Ads & Brands Law Digest: November 2023

• Advertising and marketing 
• Regulatory
• Trade mark

In this month's Digest, we will discuss the following topics. The ASA has issued its new five year strategy, the IPA and ISBA have launched industry principles for using generative AI in advertising, there is a new CAP Code rule on advertising alcohol alternatives, new CAP guidance on mid-contract price increases in telecoms comes into force in mid-December, CAP has issued an update on its work on digitally altered images and the ASA has issued an update issued on green disposal claims in advertising. Ofcom has issued the first in a series of consultations on Online Safety Act 2023 concerning illegal content, the FCA has secured changes to BNPL terms under Consumer Rights Act, the Tobacco and Vapes Bill was announced in the King’s Speech and a UK adult site has introduced age verification measures following engagement with Ofcom. Finally, we discuss a Court of Appeal case which warns big brands that they must be able to prove genuine use of their trade marks.

Advertising and marketing

ASA issues new five-year strategy

The ASA has issued its new five-year strategy, which it says has ambitious targets to make sure all ads are responsible and people are protected from being misled, harmed or offended by them.

Highlights of the strategy include:

• People: It will represent everyone, while prioritising the protection of the most vulnerable, and it will recruit and retain the best people from both diverse backgrounds and a wider geographical area.
• Planet: It will run its climate change and the environment project throughout the strategy period and it will continue to implement its own Net Zero plan.
• Online: It will scale-up its AI-based Active Ad Monitoring system to swiftly act against irresponsible online ads and report on compliant ads. It will champion how it thinks the regulatory framework for online ads should develop, bringing greater transparency and broader accountability to platforms and intermediaries; and will work with other statutory regulators and play its part in tackling fraudulent online ads.
• Awareness and buy-in: It aims to increase public, opinion-former and industry awareness of, and trust in, ad regulation across all media.
• Collective ad regulation: It will work with governments and statutory regulators to ensure ad regulation is effective; as well as continuing engagement across national borders.
• Operational transformation: The ASA will prioritise proactive projects on ad-related issues that cause the most detriment to people, it aims to resolve investigations more quickly, it aims to prevent irresponsible ads appearing in the first place and will deliver ongoing, agile and visible enforcement.

For more information, see here and here.

IPA and ISBA launch industry principles for use of generative AI in advertising

When the UK hosted the global AI Safety summit, there was a flurry of announcements from all directions about AI. The IPA and ISBA announced twelve guiding principles for agencies and advertisers on the use of generative AI in advertising.

They say that the principles are broad-brush and designed to ensure that the industry embraces AI in an ethical way that protects both consumers and those working in the creative sector. They cover issues around transparency, intellectual property rights, human oversight and more.

The principles are not exhaustive and apply only to the creative process rather than other areas of the industry. They apply to the use of generative AI in content creation. There are many other instances where AI may be used and where abuses should be guarded against. This might include the large-scale creation of poor-quality clickbait on Made for Advertising sites, or AI algorithms deciding to whom online ads are served. There may also be other legal issues to consider, such as the onward use or accessibility of sensitive consumer data fed into an AI system.

For more information, see here and here.

New CAP Code rule on alcohol alternatives

Following consultation, CAP has announced new rules on alcohol alternative product advertising which will come into force on 14 May 2024. These rules are accompanied by detailed guidance to help advertisers understand where the ASA Council is likely to draw the line in judging whether the advertising rules have been broken.

When the alcohol rules in the CAP and BCAP Codes were developed, the zero-alcohol sector was small, with little advertising. However, in recent years advertising activity for these products has expanded. Although such products are considered non-alcoholic, their advertising often uses imagery redolent of alcohol and mentions drinking occasions. As such, CAP and BCAP have considered how these products should be advertised responsibly and how they intersect with alcoholic products covered by the Codes, meaning new rules and guidance would be helpful to advertisers and provide appropriate protections to consumers.

The new rules will appear in Section 18 of the CAP Code, and Section 19 of the BCAP Code and relate to the promotion of beverages with an ABV at or below 0.5% which are marketed as alternatives to alcoholic drinks. They cover definitions, presentation of ABV statements, responsibility, and targeting and scheduling restrictions. As many of the rules depend on the content of an ad and the context in which it appears, they are accompanied by formal guidance that explains how the rules should be interpreted and applied, including examples of approaches that would not be acceptable.

