Welcome to the July 2022 edition of our Digest, covering legal and regulatory developments from the last few weeks relevant to advertising, marketing and brand-owning businesses. As usual, for each item we provide a succinct summary accompanied by a link to the full text of the relevant official source or our own report.
In this edition we report on the ASA's guidance on ensuring that children know that material is advertising, the ASA's enforcement update on debt management advertisements, the ASA's remit statement on gambling advertising, the ASA's statement on World Environment Day, the UK government's response to its data reform consultation, the EU's sweep of car rental websites, and an interesting case on copyright involving "Only Fools and Horses".
In this issue:
- Advertising and marketing
Advertising and marketing
ASA provides guidance on ensuring that children know that material is advertising
Both the CAP Code and consumer law stipulate that you must know when you are being advertised to. Unless it is already apparent from context, clear ad disclosure is important regardless of the age of the audience. It allows consumers to recognise the commercial intent behind the messaging of an ad and serves to differentiate it from editorial content.
However, when young children (under-12s) are the primary audience for an advertisement, it is important to consider whether more enhanced disclosure may be required. Enhanced disclosure should be prominent, interruptive, and sufficient to identify the marketer and the commercial intent of the ad.
ASA and CAP issue enforcement update on debt management ads
The ASA has published a new Enforcement Notice about debt management ads by insolvency practitioners and lead generation companies.
It highlights that the ASA has published several rulings about ads which offered consumers a way to write off debt in government approved schemes. These ads were not placed by FCA-authorised debt advisers but by lead generation companies or insolvency practitioners, and ultimately advertised services for individual voluntary arrangements (IVAs) (in England, Wales, NI) or protected trust deeds (PTDs) (in Scotland).
Ads targeted at consumers with debt problems have the potential to cause serious detriment if they do not comply with the advertising rules. Insolvency practitioners and lead generation companies which ultimately advertise an IVA/PTD service must be extremely careful to ensure their advertising is responsible and does not mislead.
From 25 July 2022, the CAP compliance team will take targeted enforcement action, which may include – where advertisers are unwilling to comply – referral to Trading Standards or an appropriate recognised professional body.
Advertising in social media spaces controlled by marketers have long been subject to the CAP Code; in particular, the dedicated rules that protect under-18s. The vast majority of 'content marketing' is effectively deemed by the ASA to "sell something" and is, therefore, regulated under the CAP Code.
The ASA says that the advertising of gambling products raises particular issues of consumer protection because of the potential for the products to be used in ways that are unwise or risky leading some people to experience gambling-related harms.
It highlights that although it is legitimate for operators to promote their services across a range of media channels and to audiences predominantly or exclusively made up of adults, marketing communications must comply with the rules in the CAP Code which aim to protect under-18s and other vulnerable groups.
To ensure nothing falls between the gaps, the ASA and the Gambling Commission have agreed that:
- The ASA will continue to consider complaints about social media ads brought to its attention on a case-by-case basis in line with its existing approach to remit decisions.
- In the limited scenarios where complaints about operators' social media are deemed not to be within remit, the ASA will refer them to the Gambling Commission.
- The Commission will consider provisions under its Licence Conditions and Codes of Practice, which sets out the rules for operators licensed to transact with consumers in Great Britain, and will consider taking action in line with its Statement of Licensing, Compliance and Enforcement policy.
The ASA has provided an update on the work it has undertaken in its Climate Change and the Environment project. Though the ASA has regulated environmental claims for many years, its last statement described the launch of a dedicated project for ads that touch on the environment. In addition to continuing to investigate ads, it committed to delivering three major outputs:
- CAP published dedicated advertising guidance to help the industry ensure that their ads don't mislead consumers or contain socially irresponsible messages about environmental issues;
- To commence a series of detailed reviews into the issues identified as priority areas by the Climate Change Committee for carbon reduction and consumer behaviour change. These involve reviewing claims being made in ads for heating/energy and transport in the first reviews, and then moving onto waste (looking at claims such as "biodegradable") and meat and dairy and plant-based substitutes at a later date;
- Commission research into consumer understanding of 'carbon neutral' and 'net zero' claims, as well as claims about 'hybrid' products in the electric vehicle market.
Going forward, the ASA and CAP plan to commission research into consumer understanding of "sustainable" and "eco-friendly" claims. These are commonly found in ads and the ASA has concerns that the claims may be ambiguous in some contexts. That research will also begin to lay the groundwork for its third issues-led review into waste claims such as "recyclable" and "biodegradable", and its fourth issues-led review into meat and dairy and plant-based substitute claims. It expects that research to be ready towards the end of 2022 by which time it hopes to begin an issues-led review of ad claims that relate to waste claims and before focusing on meat, dairy and plant-based substitute claims in 2023.
Government publishes response to data protection consultation
The current UK data protection regime consists of the UK General Data Protection Regulation (UK GDPR), the Privacy and Electronic Communications Regulations (PECR) and the Data Protection Act 2018 (DPA). The government issued a consultation in 2021, which presented proposals that build on the UK's current regime, such as its data processing principles, its data rights for citizens, and its mechanisms for supervision and enforcement.
Among other things, the government intends to find ways to limit what it says are unnecessary cookie banners by altering rules in the Privacy and Electronic Communications Regulations including the removal of consent requirements in relation to audience measurement cookies It also proposed a range of reforms to create an autonomous UK international transfers regime, which supports international trade and eliminates unnecessary obstacles to cross-border personal data flows.
