Ads & Brands Law Digest: April 2021
05 May 2021
Welcome to the April 2021 issue of our monthly Ads & Brands Law Digest.
Advertising & Marketing
CAP issues reminder on gambling advertising
The Committee on Advertising Practice has issued a reminder about advertising gambling products. It highlights the fact that alongside the usual rules around misleading claims, promotional marketing and offence, there are also specific rules for gambling to ensure that ads are socially responsible. This includes not condoning gambling behaviour that could lead to financial harm and not suggesting that it can be a solution to financial concerns.
The guidance says that gambling ads must not portray, condone or encourage behaviour that could lead to financial, social, or emotional harm. This includes encouraging consumers to continue gambling after a loss, implying that consumers can excel in poker without previous experience and emphasising the buzz consumers may feel while gambling. Gambling ads must not exploit the susceptibilities, aspirations, credulity, inexperience or lack of knowledge of children, young persons or other vulnerable people. Advertisers should not encourage consumers to place higher bets to improve their chances of winning and suggesting that their luck could improve and presenting the gambling service as a stock, making it seem like an investment opportunity.
While winning a large sum of money is the subject of many a daydream, CAP reminds marketers that gambling ads must not suggest that gambling can be a solution to financial concerns, an alternative to employment or a way to achieve financial security. Gambling ads must not show gambling taking priority in life. Appeal to children is a key concern for gambling ads and ads should not appeal to under-18s more than to over-18s. The ASA has scrutinised not just gambling ad content, but the media through which ads are delivered, the characters shown, cartoon graphics and even product names for their appeal to children.
For more information, see here.
CAP issues guidance on advertising cryptocurrencies
The Committee on Advertising Practice has also issued guidance on advertising cryptocurrencies. Although Bitcoin has been around for over a decade, cryptocurrencies are a relatively new development and there are limits on their regulation. Marketers must not mislead consumers as to whether products are regulated.
Although some people have made money investing in cryptocurrencies, they are volatile investments which can depreciate in value very quickly. Often the value of cryptocurrencies can fall even faster than they rise. The CAP Code requires that ads must make clear that the value of investments is variable and, unless guaranteed, can go down as well as up. Therefore, if marketers want to imply that consumers might make money from investing in cryptocurrencies, they must make them aware of the risks too.
Because cryptocurrencies are so volatile, even including a disclaimer in the small print of an ad might not be enough to comply with the CAP Code. Because cryptocurrencies are quite new, marketers need to be careful that their ads do not take advantage of consumers’ inexperience or credulity. They also must make the basis of any forecast or projection apparent immediately and must not misrepresent any past performance. The CAP Code also requires that marketers explain products in ways that are easily understood by those it is addressing. Marketers should consider who might see their ads when thinking about what language to use.
The guidance also covers Non-Fungible Tokens (NFTs) in brief. NFTs are very new and consumer understanding of them may therefore be limited. Although the ASA has not yet ruled on any cases about NFTs, marketers should be careful to make their ads clear, accurate and understandable so they do not mislead consumers.
For more information, see here.
CAP issues guidance on advertising animals
CAP has also issued guidance about advertising animals and the possible appeal of animals in advertising to children. Animals often feature in advertising. If the content is likely to appeal to both age groups equally, or more so to adults, then it is unlikely to be considered problematic.
It is important to ensure that if you are advertising an age-restricted product that you tread carefully when featuring animals as it could mean the ad is of particular interest to children.
More generally, however light-hearted the execution, you need to take care when depicting scenarios potentially harmful to animals and which could feasibly result in harmful emulation.
Particular care is advisable when showing animals being fed or eating something that could harm them, to ensure this isn’t likely to lead to dangerous emulation. The British Veterinary Association has produced authoritative guidance on the responsible use of pet animals in advertising, intended to support decision-making that promotes positive animal health and welfare, which is a good place to start in learning more about the particular welfare needs of different animals.
The guidance reminds marketers not to mislead about animal testing and to take care with health claims for animals.
