Ads & Brands Law Digest: October 2023

In this month’s Digest we discuss the Online Safety Act finally receiving Royal Assent and Ofcom’s plans for regulation under the Act, CAP taking stock after one year of the “strong appeal” test in gambling marketing, the ASA’s assessment of its IPP pilot, a further CMA investigation into green claims, this time in the energy sector, a UK government consultation on the marketing of e-cigarettes, and the fact that there are new rules for advertising cryptoassets. Finally, we look at the Retained EU Law Reform Act and its implications for intellectual property matters (some of which are also relevant for consumer issues).

• Advertising and marketing
• Regulatory 
• Intellectual Property & Brexit

Advertising and marketing

CAP takes stock of “strong appeal” test in gambling advertising

In October 2022, CAP introduced new rules banning gambling ads from including any content (imagery, themes, and characters) likely to be of strong appeal to under-18s.

Since then, the ASA has published various rulings on the subject. Many of these were the result of intelligence gathered by the Active Ad Monitoring system, which uses AI to proactively search for online ads that might break the rules.

CAP guidance sets out clear categories of high, medium, and low risk content. This includes advice that football is of inherent appeal to children, and that topflight players and managers are therefore highly likely to be of strong appeal as a result. Despite this, some marketers have fallen foul of the rules by using well known footballers in their ads.

The guidance makes clear that non-UK ‘star’ footballers are also a big risk. An ad which featured an image of Jordi Alba and Sergio Busquets was banned because their position as prominent members of Barcelona, a top European club, and appearances for the Spain national team at the 2022 World Cup meant they were of strong appeal to under-18s.

Prominent stars of other sports with a significant national profile should also be avoided. The ASA issued an upheld ruling against a series of tweets that featured high profile tennis stars, including Novak Djokovic and Rafael Nadal, because their dominance of the world rankings and recent big tournament appearances meant they were considered likely to be of strong appeal.

Many factors come into play when assessing if a personality is likely to have strong appeal to under-18s.

When considering ads featuring football pundits Peter Crouch and Micah Richards, the ASA looked at how long they had been retired from playing and their social media following on different platforms, amongst other factors. While both had direct links to Premier League football, which is generally likely to be of strong appeal to children, their social and other media profiles were predominantly adult orientated. Therefore, these ads were found to not be of strong appeal to under-18s.

Although the guidance outlines that boxing is a sport likely to be of low appeal to children, the ASA still ruled against an ad for a boxing match featuring YouTuber Jake Paul. Despite having moved into boxing, the ASA considered he would primarily be known for making YouTube videos. Because many young people following him on social media and knew him from appearances on a children’s TV programme, it concluded that he had strong appeal to under-18s.

The rules do not just apply to sport, and the guidance outlines that other content likely to appeal to children, such as cartoon animation, video game references and other youth related content, are as likely to be problematical. The review is a useful illustration of how the new rules are being implemented.

For more information, see here.

ASA issues final report on IPP pilot

The ASA has published a final report on its Intermediary and Platform Principles Pilot. It involved various companies in the digital advertising supply chain, such as Amazon Ads, Google, Index Exchange, Magnite, Meta, and X (Twitter). It was devised to help explore whether and, if so, how the UK advertising self-regulatory system might evolve to bring greater transparency and broader accountability to its work online.

The Pilot centred around six key Principles, which reflect how platforms and intermediaries have, over many years, voluntarily engaged and cooperated with the ASA to help uphold the CAP Code. It also sought to develop new working relationships between the ASA and other platforms and intermediary companies.

The ASA’s Report sets out the steps the companies took to adhere to and implement the Principles. It also provides an assessment of those measures and provides examples of good practice. It also identifies areas for their potential ongoing consideration relating to the implementation of one or more Principles.

For more information, see here.

Regulatory 

The Online Safety Bill (finally) becomes the Online Safety Act

The Online Safety Bill has received Royal Assent and takes effect in two months’ time.

