Ads & Brands Law Digest: February 2024

Sit down to relax with our Digest and enjoy our discussion of the following topics: the ASA is investigating the supplier pathway of irresponsible ads online, the ASA has reissued the ruling regarding the Calvin Klein ad featuring FKA Twigs, CAP is taking action against e-cigarette ads, the ICO has issued an enforcement order to charity Penny Appeal, Zalando has committed to provide clearer information for consumer following EU action, the Scottish government has proposed new HFSS advertising restrictions, a House of Lords Select Committee has called for evidence of links between HFSS, diet & obesity, a European study has found that influencers in Europe routinely flout disclosure rules, the European parliament has adopted new transparency rules for political advertising, the Court of Justice of the EU has ruled in IAB Europe “cookie consent” case and the UK Court of Appeal has emphasised the importance of “real life” and “post-sale” assessment of likelihood of confusion between marks when considering infringement.

Advertising and marketing

ASA investigates supplier pathway of irresponsible ads online

The ASA has launched two new projects which are aimed at better understanding where responsibility lies for inappropriately targeted and irresponsible ads that appear online. The projects involve looking in depth at the supplier pathway of online ads that are found to have breached the CAP Code.

One project is using technology to monitor for ads for age-restricted products, including alcohol, gambling and foods high in fat, salt or sugar (HFSS), on sites of particular interest to under-18s.

Another project will use the same approach to monitor for seriously offensive and potentially harmful ads, which the ASA knows to have appeared in mobile quiz and game apps. It has previously investigated several in-app ads, which condone or encourage sexual violence to women and girls.

Using monitoring findings, the ASA will undertake a few in-depth case studies seeking to identify the parties involved in the supplier pathway of these non-compliant ads, assessing the part played by the advertiser, the publisher and the intermediary companies that sit between them. It will seek their input to better understand how the ads came to appear, publishing its findings and assessments to help deliver its strategic commitments. The ASA will report the outcome of the projects later this year.

For more information, see here.

ASA reissues ruling regarding Calvin Klein ad featuring FKA Twigs

The ASA has reissued its ruling regarding a Calvin Klein ad featuring FKA Twigs. Initially, it deemed the ad objectifying. Following criticism of the ad, the ASA has reversed part of its original decision. It has now decided that the ad was not after all socially irresponsible and likely to cause widespread offence. However, it maintained a ban on untargeted public display due to the ad being overtly sexual.

It is a good thing that the ASA has decided to look at this decision again, particularly on its own initiative, and that is to be applauded. But the outcome remains that the image of the FKA Twigs is still banned from being used in posters because it is overly sexual. The revised adjudication places great weight on the fact that in the FKA Twigs photo you can see the side of one breast and the side of her bottom, and while this does not amount to objectification, it does make the image overly sexual.

For more information, see here and here.

CAP takes action against e-cigarette ads

CAP has issued an Enforcement Notice to advertisers about vaping and has launched focused monitoring to find and ban problem ads.

CAP points put that e-cigarettes prohibited by law, and by extension the CAP and BCAP Codes, from being advertised in various media and cannot be targeted at children. CAP has been monitoring and tackling problem vaping ads appearing in social media.

Last year, it issued an Enforcement Notice to e-cigarette manufacturers and retailers requiring them to stop paid promotions on TikTok. It is now expanding its efforts across other social media platforms and to their social media accounts.

Advertisers may not directly or indirectly market nicotine-containing e-cigarettes that aren’t licensed as medicines on most social media. So, they may not be promoted in paid-for posts, or in non-paid for posts on non-private account. In the few spaces where ads for vapes are allowed, such as on company websites, they must not be targeted or appeal particularly to under-18s, and can only contain factual claims about products.

The Enforcement Notice is being sent to e-cigarette manufacturers and retailers. It makes clear the rules that are in place and emphasises that ignorance is not an excuse. CAP and the ASA will not hesitate to apply sanctions against advertisers who are either unwilling or unable to comply.

Following the notice, advertisers have until 28 March to ensure their ads are compliant.

For more information, see here.

Regulatory

ICO issues enforcement order to charity Penny Appeal

The ICO has sent an enforcement notice to charity Penny Appeal ordering them to stop sending unwanted marketing texts without consent. Penny Appeal sent more than 460,000 texts over a ten-day period to 52,000 people who had never given their consent, or who had clearly opted out. The texts were sent between April and May 2022 during Ramadan, encouraging people to donate to the charity. The messages led to 354 complaints. The ICO says that although it understands that reaching donors is a crucial part of fundraising, charities have a responsibility to ensure their marketing follows the law. These complaints serve as an example of how unlawful messages can have a negative impact on public trust and cause upset to existing donors.