Competition Law & Regulatory
ASA issues annual report
The ASA has issued its annual report in which it highlights how it is evolving the way it regulates with the aim of making make sure young and vulnerable people are protected from misleading, harmful or irresponsible ads. In 2020 it resolved 36,342 complaints about 22,823 ads; had a record 36,491 ads withdrawn or amended, an increase of 346% on 2019 thanks to tech-assisted online ad monitoring; and provided 722,376 pieces of advice and training to businesses.
Online cases made up 61% of all cases and nearly half of all complaints across media – 17,379 complaints about 14,512 cases. TV complaints increased by 43% (perhaps reflecting increased viewership during lockdown) but only made up one fifth of all cases. Complaints about influencer posts decreased by 8%, but still made up almost a quarter of online cases. The health and beauty sector had the most ads amended and withdrawn.
The report also highlights how the ASA is responding to calls for more accountability and transparency for online platforms. It is also carrying out work in the following areas: including: launching a climate change and the environment project to keep its rules and casework up to date; reviewing its past decisions on issues that touch on race and ethnicity and commissioning research on harmful racial and ethnic stereotypes; consulting on new rules that will prohibit advertising for cosmetic interventions from being directed at those under the age of 18 as well as preparing to launch a call for evidence to examine the potential harms relating to body image and the potential impact of advertising on consumers’ mental health; and launching its own ad campaign in Scotland and conducting a first wave of consumer research to benchmark public views on trust in advertising and awareness of the ASA.
For more information, see here.
ASAI issues annual report
The Advertising Standards Authority for Ireland (ASAI) has also issued its annual report. It received a total of 1,648 written complaints concerning 1,072 advertisements last year. This represents an 12.6% decrease on the number of complaints received in 2019, while the number of advertisements complained about increased by just over 22% compared to the same figure for 2019. The main sector complained of was health and beauty, followed by telecommunications and leisure. Digital media attracted the most complaints by media.
68% of the complaints made in 2020 related to an advertisement being misleading, while 12% said that an advertisement was offensive.
The ASAI also highlighted the fact that Google is the first corporate member of the European Advertising Standards Alliance (EASA), and a partner of the ad self-regulatory network.
In 2020, the ASAI also continued its ongoing focus on providing information and guidance to the influencer and blogger industry. As part of this, ASAI conducted research about consumer sentiment which revealed that just over half (51%) of people in Ireland say they are concerned by a lack of transparency in influencer marketing. With transparency being a significant aspect of the ASAI’s brief in seeking to maintain the highest standards in advertising, this statistic demonstrates the level of consumer concern in a growth marketing area. The concept of transparency is one that the ASAI continues to strongly promote amongst advertisers, and particularly in the growth area of influencer marketing.
For more information, see here.
CMA publishes Annual Plan
The Competition and Markets Authority has published its Annual Plan setting out the CMA’s key areas of focus for 2021 to 2022. The Plan supports its mission to make markets work well for consumers, businesses and the economy.
The Plan has been published as the CMA takes on additional responsibilities for global competition and consumer investigations, following the end of the EU Exit transition period, and as it works to establish the new Digital Markets Unit and the Office for the Internal Market. In taking on its new responsibilities, the CMA will continue to protect consumers and ensure that businesses operate within the law, during and beyond the current pandemic.
For more information, see here.
Appeal confirms approach to UK domain name “similarity” in Nominet’s Dispute Resolution Service (DRS)
The dispute resolution service (DRS) offered by Nominet is intended to provide an efficient and cost-effective means of resolving disputes regarding registrations of .UK domain names. In particular, it gives the owners of rights in a name or trade mark the opportunity to oppose abusive registrations of domain names that are identical or similar to their existing name or trade mark. The service offers initial rulings by a single expert plus the potential for an appeal to a panel of three experts. Such appeals are apparently rare, but in this case it proved worthwhile for online property platform operator Rightmove Group.
Rightmove had complained about the registration of the domain name RIGHTTRADE.UK, which the registrant was using for a website that offered services similar to Rightmove, but the initial expert decision went against them. The single expert decided that the RIGHTTRADE domain was not sufficiently similar to the complainant’s trade mark RIGHTMOVE to found a complaint under the DRS at all (and thus he did not need to move on to considering whether the registration was abusive). He considered that the prefix “RIGHT” was so commonly used as a gimmick that it had become generic (and thus couldn’t distinguish between businesses), while the latter half of the names, “TRADE” and “MOVE” were clearly dissimilar.
