Ads & Brands Law Digest: June 2023

In this edition we report on the following topics. The ASA has issued its annual report, CAP has issued guidance on racial and ethnic stereotypes in ads, the ASA has acted against tax repayment agents, the Pilot year for the ASA's Intermediary and Platform Principles has concluded, and the ASA has issued a statement about vaping. In addition, the CMA has provided advice on “green” home heating and has issued updates on its studies into road fuel and groceries. Finally, the ICO has fined companies for unlawful telephone marketing.

In this issue: 

• Advertising and marketing 

• Regulatory 

Advertising and marketing 

ASA issues annual report

The ASA has issued its annual report. It looks back on sixty years of regulation. The report also includes details of some of the most-complained about ads during those sixty years.

The ASA has secured the amendment or withdrawal of 31,227 ads in the past year. The report sets out the key areas of activity from the past year. Against a background of some political turmoil, the ASA has worked on areas such as environmental claims and ‘greenwashing’, online ad-targeting, gambling, telecoms pricing, body image and alcohol alternatives.

For more information, see here, here and here.

CAP publishes new guidance on racial and ethnic stereotypes in ads

CAP has published guidance advising marketers about how to avoid racial and ethnic stereotypes that are likely to cause harm or serious or widespread offence in advertising. It provides further clarity and detail on factors the ASA is likely to consider when assessing complaints, drawing on learnings from its own research.

The ASA has ruled on a string of ads which it ruled broke rules prohibiting them from causing serious or widespread offence on the grounds of race or ethnic background, as well as requiring them to be socially responsible.

In 2020, the ASA undertook further research to establish whether, and if so to what extent, racial and ethnic stereotypes featured in ads may contribute to real-world harms. The new guidance draws on that research.

CAP and BCAP recognise that ads rarely set out to include harmful racial or ethnic stereotypes, or those that are likely to cause serious or widespread offence. The ASA will consider an ad’s likely impact when taken as a whole and in context to decide if it portrays a racial or ethnic stereotype likely to breach the rules.

For more information, see here and here.

ASA takes action against tax repayment agents

The ASA has banned ads from three tax repayment agents for various claims about their businesses that were unclear including failing to clearly state that customers who used the service would be signing over the legal benefit of their repayments to the agents.

All three advertisers misleadingly implied that their free online tools would confirm whether customers were entitled to a refund from HMRC. The ads exaggerated the refund payable to consumers, as well as not making clear that the agents would deduct a fee from the refund, and two of the three advertisers failed to make it clear that, in using these services, customers would be transferring the legal benefit of their claim to the advertiser, which could have an impact on other repayments owed to them for preceding years.

Advertisers in this sector need to make clear that, in consumers appointing an agent to claim a tax refund on their behalf, they are nominating any due repayment to be sent to the agent, and they must not contain any misleading claims about eligibility.

For more information, see here.

Pilot year for the ASA's Intermediary and Platform Principles concludes

The ASA and some of the largest companies in the digital advertising supply chain have now completed a Pilot. It ran for one year from June 2022. Adform, Amazon Ads, Google, Index Exchange, Magnite, Meta, Snap Inc., TikTok, Twitter and Yahoo took part.

Centred around six ‘Intermediary and Platform Principles’, its aim was to explore putting on a more formal footing, and bringing consistency to, the ways in which those companies cooperate with the ASA to promote advertisers’ awareness of the advertising rules online, and to help the ASA to secure compliance in cases where advertisers were unwilling or unable to stick to the rules.

The ASA published an interim report in December 2022, the purpose of which was to provide an independent, anonymised, aggregated account of how the participating companies were performing against the Principles up to that point. A final report will be published in autumn 2023, reflecting on the full twelve months of the Pilot.

The IPP Pilot will help the ASA, industry, and other stakeholders to collectively consider whether and where further action could be taken to enhance the ASA’s ability to enforce the CAP Code online.

For more information, see here.

ASA issues statement on vaping

Societal concern about young people vaping is very topical currently. The ASA has issued a statement highlighting that CAP Code rules reflect the law.

Where vapes can legally be advertised, the CAP Code rules go further: the content of the ads must be responsible, and that includes not being targeted at or likely to appeal particularly to under-18s. That enables advertisers legitimately to advertise their vapes responsibly to adult smokers, provided those ads are not targeted, through content or placement, at under-18s.

The ASA has ruled against influencer ads on TikTok. It has stepped up monitoring of such influencer ads and has three formal investigations ongoing and is also working with regulators and platforms.

The ASA emphasises that its role is to ensure that vaping ads only appear where they can legally be advertised and are responsible. Currently, they are sometimes being placed in social media and targeted at young people.

For more information, see here and here.

Regulatory

CMA issues advice for shoppers after report highlights difficulties buying 'green' home heating

A report published by the Competition and Markets Authority has highlighted that people looking to buy ‘green home’ heating technologies – such as solar panels and heat pumps – can face difficulties and are not always treated fairly by businesses.

The CMA’s report found three key areas of concern:

• Information about products is difficult to find and to understand.
• Not all businesses are acting fairly.
• Quality assurance schemes are not as effective as they can be.
• To help people looking to buy green heating and insulation products, the CMA has published a new consumer guide.

Alongside the consumer guide, the CMA has published a set of good practice principles for quality assurance schemes.

For more information, see here.

CMA takes action to help contain cost of living pressures

The CMA has updated on its work in the road fuel and groceries sectors.

Based on evidence gathered as part of the Road Fuel market study, the higher prices drivers are paying at the pumps appear in part to reflect some weakening of competition in the road fuel retail market. The CMA will now conduct formal interviews with the supermarkets’ senior management and issue a final report by 7 July 2023.

As cost-of-living pressures have grown, the CMA has been working to understand how well markets in essential goods and services are working. While global factors have also been the main driver of grocery price increases, and at this stage the CMA has not seen evidence pointing to specific competition concerns in the grocery sector, it wishes to be sure that weak competition is not adding to the problems.

The CMA will provide an update on this work over the coming months.

For more information, see here.

FCA introduces new rules for marketing cryptoassets

Those marketing cryptoassets to UK consumers will need to introduce a cooling-off period for first time investors from 8 October 2023, under new advertising rules announced by the FCA.

As part of a package of measures designed to ensure those who buy crypto understand the risk, ‘refer a friend’ bonuses will also be banned.

The new rules mean crypto firms must ensure that people have the appropriate knowledge and experience to invest in crypto. Those promoting crypto must also put in place clear risk warnings and ensure adverts are clear, fair and not misleading.

The FCA’s rules follow government legislation to bring crypto promotions into its remit.

For more information, see here and here.

ICO fines two energy firms a combined £250,000 for making unlawful marketing calls

The ICO has fined two energy companies a total of £250,000 for making unlawful marketing calls to people and businesses on the TPS and CTPS.

Maxen Power Supply Ltd and Crown Glazing Ltd both made unsolicited marketing calls to people and businesses while falsely claiming to represent other organisations, such as the National Grid, other energy suppliers or the UK government. Complaints indicated that people were receiving multiple calls on the same day, receiving repeated calls despite requests to opt-out, and were subject to 'aggressive' marketing tactics causing potential financial damage.

The complaints also showed that Maxen Power Supply Ltd was making calls from overseas call centres that purported to be from National Grid or the recipient's existing energy supplier. The company denied responsibility for the complaints raised, claiming these international call centres were "independent contractors" and "third party intermediaries". The ICO gave this short shrift.

For more information, see here.