For more information, see here and here.

New guidance on mid-contract price increases in telecoms comes into force in mid-December

CAP’s new guidance on the advertising of telecoms contracts with mid-contract price increases comes into force on 15 December 2023, following a six-month grace period. It sets stricter standards on the prominence advertisers must give to important information about future price rises. The key points are:

• Don’t give the impression that prices are fixed if they are not;
• Don’t rely on contradictory qualifications;
• Do make sure information about the price increase is up front and prominent;
• Do make sure that references to inflation are clear and simple to understand;
• Do make sure that you include the full future price the consumer will pay, once it is known, in pounds and pence; and
• Do make clear if terminating a variable contract will have knock-on effects for other linked services.

For more information, see here and here.

Update on body image in advertising - digitally altered images

In 2022, CAP and BCAP published an interim statement, as part of their ongoing review on body image in advertising following an open call for evidence in 2021. One of the policy areas for which CAP and BCAP committed to undertake further enquiry work, as set out in the interim statement, is the use of digitally altered images in advertising.

CAP and BCAP will be taking, and have taken, the following steps in this strand of the review. The update statement sets out CAP and BCAP’s considerations in detail:

• To resolve by Spring 2024, whether the existing protections in the Codes and guidance adequately address the potential harms arising from digitally altered body parts and proportions depicted in advertising. CAP and BCAP will continue to take an evidence-based policy making approach in their assessment;
• To convene a roundtable involving children and young people to help inform CAP and BCAP’s assessment above. To that end, CAP and BCAP hosted a youth roundtable in October 2023, and will report their findings from this in Spring 2024; and
• To engage with members of the advertising industry to facilitate any wider considerations of industry initiatives intended to address potential harms arising from digitally altered body parts and proportions depicted in advertising. 

CAP and BCAP intend to publish the full outcome of their body image in advertising review in Spring 2024.

For more information, see here.

Update issued on green disposal claims in advertising

In 2021 the ASA’s Climate Change and the Environment project announced that it would be starting proactive enquiries into sectors and issues identified by the UKs Climate Change Committee as priority areas for carbon reduction and consumer behaviour change.

One of the areas identified was issues relating to green disposal of products, such as claims for recyclability, biodegradability or composability. The ASA has now issued its findings.

CAP and BCAP have issued accompanying guidance which will take effect from 1 April 2024. The ASA will proactively investigate potentially problematic claims with a particular focus being given to:

• Claims that omit end of use green disposal information where such information is material to the effective and responsible disposal of the item.
• Claims that suggest a product has multiple green disposal options where that is misleading.
• Claims where substantiation to back up green disposal claims is not present.

For more information, see here.

Regulatory

Ofcom issues first in series of consultations on Online Safety Act 2023

Ofcom has issued the first in a series of consultations regarding the regulation of the Online Safety Act 2023.

It focuses on its proposals for how internet services that enable the sharing of user-generated content ('user-to-user services') and search services should approach their new duties relating to illegal content.

It covers:

• the causes and impacts of illegal harms;
• how services should assess and mitigate the risks of illegal harms;
• how services can identify illegal content; and
• its approach to enforcement. 

The consultation accompanies first drafts of Ofcom’s risk assessment, codes of practice and associated guidance, that together underpin the illegal harms part of the regulatory regime.

For more information, see here and here.

FCA secures changes to BNPL terms under Consumer Rights Act

The Financial Conduct Authority has published new research which shows there has been a significant increase in the use of Buy-Now-Pay-Later products. It has now secured changes to potentially unfair and unclear contract terms for unregulated BNPL firms.

The FCA has certain consumer protection powers outside of the Financial Services and Markets Act 2000 regime which can apply to both authorised and unauthorised firms where poor practice is found. In this case, it has used its powers under the Consumer Rights Act 2015 to secure changes to potentially unfair and unclear contract terms in this sector.

The FCA was concerned that the customers of two companies were at risk of harm because of how some of the contract terms were drafted. As a result of the FCA’s continued focus in this area, both firms have voluntarily made their continuous payment authority terms easier to understand - and one company has made terms relating to what happens when a consumer cancels the purchase funded by the loan clearer and fairer.

For more information, see here and here.

