Welcome to the latest Ads & Brands Law Monthly Newsletter. We cover legal and regulatory developments from the last few weeks relevant to advertising, marketing and brand-owning businesses.
Advertising and regulatory developments
ASA issues reminder about joint partnerships on Instagram clearly identifying ad
The Advertising Standards Authority has published an article on joint partnerships on Instagram. The article talks about its rationale for a ruling about complaints made against ads from TALA, an active wear company owned by Grace Beverley. Beverley published four TikToks and jointly published two Instagram reels with TALA. The ASA upheld complaints and said they were not obviously identifiable as ads.
The decision attracted some criticism from commentators. The ASA has explained that the joint publishing feature on Instagram allows two accounts to simultaneously post the same content. This means that brands and influencers can seamlessly combine editorial and advertising into streamlined content for multiple audiences. Therefore, the lines between editorial and advertising are blurred and viewers don't know immediately that they are looking at an ad.
In addition, the ASA highlighted that both the influencer and the brand are responsible for clearly stating the ad is an ad and making it identifiable as an ad. The onus is not on the public to work out if social media content is advertising or not. The ASA also explained different scenarios according to context where an ad could be deemed obviously identifiable without adding any extra 'ad' label.
Vinted agrees to make (some) consumer protection commitments
Vinted has agreed to enhance consumer protection by making several changes to its platform following EU complaints. These include clearly informing consumers about total prices, including the "buyer protection fee", removing misleading advertisements, and providing better guidance on refunds and counterfeit claims. Vinted also improved transparency on identity verification for sellers and review policies. However, Vinted disagreed about informing consumers about delivery fees upfront and faces potential enforcement if issues persist. Ongoing legal proceedings in some EU states will continue independently of these commitments.
CMA consults on guidance for trader recommendation sites
The CMA is consulting on new guidance for trader recommendation sites to address consumer protection issues. Key concerns include misleading claims about trader reliability, inadequate vetting processes, poor handling of complaints, and the presence of fake reviews.
The guidance advises these sites to ensure accuracy in their claims, implement proper checks on traders, and establish transparent complaint procedures. The consultation was due to end on 16 August 2024, after which final advice will be issued.
CMA issues update in Wowcher "dark patterns" investigation
The CMA has updated its investigation into Wowcher's use of "dark patterns," specifically regarding misleading urgency claims and pre-ticked boxes for VIP memberships.
Wowcher has agreed to use accurate countdown timers, ensure truthful marketing claims about product availability and demand, and provide over £4 million in refunds to customers who signed up to VIP membership via pre-ticked boxes without understanding what they were signing up to. Wowcher will also remove its permanent homepage countdown timer and cease using pre-ticked boxes.
The CMA will monitor Wowcher's compliance over the next year.
Welsh Government consults on HFSS advertising restrictions
The Welsh government is seeking feedback on draft regulations for restricting the marketing of foods high in fat, sugar, and/or salt. The regulations propose location restrictions in stores and online, volume price promotion restrictions, and free refill restrictions. Enforcement will focus on compliance, with local authorities overseeing the regulations.
Additionally, the Welsh government is gathering evidence on children's consumption of energy drinks, following mixed responses to a proposed sales restriction.
Ofcom finalises policy on mid-contract price rises
Ofcom has banned mid-contract price rises linked to inflation for phone, broadband, and pay TV services. Providers must now set out any in-contract price rises in fixed amounts upfront at the point of sale, rather than using inflation-linked or percentage-based increases. This aims to provide consumers with greater clarity and certainty about the prices they will pay. The new rules take effect from 17 January 2025. Ofcom has published guidance to help providers comply, with the aim of ensuring that price rise information is clear and comprehensible.
The ASA has also published a statement on the new guidelines.
In addition, also on the subject of telecoms advertising, CAP has issued a reminder about speed claims in broadband advertising.
ASA publishes guidance on use of AI as marketing term
The ASA has issued guidance on the use of AI in marketing. Marketers should avoid falsely claiming AI capabilities, exaggerating AI features, and making unsupported comparative claims. The ASA says that it is essential to provide clear, accurate information about AI functionalities and ensure any claims are substantiated with evidence. Marketers are also responsible for complying with advertising codes and cannot deflect responsibility to third-party developers for misleading claims.