For more information, see here.

Zalando commits to provide clearer information for consumer following EU action

Following EU action, the retail platform Zalando has committed to removing misleading sustainability flags and icons displayed next to products offered on its platform. Such claims can mislead consumers about the environmental characteristics of the products. As from 15 April 2024, Zalando has committed to:

• removing the initially used sustainability flag from all webpages.
• removing all misleading environmental icons that were displayed next to products (such as a leaf or a tree).
• no longer using the term “sustainability”, or other unjustified terms indicating an environmental and/or ethical benefit. Zalando will provide clear information about the specific product, for example, a percentage figure of how much recycled material is used.
• removing the icons and the term ‘sustainability' also from the filter and allowing consumers to filter and select products based on specific product qualities.
• providing clear and specific information on the product's environmental and/or ethical benefit at the product detail page.
• revising the “Sustainability Page” by introducing two new webpages: one with more information on the product standards and one with information about Zalando's sustainability-related approaches and strategies.
• ensuring that Zalando's environmental claims are based on aspects which are significant for the environment.

For more information, see here and here.

Scottish government proposes new HFSS restrictions

Following consultation, the Scottish government is now seeking views about the detail of proposed regulations to restrict the promotions of foods high in fat, sugar or salt where they are sold to the public. The regulations will be made under the Food Safety Act 1990 and the Food (Scotland) Act 2015.

They will restrict the promotion of HFSS foods where they are sold to the public, including across retail and out of home settings. They will target:

• foods such as confectionery, cakes, crisps, savoury snacks and soft drinks with added sugar; and
• promotion types including among other things, multi-buys, temporary price reductions, meal deals and positioning restrictions, such as at checkouts and front of store.

In most respects the regulations will be consistent with the regulations in England, except that the Scottish rules will include meal deals and temporary price reductions, as well as free standing displays.

The consultation ends on 21 May 2024.

For more information, see here and here.

House of Lords select committee calls for evidence of links between HFSS, diet & obesity

While there is still some time before the restrictions on HFSS promotions and online and TV advertising come into effect in October 2025 (assuming they are not delayed again), a House of Lords Select Committee has recently taken steps to progress its inquiry into the role of foods – namely ultra-processed foods (UPF) and foods high in fat, sugar and salt (HFSS) – and their impact on a healthy diet and obesity.

It has requested views about:

• Trends of food, diet and obesity (including the evidential basis of any such trends) and identifying primary drivers of obesity.
• The impact of obesity on health, with specific focus on child/ adolescent health and the influence of pre- and post-natal nutrition on the risk of obesity.
• The definition of UPF and HFSS foods, and the usefulness of these terms.
• How advertising, packaging, labelling, cost and availability influence a consumer’s ability to recognise UPF and HFSS foods, and how this affects health.
• The role of the food and drink industry in driving food and diet trends and influencing the policymaking process.
• Learnings from the rest of the UK and international policy on obesity.
• The effectiveness of UK government policymaking processes and future policy tools that could help prevent obesity.

Views are requested by 8 April 2024.

For more information, see here and here.

Study finds that influencers in Europe routinely flout disclosure rules

The European Commission and various national consumer protection authorities have been carrying out a sweep of posts by 572 influencers. They found that 97% of those influencers posted commercial content but only 20% systematically indicated that their content was advertising.

In addition, the sweep found that:

• 38% did not use platform labels that disclose commercial content, such as the “paid partnership” toggle on Instagram. Many used inadequate wording such as “collaboration” (16%), “partnership” (15%) or generic “thanks to the partner brand” type wording (11%).
• Only 34% of influencers' profiles made the disclosure immediately visible without needing additional steps, such as by clicking on “read more” or by scrolling down.
• Out of the 40% of influencers who endorsed their own products, services or brands, 60% of those did not consistently, or at all, disclose advertising.

The European Commission says that national authorities will take action with regard to 358 influencers.

In addition, the European Commission will consider if action is required under the Digital Services Act, which came fully into force on 17 February 2024, and which, among other things, requires platforms to empower users with information about advertisements they see, such as why the ads are being shown to them and who paid for the advertisement.

The results of the European Commission's sweep will also feed into the fairness fitness check of EU consumer law, which the Commission launched in 2022.

For more information, see here and here.

