Silence doesn't always prove to be golden, especially in the Advertising Standards Authority's (ASA) eyes, as evidenced by the recent publication of details of two upheld adjudications after the advertisers failed to respond to the ASA's enquiries. Not playing ball is an outright breach of CAP code rule 1.7 which states:
"Any unreasonable delay in responding to the ASA’s enquiries will normally be considered a breach of the Code."
Advertisers failing to respond to the ASA is not unusual. Some 160 have not answered the ASA's calls for substantiation since July 2011. When looking in detail at those adjudications, there is a common theme which, perhaps unsurprisingly, shows that it is generally smaller and often less reputable businesses that do not cooperate.
However, as a self-regulatory body set up by the industry to police itself, many small businesses know little about the ASA or the Advertising Codes it administers, despite the fact that every marketer in the UK is bound to comply with them. Indeed, many do not understand its remit or the sanctions they face in the event of non-compliance. For those that do, the ASA's principle deterrent is the publication of an upheld decision on its website. Many may view this as an acceptable risk. However, businesses should never underestimate the power of brand reputational damage, which is a particular concern, as weekly adjudications are released to press under embargo prior to publication and can be widely reported on. For example, its decision to uphold a complaint against GlaxoSmithKline's advertisement which claimed Lucozade hydrates better than water received significant press coverage. Such instances are particularly treacherous waters for larger corporations, where a drop in public confidence may have an adverse effect on share price. The solution? Best to stay in the ASA's good books!
By comparison, many smaller businesses may view the publication of an upheld decision as trivial, especially when placed alongside the strict penalties faced for not complying with other regulatory obligations such as financial, data protection and health and safety. Therefore, it is no surprise that many business and consumers view the ASA as being toothless and do not take it seriously, given its perceived lack of power to fine and/or prosecute.
So, what lengths do the ASA go to in ensuring compliance if an adjudication does not have the desired impact and what are the ramifications for businesses that show no willingness to comply with the UK Advertising Codes?
The Committee of Advertising Practice (CAP) is the industry facing side of the ASA tasked with writing the Codes. Its compliance function pro-actively monitors television, radio, internet and press advertisements and will take up complaints directly with advertisers and seek assurance that non-compliant ads will be amended or removed. They also carry out sector wide projects when there is evidence of widespread non-compliance within an industry. Most recently they took extensive action to ensure advertisers of homeopathic remedies were not making unfounded health claims by liaising with the industry trade body. They also worked closely with the British Hospitality Association in 2012 to resolve the issue of hotel websites targeting consumers with VAT exclusive prices, a practice prohibited by the Code if an ad's audience is not primarily businesses.
If there is evidence of repeated non-compliance, CAP will consider cases individually and take action depending on the number, nature and severity of the Code breaches. Repeat offender action includes CAP seeking an undertaking that an advertiser will improve its compliance record generally. It may insist on meeting with businesses and requiring all future advertising to be pre-approved prior to publication for a set period of time.
If it fails in its efforts to gain assurance of compliance, CAP has several sanctions it can call upon. It can put out an ad alert to the press who are then obliged to contact CAP if they receive requests to publish ads for a particular advertiser and/or product. CAP also liaises with trade and industry bodies who can withdraw memberships and/or member privileges.
For poster advertising CAP can invoke mandatory pre-vetting for advertisers who breach the Code on grounds of harm and offence. Specifically in relation to online space CAP will add an advertiser to a list of non-compliant advertisers on its website which will subsequently feature high on search rankings potentially putting off interested consumers. CAP can also ask search engines to remove marketers' paid-for search ads if they link to a website carrying non-compliant claims.
Ultimately, the ASA and CAP are recognised by government as the established means for dealing with complaints about advertising. Indeed its Codes largely mirror consumer protection regulations. Under its new legal backstop regime CAP has the capacity to refer persistent non-compliant advertisers to Trading Standards (previously it used the Office of Fair Trading).
A referral by CAP to Trading Standards is significant, because it shows an advertiser's determined reluctance to comply. Trading Standards will investigate and if a breach of Consumer Protection Regulations is established, it will seek undertakings or even fine and/or prosecute. Notable referrals include Ryanair and Groupon, as well more recently two marketers of health supplements making spurious and potentially harmful health claims.
So, whilst the possibility of the ASA publishing an upheld adjudication might be sufficient to ensure the compliance of most advertisers, all businesses should be mindful of the measures the ASA has at its disposal. As has often proved the case, those businesses who pay little regard to their obligations under the UK advertising Codes can find themselves in deeper water than they might expect.