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Is your online advertising legal, decent, honest and truthful?

18 August 2016 |

In this second part of our 10 part series on compliance risks relating to websites and mobile apps, we take a look at the law on advertising and marketing.

What is it?

From email newsletter subscriptions to pop ups and targeted social media campaigns…we’ve all experienced online advertising in its variety of forms. Done well, it can be a key source of publicity and revenue for your business, but plotting a safe course through the vast and complex laws surrounding online advertising and marketing can be difficult.

The purpose of advertising and marketing law is to ensure that consumers are not lied to, misled by or bombarded with marketing communications or unsolicited messages by companies touting their products or services to them. Other laws, such as those relating to cookies and data protection, also come into play – but we will look at these later in this series of articles.

What’s the law?

It is beyond the scope of this article to set out all of the laws and regulations that surround internet advertising. Generally, in the UK what applies offline applies online. Businesses therefore need to be aware of the ‘core’ consumer protection laws which relate to advertising and marketing, such as

  • Providing clear information on quantities and price,
  • not engaging in unfair commercial practices when dealing with consumers ( this applies to business –to-consumer or B2C advertising) and
  • being honest and accurate when advertising contains comparisons with competitors (this applies to business-to-business or B2B advertising)

This is in addition to any sector specific advertising rules there may be (e.g. sales of age-specific products, financial services etc).

Breaches of advertising law can give rise to criminal sanctions against a business and its directors or other key officers (including a fine and/or imprisonment). The Consumer Protection (Amendment) Regulations 2014 now give consumers the right to bring county court claims against traders for misleading or aggressive practices. If successful, a consumer’s remedies can include unwinding the contract, receiving a discount on the goods/services purchased or a claim for damages.

In addition, the Advertising Standards Authority (ASA) can order sanctions against an trader whose advertisements fall foul of the CAP Code (see below). These sanctions can include:

  • Ad alerts requiring the media to inform the ASA if a trader places new adverts
  • Requiring search engines to remove a trader’s paid-for adverts if they link to a page containing non-compliant adverts
  • Naming and shaming on the ASA website (a naughty list of non-compliant traders, covering everything from alternative medicines and holidays to probate research companies)
  • Mandatory pre-vetting of all advertisements from that trader for up to 2 years

How do you comply?

A good place to start is to be aware of the CAP Code (or to give it its full title, The UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code)  – this supplements advertising and marketing laws and is enforced by the ASA. It applies:

  • to websites operated by organisations of all sizes based in the UK (although the ASA can take action against non-UK based sites in appropriate cases)
  • to any communication which is “directly connected with the supply or transfer of goods, services, opportunities and gifts, or which consists of direct solicitations of donations” (although it is not necessary for a price to be stated or for an immediate transaction to be solicited for the CAP Code to apply)

The Code specifically covers (amongst other things):

  • online video
  • banners and pop ups
  • viral campaigns
  • Sponsored search results

…but does not cover:

  • Press releases / PR (unless directly connected with the sale of goods/services)
  • Price comparison site listings
  • Marketing for causes / ideas in non-paid-for space (unless donations are solicited)
  • User generated content (e.g. reviews) unless adopted and incorporated within an organisation’s own marketing communications, following a 2013 ruling

How can we help?

Any form of legal action or intervention poses a threat to a trader’s reputation (social media is a powerful weapon in the hands of disgruntled consumers with an axe to grind), not to mention wasted management time and legal expenditure.

To ensure your website complies with the law in relation to online advertising and marketing (and other compliance areas) you should take a look at our iAudit® product. For a fixed fee, we will undertake a rigorous assessment of your website or mobile app and provide you with a colour-coded risk report and advice on how to get compliant.

If your business regularly advertises its goods and services to consumers, we can also provide a pre-publication review service.

With thanks to Kayleigh Davies for her contribution to this article.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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