Ofcom will prioritise enforcing rules against the most harmful content as part of a phased approach to the Act's implementation, which will run as follows:

Phase one: illegal harms duties on platforms

On 9 November, Ofcom will draft codes and guidance on these duties, following which it will launch a consultation and publish a final decision in Autumn 2024.

Phase two: child safety, pornography and the protection of women and girls

Ofcom will release draft guidance on age assurance from December 2023, with further draft codes of practice relating to child protection being released in Spring 2024 and draft guidance on protecting women and girls by Spring 2025.

Phase three: transparency, user empowerment, and other duties on categorised services

Ofcom will issue a call for evidence regarding these duties in early 2024 and launch a consultation on draft transparency guidance in mid-2024. Further, Ofcom begin work regarding the register of categorised services in early 2024.

For more information, see here, here and here.

CMA investigates green claims

The Competition and Markets Authority has announced that it is investigating if Worcester Bosch, a leading UK boiler brand, is misleading shoppers with confusing or inaccurate green claims in the advertising and labelling of its boiler products.

The investigation will focus on Worcester Bosch’s “hydrogen-blend ready” home boilers, which range in price from around £1500 to £3200, and whether the marketing claims made about these products may mislead shoppers into thinking they are more environmentally friendly than they are.

The CMA’s investigation will look at several marketing practices including the use of:

• Labels or text stating that Worcester Bosch’s boilers can run on a blend of 20% hydrogen and natural gas, which may give the impression that this is a special feature despite all boilers in the UK being legally required to operate this way since the mid-1990s.
• Information and messaging on the use of hydrogen for home heating in the UK – despite this not currently being available and its introduction being potentially years away and depending on future government decisions.
• Descriptions and information about the environmental benefits of ‘hydrogen-blend ready’ boilers which may falsely suggest that these boilers will reduce a household’s carbon footprint.

For more information, see here and here.

UK government issues consultation on advertising vapes

The government has launched a public consultation on youth vaping as part of measures to clamp down on vapes being promoted to children.

Proposals being consulted on include:

• making it an offence for anyone born on or after 1 January 2009 to be sold tobacco products;
• restricting the flavours and descriptions of vapes so that vape flavours are no longer targeted at children;
• regulating point of sale displays in retail outlets so that vapes are kept out of sight from children and away from products that appeal to them, such as sweets;
• regulating vape packaging and product presentation, ensuring that neither the device nor its packaging is targeted to children;
• considering restricting the sale of disposable vapes, which are clearly linked to the rise in vaping in children. These products are not only attractive to children but are harmful to the environment;
• exploring further restrictions for non-nicotine vapes and other nicotine consumer products such as nicotine pouches;
• exploring whether increasing the price of vapes will reduce the number of young people using them; and
• introducing new powers for local authorities to issue on-the-spot fines (fixed penalty notices) to enforce age of sale legislation of tobacco products and vapes.

The consultation ends on 6 December 2023.

For more information, see here and here.

New rules for advertising cryptoassets in force

Following the introduction of new rules by the Financial Conduct Authority, the ASA will no longer regulate technical claims in ads for most cryptoassets in non-broadcast media.

On 8 October 2023 the FCA took over regulating ads for “qualifying cryptoassets”. These are cryptoassets that are transferable and fungible, including cryptocurrencies and utility (fan) tokens – and introducing new rules. The rules apply to all firms marketing qualifying cryptoassets to UK consumers, regardless of which country they are based in, or the technology used. However, cryptoassets as a product remain unregulated. The new rules do not cover cryptoassets that are non-fungible, such as Non-Fungible Tokens (NFTs), or Limited Payment Tokens that can only be redeemed with the issuer and used for the payments of specific goods and services, such as non-monetary customer loyalty points. The ASA will therefore continue to regulate all ads for these types of cryptoassets.