Tobacco and Vapes Bill announced in King’s Speech

The UK government has announced that it will bring forward a Tobacco and Vapes Bill which will:

• Provide that children born on or after 1 January 2009 will never be able to be legally sold cigarettes. This will mean effectively raising the age of sale by one year each year for this generation.
• Reduce youth vaping by restricting the flavours and descriptions of vapes so they are no longer targeted at children; regulating point of sale displays so that vapes are kept out of sight of children; regulating vape packaging and product presentation, ensuring that neither are targeted to children and closing loopholes in the law which allow children to get free samples and buy non-nicotine vapes.
• Strengthen enforcement activity with new powers to fine, on the spot, retailers who sell tobacco products or vapes to people who are under age. It will also enhance online age verification. 

The government is also considering measures to restrict the sale and supply of disposable vapes (including considering prohibiting their sale) and action on the affordability of vapes, including exploring a new tax duty on vapes.

For more information, see here and here.

UK adult site introduces age verification measures following engagement with Ofcom

Tapnet Ltd – which provides the online adult video service RevealMe – has introduced age verification measures, after Ofcom raised concerns that it was not doing enough to prevent children from being able to access pornography on its platform.

Under video sharing regulations which pre-date the UK’s new online safety laws, video-sharing platforms established in the UK are required to take measures to prevent under-18s from accessing pornographic material.

Tapent now requires users – upon entering the site and before accessing any videos – to verify their age, by submitting valid identification to a third-party automated age verification tool or making a credit card payment; or sign into a registered account where their age has already been verified.

For more information, see here.

Trade Marks

Court of Appeal issues warning to big brands that the onus is on them to be able to prove genuine use of their trade marks.

The easyGroup of companies is well known for its active enforcement of its broad portfolio of “easy-“ prefixed trade marks, including easyJet and easyCar (which are licensed to their current operators). A recent high-profile example was the proceedings that it launched against the indie pop band Easy Life, which has reportedly led to the band having to change its name. But easyGroup does not always get its own way, and in this case the Court of Appeal has revoked its various easyOffice marks on the grounds of non-use. In doing so it has reconfirmed that the onus is upon brand-owners to be able to prove that they have been making genuine use of their marks, and as the judge (Arnold LJ) put it, this “must be demonstrated by solid and objective evidence.” (In litigation, a brand-owner’s marks can be subject to revocation if it can be shown that the marks have not been used for a continuous period of five years or more without proper reason for such non-use.)

The context of the case was a long-running dispute between easyGroup on the one side – which registered a number of variants of its easyOffice marks in 2002 and 2013 (in the UK and EU) – and a business launched in 1999 that used the brand EasyOffices (or easyoffices) in the plural for brokerage of temporary/serviced office space. The dispute had culminated in proceedings launched by easyGroup in 2019 in which it claimed infringement of its easyOffice marks by the EasyOffices business. The latter denied infringement and counter-claimed for revocation of the easyOffice marks on the grounds of non-use. In the High Court the judge had found no infringement, and that the marks should indeed be revoked; so these proceedings in the Court of Appeal were easyGroup’s attempt to overturn the judge’s findings and save its marks from revocation.

The Court of Appeal confirmed the judge’s finding that there had been no infringement (although on slightly different grounds). The services of the two parties were identical, but the plural nature of the EasyOffices sign rendered it noticeably different from the easyOffice marks, while there was no evidence of confusion (and there had been a long period of honest concurrent use of the two marks).

Reviewing the judge’s decision that easyGroup had not proved that they had made genuine use of their easyOffice trade marks, Lord Justice Arnold noted that there is no “de minimis rule” (i.e. in some circumstances even relatively slight use of a mark can be sufficient to be found “genuine use”). But, he went on, the use must be more than token and the burden of proof is upon the trade mark owner to demonstrate the use with solid and objective evidence. The evidence produced by easyGroup had not been sufficiently substantial or persuasive, and thus the Court of Appeal confirmed that the easyOffice marks should be revoked. In Arnold LJ’s words, the judge had been entitled “to take into account the fact that easyGroup is an experienced operator which should be well able to prove genuine use of its trade marks, and she was right to do so.” A useful reminder, therefore, that brand-owners should put systems in place to capture and store such evidence of use of their trade mark, on an ongoing basis.

Read more here.