Advertising, Marketing & Promotion Comparative Guide

1 Legal framework

1.1 What are the main legislative and regulatory provisions that govern advertising in your jurisdiction?

Advertising practices in New Zealand are governed by a combination of statutes, regulations, codes and guidelines.

The main statute which governs advertising in New Zealand is the Fair Trading Act 1986 (FTA). The FTA largely governs advertising by way of its general prohibition of misleading and deceptive conduct in trade. Alongside the FTA, there are many pieces of industry-specific legislation that also govern advertising. Some of the more commonly used laws (in the context of advertising) include:

• the Sale and Supply of Alcohol Act 2012;
• the Gambling Act 2003; and
• the Electoral Act 1993.

Other areas of law – such as intellectual property, contract law, passing off and defamation – also play a role in governing advertising practices in New Zealand.

Advertising is also regulated by the Advertising Standards Authority (ASA), a self-regulatory body which develops codes and guidance notes that set the advertising standards in New Zealand. The ASA provides a complaints process that allows the public to file complaints regarding ads in New Zealand.

1.2 Which bilateral or multilateral instruments or treaties with effect in your jurisdiction (if any) have particular relevance for advertising in your jurisdiction?

There are no specific bilateral or multilateral instruments or treaties that are focused on advertising in New Zealand.

However, some industry-specific bilateral/multilateral instruments/treaties do include some advertising requirements. For example, the Australia New Zealand Food Standards Code – a joint food standards code between New Zealand and Australia (established by the Australia-New Zealand Joint Food Standards Agreement) – includes requirements on:

• the labelling of foods; and
• the kinds of claims that can be made about food in ads.

1.3 What industry codes or guidelines have relevance for advertising in your jurisdiction?

The ASA develops codes that set the advertising standards in New Zealand. There is currently one general code and five industry-specific codes that apply to ads in New Zealand. These codes are:

• the Advertising Standards Code;
• the Alcohol Advertising and Promotion Code;
• the Children and Young People's Advertising Code;
• the Gambling Advertising Code;
• the Therapeutic and Health Advertising Code; and
• the Financial Advertising Code.

The ASA have recently announced the adoption of two new codes, the Children's Advertising Code, and Food and Beverage Advertising Code will replace the existing Children and Young People's Advertising Code; and the food rules currently in the general Advertising Standards Code. Both new codes will apply to newly introduced advertisements from 1 August 2024, and all advertising from 1 November 2024.

ASA codes: These codes include a combination of principles, rules and guidelines that outline the standards for advertising in New Zealand. The key principles of these codes include that ads:

• must be prepared with a due sense of social responsibility; and
• must not mislead or deceive consumers.

1.4 Which bodies are responsible for implementing and enforcing the advertising regime in your jurisdiction? What is their general approach in doing so?

The Commerce Commission is the main regulatory body responsible for enforcing the FTA. The public (both competitors and consumers) can make complaints to the Commerce Commission, which will then decide whether to investigate the complaint. The Commerce Commission can take different actions regarding the complaint (and depending on the severity of the matter), including:

• issuing a compliance advice letter or a warning letter;
• applying for an injunction to the High Court;
• commencing court proceedings (either criminal and/or civil action can be taken under the FTA); and
• negotiating settlements.

There are fines for breaching the FTA, the maximum fine being NZ$600,000 per breach by a company.

There is also an advertising complaints process administered by the ASA whereby the public can lodge a complaint regarding an ad in New Zealand. A party can file a complaint with the ASA if it considers that an ad breaches any of the ASA codes. The Advertising Standards Complaints Board (ASCB) reviews all complaints. If it accepts a complaint, the ASCB will make a determination as to whether the particular ad has breached any of the ASA codes. If the complaint is upheld by the ASCB (ie, if it is found that the ad breaches any of the ASA codes), the advertiser will be required to withdraw it.

2 Authorisation and clearance

2.1 Do advertisers need any kind of licence or authorisation in order to operate in your jurisdiction?

Advertisers do not need a licence to operate in New Zealand. However, there are restrictions on the content that may be included in ads based on the credentials of the advertiser. For example, financial advice may only be included in financial advertising from an individual or entity that has been granted an appropriate licence by the Financial Markets Authority.

2.2 Do ads require any kind of clearance before they can be released in your jurisdiction?

Commercials require obtain approval from the Commercial Approval Bureau (CAB) before they are broadcast on New Zealand television stations. Advertisers can submit their proposed ads to CAB and its approvals team will assess them. If the approvals team approves the ad, it will be given a CAB classification. This classification determines the channels on which (and the times at which) the ads can be broadcast.

