listing status or use of incorrect descriptions can lead to frustration for all involved in the buying or renting process – as well as risking agents breaching industry codes and their legal obligations.

Trading standards has now updated its guidance to provide consistency and clarity and aims to reduce unnecessary confusion for property agents, consumers, and other organisations in the property industry.

For more information, see here.

Regulatory

ICO and CMA urge businesses to stop using website designs to obtain personal data

The ICO and CMA have issued a report examining website designs that nudge consumers into giving up personal data. It follows the CMA’s work on online choice architecture.

Practices include overly complicated privacy controls, default settings that give less control over personal information and bundling privacy choices together in ways that push consumers to share more data than they would otherwise wish. The ICO and CMA say that if consumers lack effective control over how their data is collected and used, this can harm consumers and also weaken competition.

These techniques encourage consumers to make decisions over their personal data as soon as they visit a website, from providing their contact information in exchange for discounts, to giving up their control over what advertising is targeted at them through accepting cookies.

Lack of consumer control over cookies is a common example of harmful design. The ICO will be assessing cookie banners of the most frequently used websites in the UK, and taking action where harmful design is affecting consumers.

ICO research shows that 90% of people are concerned about their personal information being used without their permission, with 50% of people not happy about their personal information being used to suggest adverts to them.

For more information, see here and here.

UK government consults on new product safety regime

The UK government is consulting on a new product safety regime, which will include new rules for online marketplaces.

Among the areas the government will be consulting on, include:

• Changes to the regulatory framework
• Exploring the role of standards and testing
• Addressing concerns around the sale of unsafe products online
• Due care requirements in relation to unsafe products
• Introducing voluntary e-labelling
• Role and leadership of the Office for Product Safety and Standards

The Chartered Trading Standards Institute has welcomed the review. The consultation ends on 24 October 2023.

For more information, see here and here.

ICO updates guidance on "likely to be accessed" by children following consultation

Following a consultation, the ICO has updated guidance intended to help organisations determine whether their internet-based services are likely to be accessed by children and within scope of the Age appropriate design code (Children's Code).

The aim of the guidance is to help organisations to assess whether children are accessing a service in reality and how to apply appropriate safeguards to protect them in a proportionate way.

For more information, see here.

UK government announces indefinite extension to use of CE marks

The Department for Business and Trade has announced an indefinite extension to the use of CE marking for UK businesses. Companies will be able to choose whether to use either the UKCA or the CE mark when selling their products in eighteen categories (such as toys, lifts and measuring instruments) in Great Britain.

The CE (Conformité Européenne) mark is used to certify that a wide range of items meet safety standards. Originally, recognition of the CE mark was due to end in December 2024 (after the deadline had been extended several times). The government had introduced the UKCA (UK Conformity Assessed) mark instead.

The government has also updated its guidance about placing products on the market in Great Britain to reflect this decision. In addition, it has updated its guidance to placing products on the market in Northern Ireland to confirm that the CE marking is already recognised in Northern Ireland and so rules for placing goods on the Northern Ireland market have not changed.

For more information, see here and here.

CMA publishes update on cost of living review

The CMA has published an update in its groceries unit pricing review. It is investigating cost of living pressures in the groceries sector. It reviewed 11 supermarkets and seven other retailers (ie stores that sell homeware and household goods with a more limited range of groceries). It found compliance concerns with the Price Marking Order 2004 amongst all those it reviewed. For some retailers these were relatively minor, but the CMA has identified that compliance is worse amongst some variety retailers.

The CMA has set out recommendations on the unit pricing rules and called for reform of the legislation by the UK government. It has also written to those that are not fully complying with the Price Marking Order and expects them to make changes to address its concerns or risk enforcement action.

The CMA is calling on all retailers to give consumers the unit pricing information they need to make meaningful comparisons, particularly for products on promotion, even before any reforms to the Price Marking Order are introduced and refers to the requirements of the Consumer Protection from Unfair Trading Regulations 2008 not to mislead consumers (by action or omission).

The CMA says that it will publish the findings of its consumer research into the use of unit pricing in Autumn 2023. It will be interesting to see if its findings on unit pricing are reflected in the Digital Markets, Competition and Consumers Bill as it passes through parliament.

For more information, see here and here.