On appeal, the panel of three experts reversed this decision. First, they held that the requirement for “similarity” under the DRS is a deliberately low threshold test, and that it does not require any demonstration of “confusing similarity” (in this respect it is different from the UDRP system used in respect of .com domains). Issues of confusion can be considered as part of the appraisal of whether the registration is abusive. The panel of experts disagreed that the “RIGHT” element of the two names could be disregarded and held that, overall, the words RIGHTMOVE and RIGHTTRADE were similar enough to meet the low threshold of similarity required by the DRS. Moving on then to consider whether the registration had been abusive, the panel concluded that it had been: “It is quite clear to the Panel that the Respondent has deliberately set out to give the inaccurate impression that the righttrade website is associated with the rightmove website of the Complainant.” The Panel thus ordered by way of remedy that the RIGHTTRADE domain be transferred to Rightmove.
For more information, see here (search for “D00022827” which is the Case Number).
Court of Appeal considers whether to “depart from” EU Court of Justice case-law on copyright post-Brexit
Under the European Union (Withdrawal) Act 2018, judgments of the EU Court of Justice handed down up until the end of the Brexit transition period (ie before the end of 2020) have become part of UK domestic law, known as “retained EU case-law”. However, the Withdrawal Act has also given the Court of Appeal and Supreme Court the “power to depart” from such EU case-law where they deem it right to do so. Given that the EU Court of Justice has given very many important judgments on matters of intellectual property over the years, and given that they are highly relevant to interpreting those aspects of ongoing UK law that have been based upon EU Directives and Regulations on IP, the readiness (or otherwise) of the Court of Appeal or Supreme Court to diverge from the EU case-law has become an important question hanging over IP litigation in the UK.
The first indication of the approach of the Court of Appeal to this question has now been given, in a judgment relating to EU Court of Justice case-law on the “communication to the public” right in copyright. The facts of the case are complex and need not be rehearsed here, but suffice it to say that the Appellant had been defeated in the first instance proceedings before the High Court in 2019 (when the UK was still a member of the EU). As its appeal was not heard until February 2021, the Appellant took the opportunity to ask the Court of Appeal to utilise its new power to depart from retained EU case-law – in this case to diverge from the EU Court of Justice jurisprudence on what constitutes “communication to the public” for the purposes of copyright law.
The Court of Appeal gave this argument short shrift. Lord Justice Vos, Master of the Rolls, commented: “I regard this as a paradigm case in which it would be inappropriate for the Court of Appeal to exercise its new-found power to depart from retained EU law.” First, this was because the relevant copyright law derives from international treaties, and the courts of the treaty member states “should, wherever possible, be striving to achieve harmonious interpretation of them, not individualistic disharmony” – particularly in an area with cross-border impacts such as copyright and the internet. Secondly, the Court of Appeal in such cases must apply the Supreme Court’s approach when departing from its own decisions, which is to be very circumspect and usually only doing so in cases where it might otherwise lead to injustice or an undue restriction in development of the law. But in this case, Vos LJ held: “…the CJEU’s approach to the law of infringement of copyright by communication to the public is neither impeding nor restricting the proper development of the law, nor is it leading to results which are unjust or contrary to public policy. It would, therefore, be both unnecessary and undesirable for this court to depart from retained EU law in this case. To do so would create legal uncertainty for no good reason.”
It seems likely that similar arguments will be applicable in most other scenarios in which the Court of Appeal or Supreme Court might be asked to “depart from” retained EU case-law on IP matters, and so we can expect such departures only in fairly exceptional circumstances. The most likely scenarios for such departures to occur may perhaps be where there is an apparent conflict between UK legislation and EU case-law, and where there is no clear international treaty law upon which both UK and EU law are jointly based.
For more information see here (in particular the Master of the Rolls’ judgment at paras 196-202).