Additionally, the Association of New Zealand Advertisers provides various pre-vetting services to assist advertisers in complying with New Zealand advertising rules and regulations. The different types of pre-vetting services are as follows:

• Therapeutic Advertising Pre-vetting Service (TAPS): Ensures compliance with the Therapeutic and Health Advertising Code.
• Liquor Advertising & Promotion Pre-vetting Service (LAPS): Ensures compliance with the Alcohol and Advertising Promotion Code.
• Children's Advertising Code Pre-vetting Service: Ensures compliance with the current Children and Young People's Advertising code. Note that this service may no longer be relevant from 1 November 2024.

New pre-vetting services may be put in place by the Association of New Zealand Advertisers when the new Children's Advertising Code, and Food and Beverage Advertising Code begin to apply.

These pre-vetting services are voluntary. However, like CAB, LAPPS and TAPS are supported by major media outlets. Additionally, as part of its approval process, CAB requires all ads for therapeutic products and services and all alcohol advertising to obtain pre-approval from TAPS and LAPS respectively.

3 General advertising regime

3.1 What general rules and requirements apply to ads in your jurisdiction?

The main rule for ads in New Zealand is that they must not mislead or deceive the consumer. The Fair Trading Act (FTA) sets out a general prohibition against conduct (in trade) that is misleading or deceptive or is likely to mislead or deceive. Additionally, one of the key principles of the Advertising Standards Code (ASC) (developed by the Advertising Standards Authority (ASA)) is that ads must not be misleading.

3.2 What rules and requirements apply to puffery in your jurisdiction?

In New Zealand, the use of puffery is generally accepted.

The guidelines in the ASC regarding truthful representations state that obvious puffery that is unlikely to mislead or deceive may be acceptable. The position under the FTA is similar. Although the FTA requires all representations to be substantiated (as discussed in question 3.3), there is an exception where a reasonable person would not expect the representation to be substantiated, indicating that the use of puffery in New Zealand ads will not breach the FTA.

3.3 Under what circumstances must claims in ads be substantiated?

The FTA requires that all representations made in trade be substantiated. There is an exception where a reasonable person would not expect that a representation be substantiated (eg, puffery). Where a representation is made in trade, the person making the representation must have reasonable grounds for making the representation at the time it was made. If reasonable grounds do not exist, the representation will be considered unsubstantiated and this will be a breach of the FTA. As a person must have grounds for a representation at the time it was made, it will not suffice to rely on information to substantiate a claim if the information arose after the representation was made.

Whether there are reasonable grounds for making a representation will be a matter for the court. In assessing whether a person had reasonable grounds, the court will need to consider all of the circumstances of the representation, including:

• the nature of the goods and/or services for which the representation was made;
• the nature of the representation;
• any research undertaken by the individual before the representation was made; and
• the nature and source of information relied on to make the representation.

Additionally, the various ASA codes include a requirement that advertising claims be substantiated. The ASC guidelines state that advertisers must hold evidence that substantiates any claim made in an ad.

3.4 What rules and requirements apply to the use of the following? (a) Test results; (b) Survey results and (c) Testimonials.

The FTA prohibits making false or misleading representations that goods or services have any type of approval or endorsement. Additionally, the general Advertising Standards Code imposes restrictions on the use of test and survey results and testimonials in advertising.

Rule 2(c) of the ASC prohibits misleading and or deceptive use of tests and surveys from technical and scientific literature. In the guidelines, the ASC provides that where tests are used to support claims in ads, they must be conducted (or at least verified) by an independent and objective body by way of industry-accepted methodology. Further, test results must be current and not superseded by new evidence.

Rule 2(f) of the ASC states that ads must not use a personal testimonial unless:

• written permission to use the testimonial has been obtained;
• the testimonial is verifiable, genuine and current; and the testimonial does not represent an exceptional (out of the ordinary) outcome, unless it is made clear in the advertisement that the outcome is exceptional.

Advertisers must hold onto documentation that supports any testimonials that they use. Testimonials will not suffice to substantiate any claims made in an ad.

3.5 What rules and requirements apply to the protection of minors?

The various ASA codes impose many restrictions on ads in the interest of protecting minors. Currently, the Children and Young People's Code has been applies to all ads in all media that target:

• 'children' (ie, individuals below the age of 14 years); and
• 'young people' (ie, individuals who are at least 14 years of age but under 18 years of age).

Whether an ad 'targets' children or young people is circumstantial. However, three main criteria apply, as follows:

• the nature and intended purpose of a product;
• the presentation and content of the ad; and
• whether the expected average audience of the ad (at the time and place it will appear) will include a significant portion of children or young people.

There are various restrictions on ads that are targeted at children and young people. For example, ads must not:

• encourage children or young people to ask a parent to purchase products for them;
• encourage dangerous behaviour (although an ad can discourage such behaviour);
• suggest that an individual is inferring or will not be accepted for not having a product; or
• promote unhealthy lifestyles.

