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Ads & Brands Law Digest: August 2019

31 July 2019

Welcome to the August 2019 issue of our monthly Ads & Brands Law Digest.

Advertising & Marketing

CMA launches Market Study into Online platforms & Digital advertising

The Competition & Markets Authority has been asked by the Government to investigate online platforms and digital advertising, and has now confirmed that it is launching a “market study” of this sector. The principal concerns that it intends to address are a) the market power of the main platforms (such as Google, Facebook, YouTube, Instagram and Amazon) in consumer-facing markets; b) the lack of consumer control over the use of their data, and the ways that it is monetised by such platforms; and c) the extent to which the market power of the main platforms may distort competition in digital advertising, plus the extent to which lack of transparency and conflicts of interest are a problem in the intermediation of advertising.

The CMA expects the outcome of its market study to be recommendations for regulatory and legislative reform, to allow intervention in the activities of online platforms and markets, rather than a focused market investigation. It will liaise with the Information Commissioners’ Office which is conducting similar investigations but focused upon the use of personal data in digital advertising. The CMA has invited interested parties to submit comments by the end of July, and aims to confirm whether a market investigation will be launched by January 2020, and to publish a final report by July 2020.

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ASA publishes latest 'avatar' monitoring report on Online HFSS Ads

The Advertising Standards Authority has published a further monitoring report based upon the use of avatars to mimic internet users of different ages. In this case the focus was upon ads for HFSS products (high in fat, salt or sugar), which are subject to age-related restrictions in the CAP and BCAP Codes. No clear evidence was found of HFSS advertisers actively targeting the child profile avatars, or of using celebrities or licensed characters to direct ads to children under 12. But 43 ads for HFSS products (0.5% of the ads served) were served on 13 Children’s Websites, and 490 ads for HFSS products (2.3% of all ads served) were served alongside videos on 55 YouTube channels aimed at children. Overall, 2.3% of the 41,030 ads seen by the avatars were for HFSS products. CAP is said to have “engaged with the businesses involved to ensure that the rules…aren’t broken again.”

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ASA ruling on Ogilvie Promotions of 3rd July 2019 - existence of contract between promoter and competition entrant did not render CAP Code non-applicable

This Advertising Standards Authority adjudication related to complaints that the closing date for a “win a house”-style promotion had been unfairly extended by 12 months. The promoter of the competition pointed out that all entrants had to pay a fee and confirm their agreement to the contractual Ts & Cs, which included a right to extend the closing date. It argued that if the entrants had any complaints about the extension of the closing date it was thus a contractual matter and not subject to the CAP Code or within the ASA’s remit. The ASA gave this argument short shrift – notwithstanding the contractual position as between the promoter and the entrant, the competition was clearly a promotion of the type that was subject to the CAP Code. As the Preface of the Code points out, some rules go beyond the content of ads, “for example those that cover the administration of promotions.” The ASA went on to find that the 12 month extension to the “win a house” competition was not justifiable, as earlier entrants had been disadvantaged by it.

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ASA ruling on Sanofi & 'This Mama Life' of 3rd July 2019 - promoting a prescription-only drug via an Instagram account with 30,000 followers was contrary to the CAP Code as a 'celebrity' endorsement

In a ruling that made many newspaper headlines, the ASA in this case found that having 30,000 followers on Instagram was sufficient for the account owner to be considered a “celebrity” for the purposes of the CAP Code. The ruling was made in the context of Rule 12.18 of the Code which says that “marketers must not use health professionals or celebrities to endorse medicines”. The Instagram account owner had endorsed an over-the counter treatment for insomnia called “Phenergan Night Time”, saying that the tablets had “really helped” her fall asleep. She had included an “AD” tag at the end of the Instagram post, so in this case the breach of the Code was not due to a lack of transparency. The ASA held that a following of 30,000+ was sufficient to qualify as a “celebrity” for the purpose of breaching Rule 12.18.

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ASA ruling on Sky Bet of 10th July 2019 - Earlier ruling reversed - references to 'sports noggin' had not exaggerated the role that knowledge can play in gambling success

Regular readers of this Digest may recall that in our April edition we flagged up the potential inconsistency between a) a recent ASA ruling against a TV ad for Sky Bet that asked gamblers ‘how big is your sports noggin?’, and b) its January 2017 ruling in which use of a strapline ‘Luck is No Coincidence’ was found not to be misleading. It seems that Sky Bet may also have pointed this out, as the ruling against them has now been reversed. The ASA had previously held that Sky Bet’s references to sporting knowledge were irresponsible as they created “an unrealistic perception of the level of control consumers would have over betting success.” But the ASA has now accepted that the ad focused instead upon particular features of a “Request a Bet” service that was being promoted, while the use of the phrase “in sport anything does happen” in the same TV ad also helped to remind viewers of the uncertain nature of sporting outcomes.

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Commercial & Consumer

ECJ rules that Consumer Rights Directive does not require traders to provide a telephone contact number (provided other quick and efficient means of communication are available to the consumer)

The EU Consumer Rights Directive, as implemented in the UK by the Consumer Contracts Regulations 2013, requires traders to provide consumers with their “telephone number, fax number and e-mail address, where available” before the contract is entered into. Based upon the words “where available”, the EU Court of Justice has now ruled that there is no absolute requirement to provide all or indeed any of these particular means of contact – the underlying requirement is to offer at least one quick and efficient means of communication. Phone or email are likely to be the most common, but equally valid might be text message, electronic contact forms or a call-back system, provided that they are quick and easy for the consumer to use.

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Data & Privacy

ICO fines EE £100,000 for sending 'service messages' containing marketing messages

In early 2018, telecoms provider EE sent text messages to its customers encouraging them to use a “My EE” app to manage their account, and also to upgrade their phone. A similar follow-up message was sent to those who didn’t respond; in total over 16.5 million such messages were sent, of which 2.59 million were received by customers who had opted out of receiving marketing messages by text.

EE tried to persuade the Information Commissioner’s Office that the texts were "service messages” that were not covered by the rules on electronic marketing, but the inclusion of the content promoting an upgrade had rendered what might otherwise have been a service message into a marketing message. (In fact, the ICO even felt that encouraging use of the “My EE” app was a marketing message, as the app itself offered customers a mixture of service information and options to purchase products or upgrades.) As the ICO put it: “if a message that contains customer service information also includes promotional material to buy extra products or services, it is no longer a service message and electronic marketing rules apply.”

Since EE didn’t have the appropriate consent from the 2.59 million of its customers who had opted out of receiving marketing messages, a fine of £100,000 was imposed, and the ICO took the opportunity to issue a reminder that it can now impose fines up to £500,000 in value.

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Domain Names

EurID announces adjustment to rules to allow EU citizens to retain .eu domains while resident in the UK post-Brexit

This Digest has previously highlighted the impact of Brexit upon .eu domain name ownership: as of the UK’s withdrawal date, organisations that are established in the UK (but not in the EU) and non-EU individuals who reside in the UK will no longer be eligible to register or renew .eu domain names. This adjustment to the rules clarifies that EU citizens (i.e. citizens of the remaining 27 EU Member States, not including the UK) will be able to own .eu domain names wherever they are resident - even if they are resident in the UK.

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