European parliament adopts new transparency rules for political advertising

The European Parliament has adopted new rules on transparency and targeting of political advertising, which will make election and referenda campaigns more transparent and resistant to interference. The new rules will regulate political advertisements, notably online ads, while also providing for a framework for political actors to advertise more easily across the EU. Following the adoption in plenary, the Council needs to formally adopt the text. The rules will apply 18 months after the entry into force, while the definitions and measures on the non-discriminatory provision of cross-border political advertising (including for European political parties and political groups) will apply 20 days after the publication in the EU Official Journal.

CJEU rules in IAB Europe case

Online advertisers can bid to acquire advertising space to display advertisements which are tailored to the user’s profile (Real Time Bidding).

However, before such targeted advertisements can be displayed, it is necessary to obtain the user’s prior consent to the collection and processing of their personal information for eg advertising.

IAB Europe is a Belgian non-profit association which has drawn up a solution which it says conforms with the GDPR.

Users’ preferences are encoded and stored in a string composed of a combination of letters and characters referred to as the ‘Transparency and Consent String’ (TC String), which is shared with personal data brokers and advertising platforms so that they know to what the user has consented or objected. A cookie is also placed on the user’s device. When they are combined, the TC String and the cookie can be linked to that user’s IP address.

In 2022, the Belgian Data Protection Authority held that the TC String constitutes personal data under the GDPR and that IAB Europe had been acting as data controller without fully complying with the GDPR. It imposed various corrective measures as well as an administrative fine. IAB Europe appealed that decision and the Brussels court referred the case to the CJEU.  

The CJEU has now confirmed that the TC String contains information concerning an identifiable user and so is personal data under the GDPR. Where the information contained in a TC String is associated with an identifier (eg IP address), that information may make it possible to create a profile of that user and to identify him or her.

It also said that IAB Europe must be regarded as a ‘joint controller’ under the GDPR when the consent preferences of users are recorded in a TC String, and to determine, jointly with its members, both the purposes of those operations and the means behind them. However, it also said that IAB Europe is not a controller with respect to the data processing operations occurring after the consent preferences of users are recorded in a TC String, unless it can be established that IAB Europe has exerted an influence over the determination of the purposes and means of those subsequent operations.

For more information, see here.

Trade marks

Court of Appeal emphasises importance of “real life” and “post-sale” assessment of likelihood of confusion between marks when considering infringement

The Court of Appeal has recently considered an appeal in proceedings brought by Umbro (which uses a well-known elongated double-diamond trade mark on its sports clothing) against Dream Pairs (which is a competitor of Umbro in the market for sports and leisure shoes, and uses a logo which is more of a double-square in appearance): the two marks are reproduced in the judgment which can be found at the link below.  Umbro had launched High Court proceedings arguing that Dream Pairs’ double-square logo infringed its own double-diamond mark, but the first instance judge found against Umbro on the grounds that the two marks were not sufficiently similar for there to be any confusion in the minds of consumers.

On appeal, Lord Justice Arnold overturned the High Court ruling and found that Dream Pairs had infringed the Umbro mark.  His judgment provides a useful reminder of two important principles to bear in mind when assessing potential trade mark infringement under section 10(2) of the Trade Marks Act, which requires at least similarity of the two marks and products, and also demonstration of a “likelihood of confusion” on the part of relevant consumers.

First, when considering the similarity – or otherwise – of two marks, it is important to take into account not only what the marks look like on the register, and square-on to the viewer, but also what they would look like in the real world, affixed to the relevant products and potentially viewed from different angles.  Considering what the square Dream Pairs logo would look like once affixed to sports shoes and viewed from above, Lord Justice Arnold found that the High Court judge had been wrong to find that any similarity was “very faint indeed”.

Secondly, it was important to consider the potential for post-sale confusion.  (It is an established principle in both EU and UK case-law that likelihood of confusion for the purposes of section 10(2) infringement can be based upon confusion that occurs post-sale.  For example, damage can be done to the trade mark proprietor if consumers see other people using competing products bearing the similar mark and therefore wrongly assume that it is the trade mark proprietor’s product.) 

While most sales of Dream Pairs sports shoes were made through the Amazon website, it was therefore also necessary to take into account consumers who later encountered the square Dream Pairs logo “in real life” on sports shoes being worn by others.  “The average consumer in the post-sale context would frequently see the [Dream Pairs logo] at an angle…looking down from head height at the feet of another person wearing the footwear.”  In such circumstances, Lord Justice Arnold held, the square would appear more like a double-diamond and there was a likelihood of confusion on the part of a significant proportion of consumers.

For more information, see here.