From 1 November 2024 the Children and Young People's Advertising Code will no longer apply, and some of the above will change when it is replaced by the Children's Advertising Code and the Food and Beverage Advertising Code.

For example, the new Children's Advertising Code will only apply to ads targeted at individuals under the age of 16, and not those aged between 16 and 18. Another key change provides that some ads targeted at children must prominently disclose commercial intent.

Ads that target children and young people are generally subject to a higher standard of social responsibility compared to other ads.

3.6 Are certain forms of advertising prohibited in your jurisdiction?

Certain forms of advertising are prohibited in New Zealand.

Under the Unsolicited Electronic Messages Act 2007, individuals must not send unsolicited commercial electronic messages to or from New Zealand without the consent of the receiver. The term 'electronic message' covers any message sent using a telecommunications service to an email account, instant messaging account, telephone account or similar. Voice calls using standard telephone services or Voice-over Internet Protocol (eg, Skype, WhatsApp and Zoom) are exempt. 'Commercial messages' include messages that market or promote goods or services.

Ambush marketing is also prohibited under the Major Events Management Act 2007. The act prohibits businesses from attempting to create an association with major events through advertising without any formal association with the event or sponsors

In New Zealand, certain products and services cannot be advertised, including tobacco, overseas gambling and controlled drugs.

4 Misleading advertising

4.1 On what grounds will an ad be found to be misleading in your jurisdiction? How does the process unfold?

In New Zealand, an ad will be found to be misleading under the Fair Trading Act (FTA) if a reasonable person would have been likely misled by it. There is:

• no requirement for an individual to have actually been misled or deceived; and
• no need to show that there was an intention to deceive.

The Commerce Commission is the main regulatory body responsible for enforcing the FTA. Competitors and consumers can make complaints to the Commerce Commission, which can choose to investigate the complaint. The Commerce Commission will then assess whether any action must be taken. The actions that may be taken include:

• issuing a compliance advice letter or warning letter;
• applying for an injunction to the High Court;
• issuing court proceedings (in which criminal and/or civil action can be taken under the FTA); or
• negotiating settlements.

There are fines for breaching the FTA, the maximum fine being NZ$600,000.

Alternatively, consumers may report that an ad is misleading to the Advertising Standards Complaints Board (ASCB), which may then decide to undertake a formal review of the ad.

4.2 If an ad is found to be misleading, what are the consequences for the advertiser?

If there is a claim that advertising is misleading under the FTA, a fine of up to NZ$600,000 (per offence) may be imposed on a company. Where a complaint is upheld under the Advertising Standards Authority (ASA) complaints system, the advertiser will often be required to remove the ad.

4.3 Can the advertiser appeal the decision? If so, what is the process for doing so?

In New Zealand, claims under the FTA will be heard in the District Court or the High Court. Claims can be brought in the High Court only where the amount disputed is above NZ$350,000. A decision of the District Court can be appealed to the High Court, and a decision of the High Court can be appealed to the Court of Appeal, and then to the Supreme Court.

A decision of the ASCB or a ruling of the chair of the ASCB can be appealed to the Advertising Standards Complaints Appeal Board (ASCAB). Only a party to the decision can appeal. A party intending to appeal must:

• notify the ASA within 14 days of receiving the initial written decision; and
• subsequently submit a substantive appeal application to the ASCAB detailing:
• • the grounds on which the decision is being appealed; and
  • the reasoning for appealing the decision on those grounds.

There are five grounds for appeal, as follows:

• Proper procedures were not followed;
• There is new evidence of sufficient substance to affect the decision;
• Evidence provided to the ASCB was misinterpreted in a way that affected the decision;
• The decision is against the weight of the evidence; or
• It would be in the interests of natural justice if the matter were to be reheard.

The chairperson of the ASCAB will review and approve all appeal applications. If the application meets one of the appeal grounds above, the appeals process with the ASCAB will proceed.

5 Specific advertising regimes

5.1 What rules and requirements apply to the following types of advertising in your jurisdiction, and what best practices should be considered in each case? (a) Comparative advertising; (b) Promotional marketing (eg, competitions, lotteries and sweepstakes); (c) Interest-based advertising (ie, tailored advertising based on data collected from internet browsing); (d) Native advertising; (e) Influencer advertising; (f) Ambush marketing; (g) Country-of-origin marketing; and (h) Green marketing.

(a) Comparative advertising

There is scope for comparative advertising in New Zealand law. However, advertisers must exercise caution when using these marketing techniques. These types of ads come under heightened scrutiny from competitors, which are more inclined to report them to the regulators where appropriate.

