Advertising Standards Agency Powers extended - what impact does this have?

The UK Code of Non-Broadcast Advertising, Sales Promotion and Direct Marketing (the CAP Code) sets out a number of important principles designed to ensure that marketing and advertising falling under the remit of the code is legal, decent, honest and truthful. 

On 1 March 2011, the CAP Code was extended to cover marketing communications and advertisements that are displayed in non-paid for web space. This includes editorial website content as well as social networking sites such as Facebook and Twitter. Before March 2011, the CAP Code only applied to paid for online advertising, as well as print advertisements, direct mailing and sales promotions which it continues to cover.

Now, anyone who wants to complain about marketing communications within the content of a business' website or on third party web-space such Facebook or MySpace can complain directly to the Advertising Standards Agency (ASA). 

Also, if a business adopts and incorporates user generated content within its own marketing communications (e.g. retweeting comments on Twitter), this content will fall within the Advertising Standards Agency's remit.

The CAP Code does not form part of the law with sanctions such as fines, so why should you care? 

The Advertising Standards Agency has a number of powers that, if exercised, can have a significant adverse effect on the goodwill and reputation of a business. 

The general public or, as is often the case, a business' competitors can lodge complaints with the ASA. If the ASA finds that an advertisement breaches the CAP Code, the ASA will ask the advertiser to withdraw or change it.

The ASA cannot levy fines for non-compliance but does have a number of other sanctions which it can use to ensure compliance:

• Refusal of further advertising space. The ASA can ask publishers and media owners to refuse more space for an advertisement until it has been changed or for an advertiser who is a regular offender. It can impose a pre-vetting requirement for some or all of an advertiser's marketing communications which means advertisers must seek copy clearance from the CAP copy advice team before they can publish advertising.
• Adverse publicity. The ASA publishes weekly reports of its rulings on its website, which members of the public can access freely. Adverse rulings may also attract adverse media coverage. This is perhaps the ASA's most powerful sanction, as the media will often report on adjudications, especially if they are about well-known organisations or brands. If the ASA carries out a full investigation into a complaint, a full report will be published on the website, regardless of whether the complaint is upheld or not.
  The ASA may also ask an advertiser to change its advertising, which will be recorded on the website, without publishing details of the complaint or the ASA's concerns.
• Withdrawal of trading privileges. Trading privileges, financial discounts and other incentives available through membership of some of the advertising trade bodies can be withdrawn from advertisers who do not comply with the ASA's decisions.
• "Legal back-stop": Often referred to as the legal backstop, if the ASA's non-statutory powers do not persuade a non-broadcast advertiser to change their advertising, the ASA can refer an advertiser, agency or publisher to the Office of Fair Trading (OFT). The OFT can seek an injunction through the courts to prevent the same or similar claims being made in future advertisements.

From 1 March 2011 two new sanctions were added to the ASA's armoury to allow it to regulate advertising on organisations own websites and in other online space within the control of the advertiser, such as postings on social networking websites. The ASA is now able to:

• Name and shame offenders, both on an ASA microsite, which the ASA may publicise, and by way of paid-for advertisements on internet search engines which highlight the continued non-compliance and link to the ASA microsite.
• Remove paid-for search advertisements that link directly to the non-compliant marketing communication on the advertiser's own website or other non-paid-for space online under its control. The cooperation of search engines will be required to implement this.

What is the message to the retail sector?

The ASA does have a clear interest in the retail sector as the recent adjudication against Jack Wills demonstrates. Given the ASA's new and extended powers the retail sector can expect more of the same in future. Retailers better be prepared or risk being caught out!  

Tom Torkar is an Associate in the Technology, Media and Communications Michelmores team. For further information on the issues raised in this article, please contact Tom at tom.torkar@michelmores.com.