On Thursday afternoon we held our Advertising & Marketing Law Annual Review and our speakers Brinsley Dresden, Jo Farmer, Bryony Long and Geraint Lloyd-Taylor discussed the following key themes.
ASA five year strategy and its Intermediary & Platform Principles Pilot
The ASA announced its five year strategy in late 2023. Its core aims are to be more proactive and act more quickly, while concentrating its resources on cases that really matter, including influencer ads and inappropriate targeting. It also wants to concentrate on protecting the vulnerable, such as the young, the elderly or the recently bereaved and plans to use its AI driven Active Ad Monitoring system to identify the ads which are causing the most damage to the most people. In addition, it aims to increase its reach by working more closely with international bodies and other regulators, leading to more enforcement notices such as the joint one with HMRC regarding tax repayment agents. The ASA has also been running an Intermediary and Platform Principles Pilot under which it has been collaborating with social media and other platforms to help to combat misleading and other troublesome advertising, especially by advertisers based outside the UK but which target UK consumers.
Generative AI - how is it being used in advertising?
No webinar would be complete without a reference to AI, including platforms such as ChatGPT or Midjourney. It is being adopted very quickly and advertising is at the forefront of it - e.g. in copywriting, audio, images, subtitles etc. One example is KitKat's ad which said "AI made this ad so we can have a break" trading on its usual strapline "Have a break, have a KitKat". Using AI naturally leads to legal issues, such questions about ownership of the IP in AI-generated or AI-assisted content and possible infringement of the IP rights in the datasets AI has been trained on. As ever, there are no easy answers and we will have to wait for the courts to decide! However, there are some useful principles you can follow to protect your business, and the ASA has also provided some guidance.
In terms of AI regulation, the UK government would prefer a light touch approach, with regulators publishing their own guidance; this contrasts with the EU, which is taking a much more prescriptive approach with its AI Act.
Consumer protection
The Online Safety Act received Royal Assent in late October and is likely to come into full effect in early 2025, although some of its provisions are now in force. Organisations will be required to remove fraudulent advertising (but not other advertising, which is the subject of the government's Online Advertising Programme).
The Digital Markets, Competition and Consumers Bill is currently passing through the legislative process. It restates and tweaks the Consumer Protection from Unfair Trading Regulations. It introduces increased powers for the CMA which will be able to take action itself rather than having to go to court and can impose GDPR-style fines. The Bill also introduces strict new rules for subscriptions. In addition, the government has consulted about making fake reviews a banned practice under the Bill as well as issues such as drip pricing and unit pricing.
The CMA (along with the ICO) is investigating certain companies regarding their use of "dark patterns" or online choice architecture to nudge consumers into e.g. making decisions that they would not have made otherwise. See our event later this month for more information.
Data protection regulation
The new Data Protection and Digital Information Bill may achieve Royal Assent this spring. It harmonises fines under the UK GDPR and the Privacy and Electronic Communications Regulations, which is likely to change organisations' risk profiles. The Bill also amends the "soft opt in" to extend it to charitable and non-profit organisations. Finally, the cookie exemption will be widened to e.g. cover analytics (the exact details are still somewhat unclear).
The impact of the EU's Digital Services Act and Digital Markets Act, under which transparency is a particular focus, in particular about advertising. The DSA also bans the use of special category data and children's data for targeted advertising. In addition, the DMA also requires more stringent user privacy controls. These requirements primarily affect the platforms, but this will trickle down to their users as well.
The ICO has been investigating cookie notices, and like the ASA they have an automated tool for checking compliance. They sent letters to organisations requiring changes by the middle of this month. Around ¾ of the organisations affected have responded and changed their practices to introduce a "reject all" button. The EDPB has also been considering other tracking technologies.
Last year also saw various significant fines being imposed for online advertising and direct marketing activity and Meta's move to use a "pay or consent" model in the EU.
Influencers and "finfluencers"
This year has been quieter on influencers. However, the CMA and the ASA have issued updated guidance on making clear that ads are ads. They continue to require #ad rather than other labels such as #gifted, #prtrip and #affiliate. The latter can be used, but it is safest to use them in conjunction with #ad.
The ASA and FCA have also collaborated on guidance for influencers about financial services and illegal financial promotions as well as crypto and NFTs.
Environmental advertising
Finally, we discussed green claims and rulings on them, as well as the differing roles (and enforcement powers) of the ASA and the CMA. Although the ASA can't issue fines, compliance with their decisions is high and advertisers tend to take their requirements seriously. The ASA is now using the social responsibility provisions in the advertising codes to police green claims, as well as the requirement not to mislead by omission. The key is to tell the whole story and not cherry pick your claims. For example, Anglian Water was admonished by the ASA for saying that they protected the environment when in fact they have a poor record on releasing raw sewage. CAP has also updated its guidance on green claims as well as on green disposal claims.
The CMA is currently investigating eco-friendly claims in the fashion and FMCG sectors, although the pace of progress of the investigation into the fashion sector is disappointingly slow.
The EU has proposed a Green Claims Directive intended at supporting a circular and green economy. The European Parliament is due to vote on it in February and March. A key requirement will be that green claims must be independently verified before making them, but it is not clear how that will work and it could lead to greenhushing.
In addition, other jurisdictions, such as the US, are considering changing their rules on green claims.
Thank you to all those that joined us. We will be sending out copies of the slides and a recording of the webinar to all those who registered. Please let us know if you would like a copy.