Where comparative advertising is used, the Advertising Standards Authority (ASA) Code for Comparative Advertising states that it must:

• be accurate and informative;
• make clear the nature of the comparison; and
• not mislead or deceive the consumer.

(b) Promotional marketing (eg, competitions, lotteries and sweepstakes)

In New Zealand, promotional marketing is governed by the Gambling Act 2003.

'Gambling' under the Gambling Act 2003 is broadly defined and includes paying or staking consideration, directly or indirectly, on the outcome of something seeking to win money when the outcome depends wholly or partly on chance. This definition includes sales promotion schemes. The term 'consideration' can be read broadly and may extend beyond monetary consideration. If no consideration is required to enter the competition, lottery or sweepstake, it will be permitted (as it falls outside the scope of the Gambling Act 2003).

A 'sales promotion scheme' is a permitted form of gambling under the Gambling Act 2003. The criteria for sales promotions schemes are as follows:

• It is used by a creator, distributor or vendor of goods or services to provide goods or services they ordinarily provide;
• Participation requires a person to purchase the goods or services for a price not exceeding their usual retail price;
• There is no additional cost to enter the competition other than the normal price of the goods and services;
• The date on which or the period within which the outcome will be determined is clear to participants at the time and place of sale;
• The prize winners are determined wholly or partly by chance;
• The promoter does not use a gaming machine and the prize is not prohibited or restricted.

Sales promotion schemes have received additional intention in New Zealand recently for parties that have sought to exploit them. Additional requirements apply where sales promotion schemes are conducted from overseas, online, or otherwise via a remote interactive device.

Where promotions are permitted by the Gambling Act 2003, they must be run in accordance with New Zealand law – for example, they must not be misleading or deceptive to consumers in accordance with the Fair Trading Act (FTA).

(c) Interest-based advertising (ie, tailored advertising based on data collected from internet browsing)

The Privacy Act 2020 governs the collection of personal information. Where personal information has been collected, the person or entity collecting the information must use the information only for the purpose for which it has been collected. The person or entity collecting the information must also make clear to the data subject the purpose for which the information is being collected for. There are some limited exceptions where information may be used outside of the purpose for which it was collected.

(d) Native advertising

Advertising must be:

• clearly identified as such; and
• readily recognisable by its audience as advertising.

If this is not immediately clear from the ad and its placement, identifiers are required. This becomes important where influencers advertise products or services on their social media platforms.

(e) Influencer advertising

The ASA has issued guidelines on influencer advertising and indicated that the term 'influencer' is used to describe a person with influence over the choices, opinions and behaviours of his or her followers.

An influencer's content will be considered 'ad content' if:

• the content is controlled directly/indirectly by an advertiser to promote a product; and
• there is some form of commercial benefit to the influencer (eg, money, free products or services).

All ad content is subject to the principles and rules of the ASA codes. The influencer's organic content is not subject to the ASA codes.

Where the influencer receives no commercial incentive and there is no apparent commercial association with an advertiser (eg, if he or she purchased the product independently or received it as a gift from a friend), it is unlikely that any post or content will be seen as advertising content and it will not be subject to the ASA codes.

Influencers must declare a commercial relationship between themselves and the brand they are promoting. All ad content must be identified as such. It must be obvious to consumers on their first interaction with the content whether it is an ad. The consumer should not need to spend time figuring out whether an influencer's content is an ad. The ASA has recommended that:

• labels such as 'ad, 'advert' or 'advertisement' be used in ads; and
• the label:
• • be placed in a prominent place; and
  • be separate from other labels and hashtags.

(f) Ambush marketing

The Major Events Management Act 2007 affords some level of protection to event organisers and sponsors in relation to investments that a sponsor makes in a major event.

Event organisers can apply to have their event declared a 'major event' in order to benefit from the protections of the act in respect of ambush marketing by association and introduction. Ambush marketing by association occurs when an advertiser (which is not a sponsor of the event) misleads the public into thinking that it is associated with the event.

(g) Country-of-origin marketing

Under the Consumer Information Standards (Origin of Food) Regulations 2021, the origin information of certain regulated food items (eg, fruits, vegetables, fish and seafood and meat) must be disclosed. The information must include the country or countries in which the food was grown, raised, caught or harvested – the city, state or region will be insufficient. This information must be in clear and legible text, in English or Te Reo Maori. The information must be clearly displayed in relation to the food item. This means the information must be displayed on:

• the packaging;
• a label; or
• a sign next to the item.

Where products are advertised through a mailer or TV ad, the origin information must be included in the ad.