Qualifying cryptoassets have been classified as ‘Restricted Mass Market Investments’, meaning that they can be mass marketed to UK consumers subject to certain restrictions, in addition to the overarching requirement that financial promotions must be fair, clear and not misleading. The restrictions include requirements to include clear risk warnings; risk summaries and a ban on incentives to invest such as refer a friend bonuses and new joiner bonuses.

The CAP Code, and therefore the ASA, regulates the ‘non-technical’ aspects of ads for products by FCA-regulated business, such as matters relating to offence, social responsibility, superiority claims, fear and distress, denigration and other claims that do not relate to specific characteristics of the product. Complaints about technical aspects in non-broadcast ads will be referred to the FCA. CAP has reflected the remit change in its advice and guidance.

For more information, see here and here.

Intellectual Property and Brexit

IP implications of the Retained EU Law (Revocation and Reform) Act 2023

Readers of this Digest may be dimly aware of this Act, a project championed by Jacob Rees-Mogg MP, which received Royal Assent in June of this year. While its content may seem rather technical, it is worth being aware of several ways in which it could have an impact upon the intellectual property landscape when it comes into force at the end of 2023. In particular, it has implications for how UK intellectual property legislation will be interpreted, and thus potentially for how the courts might decide disputes relating to IP.

Concerns had initially been focused upon provisions in the Act, as first proposed, that would have automatically revoked at the end of 2023 a very large number of provisions of “retained EU law” under a “sunset” clause – unless they were specifically chosen to be saved. The Intellectual Property Office identified 85 pieces of IP legislation that could have fallen foul of this provision (most of the UK’s legislation in the IP field is based upon EU law), but during Parliamentary debates the Government backed down from its original proposals, and only a specific list of laws will now be affected by the “sunset” – only 7 items on that list relate to intellectual property and they are all statutory instruments which are either inoperable or superseded.

The Act still retains some provisions that make important changes, however, of which we will briefly summarise three.

First, the Act changes the way that courts must approach the interpretation of UK legislation (including our IP statutes), abolishing the pre-existing principle of “supremacy of EU law” (including the requirement that UK laws be interpreted so far as possible in line with the EU law that they were intended to implement). For litigation commencing in 2024 there is the potential for parties to ask the UK courts to put aside their case-law of the last few decades and look afresh at the UK legislation in its own terms. In theory, this might mean that provisions of UK legislation that seem to have been undermined or “stretched” by rulings of the EU Court of Justice might come back into their own. Examples could include: the “closed list” of types of work that can be protected under the Copyright, Designs & Patents Act 1988, the requirement that works of artistic craftsmanship should meet an “artistic” threshold, or reverting to a narrower range of trade mark functions that can be invoked under the Trade Marks Act.

Secondly, the Act introduces a novel system for the lower courts to refer points of law to the Court of Appeal (or Supreme Court) to consider whether to “depart from” existing EU-based case-law (which in general is useful as an aid to interpreting our EU-based legislation). Such references can only be made if the court considers it a point of general public importance, but could for example be thought justified where there are apparent inconsistencies between the wording of UK legislation and the case-law developed by the EU Court of Justice (such as listed above).

Thirdly, the Act makes a sweeping change across the whole of the UK statute book, removing all references to “retained EU law” and replacing them with references to “assimilated law”. This is unfortunate, as it makes the statutes less transparent – there is no longer anything to specifically flag up to the uninitiated that the “assimilated” provision was based in EU law.

Returning to the potential impact of the first and second change summarised above, both of which relate to the interpretation of UK law, the main take-away is that from the beginning of 2024 we will be entering a period of greater uncertainty. Broadly speaking, the UK courts are fairly conservative institutions which prefer consistency and have other interpretative principles which may lead them to reconfirm the conclusions previously reached based upon EU case-law. This may particularly be so in the area of intellectual property, where the UK and the EU are both members of the same international IP conventions which prescribe the basic principles that must be followed. But until we have had a range of Court of Appeal or Supreme Court rulings in the key areas of uncertainty, we will not know for sure.

For more information, see here and here.