Welcome to February' and March's Ads & Brands Law Monthly Newsletter. We cover legal and regulatory developments from the last few weeks relevant to advertising, marketing and brand-owning businesses.
We hope you enjoy it.
(B)CAP issues further consultation on the implementation of new rules on ads for "less healthy" food and drink products
In January (B)CAP had decided to rethink its draft guidance on "less healthy" food and drink products in the context of the new restrictions coming into force in October. As a recap, the less healthy product advertising rules will prohibit ads for "identifiable" less healthy products from being included in Ofcom-regulated TV services and on-demand programme services between 5:30am and 9:00pm, and from being placed in paid-for space in online media at any time. (B)CAP consulted in late 2023 but indicated that it was rethinking aspects of the guidance, particularly brand advertising. It felt that it needed to better reflect the law; in particular, about how ads that do not include direct references to food and drink products, might still fall into the scope of the new legislation if the use of branding or other content deems the ad to be for an "identifiable" less healthy product (or products).
(B)CAP has now issued a new consultation. So, what does it say and what could it mean for advertisers? The crux of the matter is determining the meaning of "identifiable". Under the legislation, a product is identifiable, in relation to advertisements, if people in any part of the UK could reasonably be expected to be able to identify the ad as being for that product. However, the ASA is likely to have primary regard to the content of an ad when assessing how people perceive it. Crucially, where the advertiser is strongly associated by persons in the UK with the manufacture or sale of a less healthy product or a range of less healthy products, the use in an advertisement of a generic representation of that product or products in a way that is likely to bring to mind that product(s) would increase the probability of the advertisement being restricted.
Advertisers should also remember that where the less healthy product rules do not apply, advertisements for HFSS products must comply with the existing rules on HFSS advertising. These restrict the media environments where HFSS advertisements can appear and, if they are allowed, control the content of such advertisements, including by limiting their appeal to children.
The consultation ends on 18 March 2025.
CAP issue update on AI, advertising, and the policy landscape
CAP has issued an update on AI and advertising. It says that as well as using AI to support effective regulation, the ASA is a proactive regulator, constantly trying to understand emerging issues and monitor compliance with the rules. Its guidance makes clear that some of the advertising-related issues which AI may present are already dealt with by the Codes, including misleading images and claims, misleading endorsements and testimonials, and harmful or offensive imagery. Recent rulings have demonstrated that harmful, offensive, and socially irresponsible AI-generated images will breach the Code, just as any other type of image would. The ASA also has a Scam Ad Alert System, which it operates in partnership with major online ad and social media platforms to help tackle scam ads online, some of which involve the use of AI. CAP is aware that developments in public policy around AI have the potential to affect the way advertising which uses AI is regulated. CAP is closely monitoring policy developments both within the UK, and internationally, to ensure that it can respond as necessary.
CAP issues guidance about dark patterns and advertising
Sometimes referred to as 'Online Choice Architecture' or 'Deceptive Design Patterns,' Dark Patterns are a range of design decisions implemented to manipulate consumer behaviour in online spaces. There is concern that these practices cross the line beyond persuasion by exploiting human cognitive biases, confusing and coercing consumers into making decisions they may not have intended to make.
Many of the practices considered 'Dark Patterns' have long been regulated under the CAP Code. Their use in advertising is not inherently problematic but they can mislead. CAP has issued guidance on various rulings by the ASA which deal with subjects such as choice structure - the design and presentation of options, choice pressure - the indirect influence on a consumer's choices; and choice information- the content and framing of provided information.
Welsh government lays new HFSS regulations
The Welsh government has laid draft Food (Promotion and Presentation) (Wales) Regulations 2025 before the Welsh Senedd. The draft regulations follow a consultation last year, and they will introduce new rules that restrict price and location promotions of specific categories of pre-packed products high in fat, sugar and salt.
The draft regulations largely mirror the food promotion rules in England, which are partly in force already, and the rest come into force in October this year. The plan is for the new Welsh restrictions to apply from 26 March 2026. This allows for a 12-month implementation period. The Welsh Government plans to publish supporting guidance in due course.
CMA makes recommendations following infant formula milk study
The CMA has published recommendations following its infant formula milk study. It says that parents should be provided with timely, clear, accurate and impartial information on nutritional sufficiency of all infant formula products as early as possible. Where parents are given infant formula in healthcare settings, labelling should be standardised to reduce the influence of branding on their decision making. For example, branded formula could be put into non-branded containers, or the NHS could have a white-label formula. Nutritional sufficiency should be displayed clearly and prominently on shelves and when buying online.
In addition, the CMA says that in store, all brands of infant formula should be displayed together and in a separate cluster from other formula milks to enable quick and easy price comparisons. All packaging should clearly display information on nutritional sufficiency. Claims that are intangible, or cannot be easily checked by parents, should be banned. Like infant formula, advertising (including price promotions and deals) for follow-on milks should be banned. To help shops, manufacturers and enforcers, government should clarify what constitutes 'advertising', outlining exactly what shops and manufacturers can and cannot do regarding formula milks. Parents should be allowed to use gift cards, vouchers, loyalty points, and coupons to purchase infant formula. Finally, the CMA recommends strengthening the roles played by relevant authorities so they must approve the packaging of all infant formula products before sale. At present, companies can put products onto the market before the relevant authority has reviewed the label.