(h) Green marketing

The ASC has specific rules on green marketing. Rule 2(h) provides that environmental claims must be accurate and able to be substantiated by evidence that reflects the scientific and technological developments. 'Environmental claims' are any statement, symbol or graphic that indicates an environmental aspect of a service, product, component or packaging – for example, references to:

• sustainability;
• recyclability;
• carbon neutrality; or
• impact on animals or the natural environment.

The ASC has issued the following guidelines on environmental claims:

• Absolute environmental claims – such as 'environmentally friendly', 'safe' or 'kind' – will be assessed based on the complete lifecycle of the product and its packaging.
• Qualified claims – such as 'environmentally friendlier', 'safer' or 'kinder' – must prove that the product:
• • has a meaningful environmental advantage over competing products; or
  • makes a meaningful improvement on previous packaging, formulations, components, methods of manufacture or operations.
• Environmental benefit claims must:
• • be genuine; and
  • meet relevant local and international standards, as appropriate for the relevant claim (eg, 'biodegradable' or 'organic').
• Environmental claims based on the absence of a damaging effect or harmful chemical can be made only if other products in the market cause that effect or contain that chemical.

Additionally, the FTA prohibits unsubstantiated representations in trade. The Commerce Commission (the regulator responsible for enforcing the FTA) has released guidance regarding environmental claims, advising that they must:

• be truthful, accurate and specific;
• be substantiated;
• use plain language;
• not exaggerate;
• exercise caution when relying on tests or surveys; and
• consider the overall impression.

6 Direct marketing

6.1 What rules and requirements apply to the following types of direct marketing in your jurisdiction, and what best practices should be considered in each case? (a) Telemarketing; (b) Email marketing; (c) Direct mailings; and (d) Opt-out marketing.

All ads that involve the use of personal information should comply with the Privacy Act 2020.

(a) Telemarketing

Telemarketing is regulated by:

• the Fair Trading Act (FTA);
• the Code of Practice for Direct Marketing; and
• the Telemarking Code of Practice.

Under the FTA, telemarketers must:

• provide consumers with a clear, legible, written sales agreement in the prescribed form within five working days of making a sale via telephone; and
• inform consumers of their right to cancel within five working days of receiving the written agreement.

Failure to meet these requirements may result in:

• the award of compensation to the aggrieved consumer; and
• the imposition of fines of up to $30,000 per offence.

Among other requirements, the Code of Practice for Direct Marketing and the Telemarketing Code of Practice both emphasise:

• social responsibility;
• truthful presentation; and
• high standards of business practice.

A do-not-call register is also maintained by the Marketing Association, which lists the details of consumers who have requested to not receive unsolicited telephone calls.

(b) Email marketing

The Unsolicited Electronic Messages Act 2007:

• applies to all kinds of electronic messages; and
• prohibits commercial emails being sent without the receiver's consent.

A 'commercial email' includes any email sent for the purpose of marketing or advertising. In certain circumstances, consent may be inferred. For example, if a person publicly lists his or her email address on a business website without a statement that he or she does not wish to receive unsolicited electronic messages, an advertiser may send that person an unsolicited commercial email if it is relevant to his or her business.

Emails that are consented to must include:

• accurate information about the sender; and
• a functional unsubscribe mechanism.

The Department of Internal Affairs' Digital Messaging and Systems Team enforces the act and may:

• issue warnings and infringement notices; and
• take court action.

Advertisers that are found to be in breach of the act may be fined up to NZ$500,000.

(c) Direct mailings

The Marketing Association has published a National Code of Practice for the Distribution of Unaddressed Mail. Under the code, advertisers may not leave unaddressed mail:

• in a letterbox that has a sign indicating 'addressed mail only', 'no junk mail' or similar; or
• on vehicles parked in public places or at any of the other specified locations.

Like the do-not-call register, the Marketing Association also maintains a do-not-mail register, which lists the details of consumers who have requested to not receive unsolicited mail.

(d) Opt-out marketing

Under the Unsolicited Electronic Messages Act 2007, once consent to send a commercial electronic message has been received, several requirements must be met. For example, a functional unsubscribe mechanism must be included in any message. For emails, this means that an unsubscribe button should be placed somewhere in the email, which operates to prevent future emails being sent to that address.

7 Indirect marketing

7.1 What rules and requirements apply to the following types of marketing in your jurisdiction, and what best practices should be considered in each case? (a) Product placement; (b) Sponsorship; and (c) Loyalty programmes.

(a) Product placement

Under the Advertising Standards Authority's (ASA) general Advertising Standards Code (ASC), ads must be identified as such. This also applies to product placements and identifiers may be required if the nature of a placement does not make it clear that it is an ad. As per the ASA's Children and Young People's Code, and the new Food and Beverage Code, advertisers must not place occasional food or beverage products in any media where children are expected to comprise a significant portion of the audience, or where children are otherwise targeted.

