Advertising Law – A Quick Guide

Background

The world of advertising, when done properly, can open products and services to new customers and audiences. Whether you are a new or existing advertiser, is it important to be aware of applicable laws and regulations on advertising, understanding why it is crucial to comply with them and avoiding any sanctions for any non-compliance.  

Regulatory Position

Advertising in the UK is governed by a combination of regulatory laws and self-regulation.

The main law that determines advertising claims is the Consumer Protection from Unfair Trading Regulations 2008. This regulation seeks a generic ban on unfair commercial practices, a further ban on misleading and aggressive practices which are judged by reviewing the effect they have (or likely to have) on the typical consumer, and a list of commercial practices which will always be unfair and are prohibited outright.

A breach of the above regulation allows for the bringing of both civil and criminal claims against directors and other officers of corporate entities. Also, a consumer is allowed civil redress in connection with certain breaches, including rights to a refund.

Separate to the above, there is also another legislation known as the Business Protection from Misleading Marketing Regulations 2008 which covers business-to-business comparative advertising arrangements, i.e., where one business markets its product or service in way that shows its superior when compared to another business competitor. The above seeks to firstly prohibit such advertisements that misleads traders and secondly, regulate different advertisements by various businesses.

Consumer protections by legislation are enforced by the Competition and Markets Authority and also by Trading Standards,

Self-Regulatory UK Codes, their Scope and potential Sanctions for breaching them

The below Codes aim to support legislation by providing better regulation of the advertisement industry and provides consumers with a free and easily accessible route for resolving disputes.

The main self-regulatory codes are divided between broadcasting and non-broadcast advertising, the first belonging to the UK Code of Broadcast Advertising (abbrev. BCAP Code) and the second belonging to the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (abbrev. CAP Code).

The BCAP Code seeks to regulate television or radio promoted advertisements. The CAP Code seeks to regulate advertisements such as those found online or typically found in press releases, including advertisements on various social media platforms and even marketing material sent by email or post.

While the Committee of Advertising Practice (CAP) prepare and write these Codes, it is the Advertising Standards Authority (ASA) that enforces them; both bodies include representatives of the advertising industry.

If a business is found to have made false claims in their advertising, the ASA may require the company or business to remove or vary the advertisement. They can also enforce sanctions, such as prohibiting the advertisement or requiring pre-approval for future advertisements. Also, legal action can be taken in the form of fines or other penalties.

There will always be a requirement that an advertiser to be honest and transparent about any advert they wish to promote because this will create a mutual beneficial relationship with a consumer that is built, amongst other values, good faith and honesty.

Other Potential Issues to Consider

Apart from the content of the advert, it is important to seek copy clearance of the advert itself but this will depend on the medium where the advert will be transmitted. For adverts on the television or on radio, pre-transmission clearance is required from Clearcast. For adverts on radio, clearance is required from Radiocentre however, there are certain exceptions for local radio and also on the type of product being advertised.

The advertiser must have adequate provisions in place to ensure that it fully protects personal data, especially with direct marketing advertisements, for example focused marketing via post, email or other means by using online advertising via cookies.

It is also important to ensure that the advert does not infringe any intellectual property rights of others, for example those rights found in trade marks, images, music and other protected properties.

Finally, as at the date of this article, the above Codes remain in force since the UK voted to leave the European Union and such a departure has not had a significant impact on UK laws and rules that regulate advertising and marketing; this may of course change in the future.

Blog by Andreas Kyratzis, Commercial Associate Solicitor based in our Birmingham City Centre office.