CMA issues update in Simba Sleep investigation
The CMA recently announced that Simba Sleep Limited has signed undertakings in relation to its online selling practices. The undertakings commit Simba to, among other things, an agreed set of rules around the use of discount claims and urgency claims (such as countdown clocks).
In addition, the CMA has issued new guidance for retailers selling mattresses online regarding reference pricing. Although it is aimed at a specific market, the principles it contains will be useful for any online retailers wanting to ensure that their websites and customer journeys remain on the right side of the line considering the CMA's forthcoming powers in the new Digital Markets, Competition and Consumers Act.
King's Speech – what's coming for advertising?
The King's Speech 2024 outlined the Labour government's plans for over 35 new Bills aimed at improving living standards through economic growth and investment in technology.
Among other things, the government plans to regulate tobacco, vapes, and junk food advertising. We will keep you posted!
EHRC updates guidance on discriminatory advertisements
The EHRC has updated its guidance on discriminatory advertisements. It reminds advertisers that placing or publishing a discriminatory advert is unlawful under the Equality Act 2010.
A discriminatory advert is an advert which restricts jobs, goods, facilities or services to people with protected characteristics, such as to men or to people in a particular age group. They are unlawful except in very limited circumstances where the Act allows such a restriction if it can be objectively justified.
Any part of an advert could be discriminatory. For example, descriptors, job titles, illustrations and pictures which relate to particular protected characteristics may be discriminatory as they may imply that only people with those characteristics are eligible for the job or service being advertised.
European Commission evaluates Modernisation Directive
The European Commission has issued a report which evaluates the Modernisation Directive, which came into force on 28 May 2022. The Directive aimed to enhance enforcement of consumer protection laws and adapt them to the digital era. While most provisions were smoothly integrated into national laws, some complexities remain, particularly regarding penalties and remedies for unfair practices. Positive signs show strengthened consumer protection, but issues like price promotions, fake reviews, and transparency in online markets need further attention. The report will inform future EU consumer law updates.
Trade marks developments
Court of Appeal confirms relevance of a "crowded market" for assessing trade mark distinctiveness (and potential for confusion)
When choosing a trade mark, or going to court to resolve a dispute over similar trade marks, it might seem common sense that if there are lots of businesses all using similar marks for similar goods or services then the likelihood of one of those similar marks really standing out for consumers (or being strongly "distinctive" in legal terms) will be reduced. But this common sense viewpoint has now been given legal weight by the Court of Appeal, which has confirmed that the existence of a "crowded market" of similar marks can be taken into account in infringement litigation, when deciding how distinctive the claimant's mark really is.
The judgment was made in the context of a long-running dispute between the owners of the Beverly Hills Polo Club marks on the one hand and the Royal County of Berkshire Polo Club on the other (a real polo club), Beverly Hills claiming that Berkshire had infringed its marks. To show infringement under section 10(2) of the Trade Marks Act (or its EU equivalents) it is necessary to persuade the court that without the proprietor's consent the defendant is using an identical or similar mark on identical or similar goods or services, and that there is a resulting likelihood of confusion on the part of the public (i.e. consumers). In this case there was little dispute that the Beverly Hills and Berkshire marks related to the same type of goods (clothing, footware, fragrances, luggage and watches) and that the marks had similarities (the words "polo club" but also a figurative element of a polo player on horseback with mallet raised). The marks were far from being identical, however, and so in deciding whether there was a "likelihood of confusion", the court had to take account of all relevant factors through the eyes of an average consumer.
This was where the relevance of the "crowded market" came into play, as the Court of Appeal confirmed that it was objectively true that there were plenty of other (third party) players in the market for goods with "polo club" branding, not least Polo by Ralph Loren and the US Polo Association. This was relevant in the context of deciding whether there was a "likelihood of confusion" between the Beverly Hills and the Berkshire marks in particular, as the effect of the crowded market would be that the Beverly Hills trade marks would in practice be less distinctive to consumers than if there were just two "polo club" brands at play. Beverly Hills had argued that this information about the surrounding market conditions wasn't relevant to its particular dispute with Berkshire Polo Club, but the Court of Appeal disagreed.
The judgment clearly reinforces the "common sense" approach when choosing a trade mark, to avoid unnecessary similarities (in wording or figurative elements) to existing brands providing similar goods and services. But it also clarifies for brand-owners who already find themselves operating in a "crowded market" of similar brands for similar goods or services (or for new entrants in such a market) that distinctiveness – and likelihood of confusion – may be correspondingly reduced.
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.