(b) Sponsorship

The ASA has published an Alcohol Advertising and Promotion Code which, among other things, restricts alcohol sponsorships. Some of these restrictions include the following:

• Adults must comprise at least 80% of the estimated spectators or participants in a sponsored activity.
• Alcohol branding may not be placed on children's-sized clothing or accessories.
• Alcohol sponsorship must only feature in a subordinate manner, such that the advertiser's name and logo must only orally or visually feature in 15% of the available space or time.

Sponsorships must also be legitimate, as ambush marketing is prohibited by the Major Events Management Act 2007. Advertisers may not:

• attempt to create a non-existent association with an event; or
• advertise within an identified clean zone around an event venue without prior authorisation from the event's organisers.

As with product placements, sponsorships and product endorsements must be identified as paid advertising. Under the ASA's Therapeutic and Health Advertising Code, advertisers must not claim that a health product is endorsed by a government agency, professional body or independent agency unless a specific exception applies. As for ads for financial products, sponsorships and endorsements must not be misrepresented to consumers.

(c) Loyalty programmes

Loyalty programmes are a common form of advertising in New Zealand. Visa suggests that 97% of New Zealanders are members of a loyalty programme. Aside from general restrictions contained in the Fair Trading Act and the ASA codes, such as those prohibiting misleading ads, several restrictions may apply specifically to loyalty programmes.

According to the ASA's general ASC, ads that promote a loyalty programme must not encourage repeat purchases of foods that are high in fat, salt or sugar.

Under the Fuel Industry Regulations 2022, fuel importers must record and retain prescribed information relating to any loyalty programmes they run. This information must then be disclosed to the Commerce Commission every year.

8 Industry-specific regimes

8.1 What regulatory regimes apply to advertising in the following industries in your jurisdiction, and what best practices would you highlight? (a) Gambling (including lotteries); (b) Alcohol; (c) Tobacco; (d) E-cigarettes; (e) Pharmaceuticals (prescription and over-the-counter); (f) Therapeutic products (ie, products which claim to have health benefits but which are not medicines or pharmaceuticals, such as vitamin supplements); (g) Food; and (h) Financial products and services.

All ads are regulated by the general requirements of the Fair Trading Act (FTA), alongside industry-specific statutes and Advertising Standards Authority (ASA) codes.

(a) Gambling (including lotteries)

All forms of gambling (except where no consideration is required for entry) are governed by the Gambling Act 2003. The act prohibits the promotion of gambling which is conducted overseas. It is also considered an offence to advertise gambling which is otherwise illegal under the act, which may expose an advertiser to a fine of up to NZ$50,000.

The ASA has also published a Gambling Advertising Code aimed at minimising gambling-related harm. The code requires gambling ads to:

• be truthful;
• target adults; and
• not encourage activity that may result in gambling-related harm.

(b) Alcohol

The alcohol industry is regulated by the Sale and Supply of Alcohol Act 2012. Advertisers may not, among other things:

• encourage excessive consumption;
• promote discounts of more than 25%; or
• offer sales promotions through the purchase of alcohol.

The ASA has also published the Alcohol Advertising and Promotion Code, aimed at ensuring that advertisers uphold principles of social responsibility. The code contains nine requirements, including that ads must:

• target adult audiences;
• demonstrate low-risk consumption; and
• be truthful.

(c) Tobacco

The advertising of tobacco products is strictly prohibited by the Smoke Free Environments Act 1990, which also bars the use of branding on packaging. Tobacco products cannot be displayed at a point of sale or publicised through most forms of sponsorship.

(d) E-cigarettes

Since a 2020 amendment to the Smoke Free Environments Act 1990 came into effect, advertisers have been prohibited from advertising most vaping products, including e-cigarettes. Most of the restrictions on advertising are the same or similar to restrictions on tobacco advertising

(e) Pharmaceuticals (prescription and over-the-counter)

The advertising of medicines, including prescription and over-the-counter medicines, is permitted and regulated by:

• the Medicines Act 1981;
• the Medicines Regulations 1984; and
• the Misuse of Drugs Regulations 1977.

The Medicines Act 1981 and its regulations contain a relatively large number of restrictions, including that medical ads must:

• not include testimonials;
• not be false or misleading; and
• contain prescribed information.

The ASA has issued a Therapeutic and Health Advertising Code which covers the advertising of pharmaceuticals and therapeutic products. The code provides that ads must contain mandatory information, including several required statements. The code also prescribes that, among other things, ads for medical or therapeutic products and services cannot claim they are:

• safe;
• always effective; or
• guaranteed to cure anything.

