Sit down to relax with our Newsletter and enjoy our discussion of various advertising and brands topics.
We hope you enjoy it.
Brinsley Dresden and Geraint Lloyd-Taylor
CAP delays guidance on media restrictions on ads for “less healthy” food and drink products
CAP has issued an update explaining when it plans to finalise the guidance for implementing the new advertising restrictions on less healthy products (LHF) (which come into force on 1 October), the next steps in the consultation process and expected timelines to conclude its work. CAP consulted on draft guidance in December 2023. However, it now considers that some parts of its proposed guidance are likely to require revision, particularly parts relating to brand advertising. The revised guidance is likely to clarify that, even if your ad does not explicitly refer to or feature an LHF product, it may still be restricted under law, where people in the UK could reasonably be expected to be able to identify your ad as being for an LHF product or LHF products. CAP is now preparing a revised version of the guidance for consultation in the coming weeks. It plans to publish the final guidance in the spring.
CMA to investigate Google’s search services
The Competition and Markets Authority has launched its first strategic market status (SMS) designation investigation under the new digital markets competition regime in the Digital Markets, Competition and Consumers Act 2024, which came into force on 1 January 2025. The investigation will assess Google’s position in search and search advertising services and how this affects consumers and businesses including advertisers, news publishers, and rival search engines. Under the digital markets competition regime, the CMA may designate firms with SMS in relation to a particular digital activity. Once designated, the CMA can impose conduct requirements or propose pro-competition interventions to achieve positive outcomes for UK consumers and businesses. The CMA’s investigation will assess whether Google has SMS in the UK search and search advertising sectors and, in parallel, consider whether conduct requirements should be imposed if it makes a final designation decision. It must make a decision within nine months.
CMA issues draft Annual Plan consultation 2025 to 2026
The CMA is consulting on its draft Annual Plan for 2025 to 2026. Among other things it says it will focus on areas such as drip and dynamic pricing, travel, housing, online entertainment; and where the CMA has previously set expectations for responsible businesses, such as unregulated legal services and trader recommendation sites. It will also continue competition investigations in relation to online advertising. The consultation ends on 31 January 2025.
ICO consults on storage and access technologies
The ICO is consulting on draft updated guidance on storage and access technologies, which is a significant update to the detailed cookies guidance. It aims to clarify and reference the range of storage and access technologies that are widespread, alongside cookies. The consultation ends on 14 March 2025.
CAP and BCAP issue updated advice on promotional savings claims
CAP and BCAP have issued updated guidance about promotional savings claims. It includes guidance about using reference prices, stresses the need for caution when making savings claims against RRPs, ensuring “up to” and "from" claims do not exaggerate potential savings, the importance of not artificially inflating prices and using the correct terms for introductory offers. It also refers to the guidance of the CTSI and the CMA.
CAP and BCAP update guidance on mid-contract price increases in telecoms contracts
CAP and BCAP’s amended guidance on the presentation of mid-contract price increases in advertising comes into force on 17 January 2025. This reflects Ofcom’s prohibition on inflation-linked and percentage-based increases in telecoms contracts
Ofcom’s changes require providers to set out at the point of sale what the changed monthly price of a contract will be, if it is to change during the commitment period, and from when the changed price will apply, in pounds and pence. In effect, this change to Ofcom's rules prohibits providers from offering contracts that provide for inflation-linked price rises, or price rises set out in percentage terms, to the monthly price during the contract period.
The CAP and BCAP guidance on presentation of mid-contract price increases in telecoms contracts states that information about the presence and nature of a mid-contract price rise should be clear and prominent to avoid misleading consumers. However, in light of the Ofcom rules, the type of information in ads for contracts will now change, and the guidance has been updated to reflect this.
Lack of a right to terminate traps TM licensee in agreement of indefinite duration
The High Court has rejected an application by a trade mark licensee that its licence agreement – which gave it no express power to terminate – should either be interpreted so as to include an implied right for either party to terminate on reasonable notice of one year, or should be declared unenforceable on grounds of restraint of trade. The judge noted that the agreement had been reached at arms length and for good commercial reasons at the time of its signing. There was no reason to interpret/imply an additional right to terminate on reasonable notice, while the fact that the trade mark licence was “one-sided” with only the licensor (not the licensee) having express rights to terminate simply showed that it had been a bad bargain rather than amounting to restraint of trade.
The licence agreement in question dated from 2013 and related to the “Zaha Hadid” trade mark, which the famous architect of that name had licensed to the firm of architects to which she belonged. It provided for a 6% royalty to be paid on the net income of the licensed services (that is, those of the architects’ firm trading under the licensed name) initially payable to Zaha Hadid herself, and after her death to the Zaha Hadid Foundation, which was the defendant in this case. Perhaps unsurprisingly, 11 years on from the agreement, and eight years after the death of Zaha Hadid, the architecture firm was beginning to feel that it might no longer want to trade under the Zaha Hadid name, and/or that a 6% royalty on its net income was too high a price to go on paying. But under the licence agreement, the termination clause gave only the licensor (the Foundation) the right to terminate, on various grounds, while the licensee (the firm of architects) had no express right to terminate at all. Hence these legal proceedings, by which the licensee firm of architects hoped either to be able to terminate on reasonable notice (1 year), or to escape the licence on the grounds of restraint of trade.
The licensees pointed to previous case-law in which the courts had been willing to imply a right to terminate on reasonable notice into agreements of indefinite duration. But the judge here noted that more recently the courts have distinguished with greater care between interpreting the existing contractual terms on the one hand, and implying new contractual terms on the other. In this case, the drafting of the one-sided termination clause was clear and unambiguous, and there were no grounds to imply additional wording. Even though this left the licensee architects’ firm with a bad bargain, that did not mean that it should be struck down for being in “restraint of trade”. On the contrary, the royalty mechanism and other clauses of the licence agreement meant that both parties had a shared interest in optimising the trading of the architects’ firm. The trade mark played its role in the success of the firm, and the judge found no legally relevant restraint of trade: in the end the firm’s complaint was “really the same as saying it wishes the terms were more generous”.
The case is a salutary reminder of the need to pay due attention to the drafting of “boilerplate” clauses such as termination provisions when entering into licence agreements, and to plan for the long term rather than just the immediate circumstances applicable when entering into the licence.