European Commission withdraws planned ePrivacy Regulation
It's been nearly four years since we reported that EU Member States agreed a final draft text for the proposed Regulation on Privacy and Electronic Regulations (ePrivacy Regulation), to replace the existing ePrivacy Directive (2002/58/EC) – noting that the next step was negotiations between the Council of the European Union and the European Parliament. Now it seems (perhaps unsurprisingly) that those negotiations have broken down and the ePrivacy Regulation's fate is sealed, as the European Commission withdrew it in its work programme for 2025, noting that there is "no foreseeable agreement" and that the proposal is now "outdated in view of some recent legislation in both the technological and the legislative landscape".
ICO issues priorities for online advertising industry
The ICO has issued its priorities for the online advertising industry during 2025. It expects organisations to give people meaningful control over how they are tracked online. The strategy sets out how it will promote compliance with the law in 2025 to obtain a fairer online tracking ecosystem for people and business. It says it will clarify how the law applies and the ICO's expectations in guidance and other publications, engaging with industry to shape a more compliant and privacy-oriented ecosystem. scrutinising the compliance of organisations across the online tracking ecosystem; and investigating and enforcing against organisations that do not comply. It identifies four main problems: deceptive or absent choice, uninformed choice, undermined choice and irrevocable choice.
The ICO says that it will make it easier for publishers to adopt more privacy-friendly forms of online advertising, ensure publishers give people meaningful control over how they are tracked on websites, ensure that people have meaningful control over tracking for personalised advertising on apps and connected TVs, confirm how publishers can deploy 'consent or pay' models in line with data protection law, supporting their economic viability, provide industry with clarity on the requirements of data protection law, leaving no excuse for non-compliance, investigate compliance failures in the wider adtech ecosystem and support the public to take control of how they are tracked online.
Court of Appeal finds look-alike packaging took unfair advantage of trade mark
For many years, brand owners have bemoaned the fact that there is no law of unfair competition in the UK (such as is found in many continental jurisdictions) to outlaw unfair copying of get-up and packaging by competitors selling cheaper look-alike products. The campaign is still ongoing to provide an enforceable legislative remedy, but in the meantime the Court of Appeal has given some important comfort – at least to those brands that have registered trade marks and built up a protectable reputation for their packaging. In such cases, and with the right supporting evidence, the Court has confirmed that a competitor who launches a copycat product and intentionally takes unfair advantage of the branded product can be found to have infringed the trade mark under section 10(3) of the Trade Marks Act (TMA).
Readers of this Digest will probably be familiar with the facts of the case. Thatchers had developed a successful Cloudy Lemon Cider brand of canned cider, and had registered a device trade mark in 2020 representing their packaging design used both on the cans and the four-pack boxes in which they were sold (the design had distinctive use of lemons, lemon leaves, background colouring and layout/lettering). Aldi launched a similar lemon cider product in May 2022, and Thatchers brought proceedings in the Intellectual Property and Enterprise Court (IPEC) alleging that the Aldi packaging was so similar as to infringe its trade mark. Thatchers were not successful before the IPEC judge, but appealed one aspect of the judgment – relating to taking unfair advantage under section 10(3) TMA – to the Court of Appeal.
With Lord Justice Arnold giving the leading judgment, the Court of Appeal found in Thatcher's favour on the appeal. The existing EU and UK case-law had established nine conditions for Thatchers to demonstrate in order to succeed under section 10(3), to quote Arnold LJ: "(i) the trade mark must have a reputation in the UK; (ii) there must be use of a sign by a third party within the UK; (iii) the use must be in the course of trade; (iv) it must be without the consent of the proprietor of the trade mark; (v) it must be of a sign which is identical or similar to the trade mark; (vi) it must be in relation to goods or services; (vii) it must give rise to a "link" between the sign and the trade mark in the mind of the average consumer; (viii) it must give rise to one of three types of injury... (a) unfair advantage being taken of the distinctive character or repute of the trade mark, (b) detriment to the distinctive character of the trade mark (often referred to as "dilution") or (c) detriment to the repute of the trade mark (often referred to as "tarnishment"); and (ix) it must be without due cause."
The main areas in dispute on the appeal related to establishing "unfair advantage" or "detriment" under point (viii), although Lord Justice Arnold also criticised the IPEC judge for under-estimating the similarity between Thatcher's registered mark and the Aldi packaging. The Court of Appeal rejected Thatchers' argument of "detriment" or "tarnishment", as there was no evidence that consumers thought less favourably of their mark. But on "unfair advantage" the Court found in Thatchers' favour - the close copying of elements of their mark in Aldi's packaging, combined with very little promotion by Aldi of their new product, led to the inference that Aldi had intended to take advantage of the reputation of the mark (and their sales figures, despite lack of promotional spend, showed that this had been the result). The success of the Aldi lemon cider depended upon "riding on the coat-tails" of the reputation of the Thatchers product, using a similarity in packaging to create the necessary link in the minds of consumers. Aldi was thus found to have infringed the Thatchers mark under section 10(3) TMA.
It has been suggested that Aldi may try to appeal the ruling to the Supreme Court, although that has yet to be confirmed (and they may not be granted permission to do so). In the meantime, this is an important judgment for brand-owners in the battle against look-alike competitors. It demonstrates the value of investing in suitable trade mark registrations for elements of packaging, and of investing in promotional activities (and record-keeping) to establish the necessary reputation upon which section 10(3) claims depend.
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.