(f) Therapeutic products (ie, products which claim to have health benefits but which are not medicines or pharmaceuticals, such as vitamin supplements)

Therapeutic products are similarly regulated under the Medicines Act 1981 and several other regulations, alongside the ASA's Therapeutic and Health Advertising Code. Under the Medicines Act 1981:

• a 'medical ad' is an ad relating to a medicine, medical device or method of treatment;
• a 'medicine' is broadly considered to be a product intended for use on human beings with therapeutic purpose; and
• a 'method of treatment' includes any method undertaken for a therapeutic purpose.

(g) Food

The advertising of food and beverage is governed by the Food Act 2014. The act:

• sets out specific information that must be included on products and in ads; and
• generally requires that ads be truthful.

If advertisers publish a non-compliant ad, they may be subject to fines of up to NZ$250,000 regardless of their intention to commit an offence.

The ASA's Children and Young People's Advertising Code restricts the advertising of occasional (generally unhealthy) food and beverages to people under the age of 18. For example, ads for occasional food products must not:

• target young people; or
• imply that these products are suitable for daily consumption.

The ASA have also recently published the Children's Advertising Code and Food and Beverage Advertising Code, which will replace the existing Children and Young People's Advertising Code. Both new codes will apply to newly introduced ads from 1 August 2024, and all ads from 1 November 2024.

The new Food and Beverage Advertising Code will apply to most kinds of food and beverage advertising in all media, and will capture all consumable food and beverage products other than alcohol. The Code will only apply restrictions to ads targeting children where those ads target individuals under the age of 16.

(h) Financial products and services

The advertising of financial products and services is regulated by:

• the Financial Markets Conduct Act 2013; and
• the Credit Contracts and Consumer Finance Act 2003.

Subject to certain exceptions, advertisers that offer financial products must generally:

• publish comprehensive product disclosure statements; and
• uphold their ongoing disclosure obligations to:
• • investors;
  • the public; and
  • other prescribed persons.

Lenders must also comply with prescribed responsibility principles when advertising their services.

In addition, the ASA has published the Financial Advertising Code. The code is intended to:

• protect non-expert consumers; and
• ensure that financial ads are honest and truthful.

9 Enforcement

9.1 On what grounds can the following parties take action against ads in your jurisdiction? (a) Competitors; (b) Consumer associations; and (c) Members of the public.

(a) Competitors

Competitors may take certain action if an advertiser has breached the Fair Trading Act (FTA), even if the competitor has not suffered harm from the alleged conduct. This means that competitors may seek specific remedies, such as interim injunctions.

Alternatively, a competitor may make a complaint to the Commerce Commission, which will then take action against the alleged offender. Competitors may also raise a complaint with the Advertising Standards Authority (ASA) if they believe that a competitor has breached one of the ASA codes.

(b) Consumer associations

Individuals may make a complaint to the ASA on behalf of consumer associations without the need to pay a fee. Alternatively, consumer associations may:

• take action under the FTA; or
• raise a complaint with the Commerce Commission in the same way as a competitor might.

(c) Members of the public

Consumers may take action in the same way a consumer association or competitor, even if they have not suffered any direct harm themselves. Consumers may also make a claim for damages if they have suffered harm as a result of the alleged FTA breach.

Additionally, consumers may complain to:

• the Commerce Commission that an advertiser has breached the FTA; or
• the ASA that an advertiser has breached an ASA code.

9.2 What mechanisms are available to them to do so, and what are the pros and cons of each?

Direct action under the FTA: The primary advantage of commencing a proceeding under the FTA is that it provides for a relatively wide variety of remedies. For example, if a competitor's ad needs to be taken down urgently, an interim injunction may be sought. However, court proceedings can be costly and many aggrieved individuals may not have the resources to pursue a direct action against the offending advertiser.

Commerce Commission complaint: Anyone can make a complaint to the Commerce Commission that an advertiser has breached the FTA. If the commission finds merit in a complaint, it will investigate. Depending on the extent of the harm, the seriousness of the conduct and the public interest in the matter, the commission may take enforcement action following an investigation. Enforcement action may include:

• commencing a proceeding against the offending advertiser; or
• issuing it with a warning.

The disadvantage of this process is the time it may take before a definitive outcome is reached.

ASA complaint: Once the ASA receives a complaint, it will review the complaint accordingly. If the ASA accepts a complaint following the review process, it may refer the parties to the Advertising Standards Complaints Board (ASCB). The ASCB, comprised of five elected members of the public and four industry participants, will then conduct an internal adjudication. If the ad is found to be in breach of any of the ASA codes, the complaint will be upheld and the offending advertiser will be requested to withdraw the ad. Although compliance is voluntary, the ASA commonly reports compliance rates of over 95%.