Trade marks and domain names

Counterclaims in EU trade mark proceedings

The EU Court of Justice (CJEU) has recently issued two judgments that have clarified how EU trade mark courts should deal with a counterclaim for invalidity of an EU trade mark (EUTM) made by a defendant in response to a claimant’s action for infringement of that same mark.

The EUTM system provides for certain national courts in Member States to hear cases about alleged infringement of EUTMs, known as “EU trade mark courts” (EUTM courts). In these two cases it was the EUTM courts of Munich in Germany and Warsaw in Poland that were considering actions for infringement of EUTMs, and in both cases the defendant had (alongside its defence to infringement) also filed a counter-claim arguing that the claimant’s EUTM in question was invalid. In each case the claimant (TM proprietor) had subsequently decided to withdraw its infringement claim (presumably realising the case against the defendant was too weak) and so the EUTM court was left with just the defendant’s counterclaim to consider. The Munich and Warsaw EUTM courts both sought guidance from the CJEU about the extent to which they were able to go on hearing the counterclaim by the defendant given that the claimant had withdrawn its original infringement claim.

The CJEU’s response has clarified that a counterclaim for invalidity of an EUTM, once launched by a defendant, must be treated by the EUTM courts as a separate legal action with a life of its own. Thus (in the Munich case), it confirmed that the EUTM court could continue to decide the counterclaim even though the original infringement proceedings had been withdrawn. In addition, the CJEU confirmed (in the Warsaw case) that in such circumstances the counterclaim could have a wider reach than the original infringement action. Thus the ongoing counterclaim could seek to invalidate and revoke the EUTM entirely, or to invalidate the mark in respect of a wider range of goods and services, even if the original infringement claims had been in respect of just a narrow sub-set of the goods and services for which the EUTM was registered.

From the defendant’s point of view this provides helpful confirmation that counterclaiming before the EUTM courts can be just as effective as starting proceedings before the EUIPO Cancellation division, in terms of being able to potentially invalidate the EUTM as broadly as possible, or seek revocation in its entirety. For EUTM proprietors it is a salutary lesson that – when launching infringement proceedings – one is potentially laying oneself open to a counterclaim which could put the validity of the mark at risk if it has weaknesses that the defendant can flag up to the court.

For more information, see here and here.

High Court grants interim injunction for transfer of domain name pending trial of IP infringement case

The details of this case are too complex to fully summarise in this Digest, but in very broad terms an Icelandic artist (the defendant) had set up a “.co.uk.” domain which incorporated - within the domain name - the name of the company that he was targeting with a campaign of criticism in relation to alleged corporate misconduct. The domain was used to host a UK website which also used the company’s name, trade mark, corporate colours and styling, its copyright logo and documents, and included a link to a fake “apology” by the company which was supplementary to an art installation that the defendant had created in Reykjavik including a mural which bore a similar apology.

The company brought proceedings in the UK against the artist for trade mark infringement, passing off, copyright infringement and malicious falsehood, but this particular judgment related to its application for an immediate injunction to get the domain name transferred to it pending trial of the main action. It is perhaps more common to see injunctions granted to have a website suspended pending trial, rather than the underlying domain being transferred, but the claimant here was no doubt keen to ensure that a domain that included its corporate name did not remain in the hands of a campaigner.

The judge was happy to rule on the case given that the UK public was being targeted by the website (it was English language and had a “.co.uk” domain), but in order for an interim injunction to be granted in such circumstances (which impacted upon the artist/defendant’s freedom of speech) the judge had to be convinced that the claimant’s substantive case would probably succeed at trial. He did not think that the trade mark case was strong enough to support an injunction as the artist might argue that his use was “not in the course of trade”, but the judge was happy that the claimant’s case in passing off, malicious falsehood and copyright was sufficiently strong. A parody defence in respect of copyright infringement was unlikely to succeed as the defendant’s versions (eg of the logo) were not distinguishable from the claimant’s original works. The judge also found that on the balance of convenience it made sense to order transfer of the domain and suspension of the website pending trial – the greater damage would be done to the claimant if they were left in place.

The case is useful as a reminder that orders relating to domain names – including interim injunctions before a full trial – can play an important practical role for a claimant where IP is being infringed online. In this case, although the defendant was based in Iceland and thus potentially difficult to enforce orders against in person, the court’s order for transfer of the domain pending the trial gave the potential for the claimant to enforce it by way of either Nominet (the registry for “.co.uk” domains) or the website hosting company.

For more information, see here.