55% of car rental brokers' websites screened violate EU law
The European Commission and national consumer protection authorities have published the results of an EU-wide website screening/sweep of brokering car rentals. Under the coordination of the Commission, authorities of ten Member States, together with Norway, checked 78 websites brokering car rentals, including airlines' websites, to check whether the major brokers operating in Europe comply with EU consumer protection rules.
Overall, only 45% of the websites comply with EU standards. In almost a third of the websites, it remained unclear if consumers need to contact the broker or the rental company in case of queries or complaints. Furthermore, 28% of them did not clearly mention the broker's company name and almost half did not clearly inform about what is included in the insurance. Authorities also found issues in relation to price information, such as incomplete information on mandatory charges (for example, young driver fees or one-way fees). The national authorities will contact the traders concerned to rectify their websites and, if necessary, initiate enforcement actions in line with their national procedures.
The sweep shows the importance of ensuring that websites comply with advertising and consumer laws.
IPEC breaks new ground in finding Del Boy character from "Only Fools and Horses" to be copyright protected as a literary work
While the courts in certain foreign jurisdictions have previously provided some copyright protection to very famous fictional characters, such as Sherlock Holmes (US) and Pippi Longstocking (Germany), the UK courts had not hitherto followed suit. In this country the underlying plot, situations and characters in works of fiction have tended to be seen as unprotectable "mere ideas", as opposed to the copyright-protectable "expression" of those ideas in the particular words of a novel, play or script. Following a recent judgment in the Intellectual Property & Enterprise Court (IPEC), however, this could all be set to change.
The point came up for consideration in proceedings - brought by the owners of copyright in the scripts that John Sullivan wrote for the famous TV Series "Only Fools and Horses" - against various individuals and companies involved in running an "Only Fools" Dining Experience. While the Dining Experience did not reproduce significant chunks of the existing Only Fools scripts, it did aim to faithfully represent the characters from the series, including many of their famous catch-phrases, in what effectively amounted to a new episode of the Series.
Applying the standard tests of copyright protectability under the case-law of the EU Court of Justice (which is still relevant post-Brexit), the judge found that the character of "Del Boy" was both original, in the sense of being the expressed original intellectual creation of script-writer John Sullivan, and also sufficiently clearly and precisely identifiable to be protected. He also found that the Del Boy character could slot comfortably into the UK "closed list" of categories of copyright works as a literary work (although one would have thought, as it was a character created in a dramatic work, i.e. a TV script, that the Del Boy character itself could have been deemed to be a dramatic work).
While there are other IP rights that can provide some protection for fictional characters and fictional worlds, for example through trade marks and passing off, this judgment potentially greatly strengthens the hands of the creators of such characters and worlds in the future. Rather than just literal copying of passages of words and spaces, it is now open to argue a case based upon the copying of character, back story, catch-phrases and other aspects of a fictional "world", provided the author has developed them in a sufficiently precise and detailed form. As the Defendants in this case had previously run a "Faulty Towers Dining Experience", one wonders whether John Cleese and Connie Booth might be considering their legal options.
IPEC provides clarification on parody and pastiche defences to copyright infringement
In the same case relating to "Only Fools and Horses", the Defendants argued that although their Dining Experience might prima facie seem to infringe the scripts and characters that John Sullivan created for the TV Series, they could in fact benefit from the defences of fair dealing by way of parody or pastiche (under section 30A of the Copyright, Designs and Patents Act 1988), and thus avoid infringement. There has only been one major ruling, from the EU Court of Justice, on the meaning and application of the parody defence, and none at all on pastiche, and so the judge's interpretation and application of them in this case is of great interest.
When it came to the essential elements of a parody, the judge built upon the existing case-law which required that the work must i) evoke an existing work, ii) be noticeably different from that work, and iii) constitute an expression of humour or mockery. But the judge found that this definition was too broad; in addition, he said, the work claiming to be a parody must also express an opinion about a target of some kind. In this case, the "Only Fools" Dining Experience was purely imitative of an existing comic work, expressing no opinion about anything (nor mocking "Only Fools" itself), and thus could not benefit from the parody defence.
Looking at the essential elements of a pastiche, the judge analysed the very limited amount of guidance available and decided that there were two essential ingredients: i) the work claiming to be a pastiche must either imitate the style of another work or be a medley of a number of pre-existing works; and ii) the work claiming to be a pastiche must be noticeably different from the original work(s). Again, the judge ruled that the Dining Experience could not benefit from the defence – the copying and borrowing from the TV scripts amounted more to reproduction by adaptation rather than an imitation of style; neither the marketing for the Dining Experience nor the reviews of it perceived it as pastiche.
Even if the Dining Experience had fallen within the definition of either parody or pastiche, the judge also ruled that it could not benefit from the defences as the Defendant must also show "fair dealing" with the work being copied for the defences to be available. That was not the case here as – contrary to fair dealing - the Dining Experience took material (characters, catch-phrases, back story, etc) wholesale from the TV scripts, thereby competing with the ways that the Claimants would want to exploit their copyrights (for example by way of the Only Fools Musical which they had licensed), and unfairly prejudicing their legitimate commercial interest in controlling how the Only Fools scripts and characters were used.
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