9.3 How does the procedure typically unfold and how long does it take?

Direct action under the FTA: Commencing a proceeding under the FTA takes the same form as the commencement of any other court proceeding. The proceeding may take several years, depending on:

• the kind of proceeding commenced;
• the complexity of the case; and
• how busy the courts are.

An application for interim injunction to take down an ad may be heard earlier due to its urgency.

Commerce Commission complaint: There is no set timeframe for the processing of Commerce Commission complaints. Depending on the seriousness of the complaint, the commission has complete discretion when considering enforcement action. If it chooses to commence a court proceeding, it may take longer than a direct proceeding until a definitive outcome is reached.

ASA complaint: The ASA complaints process is relatively quick, especially when compared to the other two options. While there is no set timeframe, ASA suggest that most complaints are handled within two to three weeks.

9.4 What costs are incurred?

Direct action under the FTA: Taking direct action against an advertiser may involve significant legal costs, which are highly dependent on the complexity of the alleged breach.

Commerce Commission complaint: Making a complaint to the Commerce Commission involves no cost beyond preparing the complaint, as the complainant may not be involved in the enforcement process past this stage.

ASA complaint: Unless a company is making a complaint about a competitor, an ASA complaint involves no cost. A competitor complaint may cost between NZ$3,000 and NZ$15,000 if it results in the ASA taking action.

9.5 What defences are typically raised by the advertiser?

Defences are highly dependent on the alleged breach. For example, an offending advertiser may claim that a reasonable person would not be misled by the ad in response to a claim that it has breached Section 9 of the FTA.

ASA complaints that proceed to the ASCB are often settled before a substantive decision is made. If a complaint is heard by the ASCB, the decision will be highly fact specific and will be confined to whether the ad has breached a specific code.

9.6 What remedies are available?

Direct action under the FTA: An advertiser may be subject to a fine of up to NZ$600,000 per breach of the FTA. Injunctive relief, damages and declarations may also be awarded to a successful plaintiff.

Commerce Commission complaint: If successful in showing an advertiser has breached the FTA, the offending advertiser may be subject to the same or similar remedies as for a direct action. For example, the Commerce Commission recently fined New Zealand telecommunications company One NZ $3.675 million for a misleading advertising campaign. Outside of court, the Commerce Commission may send compliance advice or a warning letter to the offending advertiser.

ASA complaint: If an ad is found to be in breach of one of the ASA codes, the advertiser will be asked to withdraw the ad. Although compliance is voluntary, most advertisers will comply.

9.7 Can the decision be appealed? If so, what is the process for doing so?

Direct action under the FTA: Unsuccessful parties may appeal a judgment to the relevant appellate court.

Commerce Commission complaint: Decisions of the Commerce Commission can be appealed to the High Court.

ASA complaint: Parties may appeal complaints board decisions on one of five grounds of appeal, and within 14 days of receiving a written decision. For example, a decision may be appealed to the Appeal Board if:

• procedure has not been followed correctly;
• new evidence has surfaced; or
• it is in the interests of natural justice for the matter to be reheard.

10 Trends and predictions

10.1 How would you describe the current advertising landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The Advertising Standards Authority (ASA) is committed to ensuring that all ASA codes are fit for purpose. Accordingly, every five years the ASA codes are reviewed. As part of its reviews, the ASA invites submissions from:

• the public;
• various organisations; and
• field experts.

The ASA commenced its five-yearly review of the Children and Young People's Advertising Code in July 2022. As part of this review, it identified the wide scope of food and beverage advertising. Accordingly, it was decided that a separate code was needed to regulate food and beverage advertising.

In 2023, the ASA released draft versions of the new Food and Beverage Code and the Children's Advertising Code (which amended the previous Children and Young People's Advertising Code). Public consultation on these draft codes closed in mid-2023 and we expect that these codes will be released in 2024.

In 2024, the ASA have published final versions of the Food and Beverage Code and the Children's Advertising Code. Both codes will apply to newly introduced ads from 1 August 2024, and all ads from 1 November 2024.

The ASC came into effect in November 2018. Given its commitment to reviewing the ASA Codes on a five-yearly basis, we would expect that the ASA will undertake a full review of this code soon.

11 Tips and traps

11.1 What are your top tips for companies that advertise their products and services in your jurisdiction and what potential sticking points would you highlight?

In New Zealand, it is key to ensure that ads do not mislead or deceive consumers. To avoid their ads being misleading, advertisers should ensure the following:

• All claims must be capable of being substantiated at the time of publication of the ad;
• Fine print must not be used to correct misleading headlines;
• Ads must not exaggerate the benefits of a product or service; and
• Claims must not be vague.

It is important that advertisers consider the overall impression of their ads when assessing whether they are likely to mislead or deceive consumers.

All ad should be presented truthfully and exercise a sense of responsibility in the context of the New Zealand market.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.