Advertising regulation remained in the spotlight in 2021, with several developments on so many fronts. This post provides a list of important highlights from the last twelve months.

The CMA’s work on fake reviews

In April 2021, an investigation by the Competition and Markets Authority (CMA) found evidence that illicit trading of fake and misleading online reviews was still taking place on both Facebook and Instagram. This was despite Facebook’s previous commitment in January 2020 to tackle the risk that people can buy and sell fake reviews and prevent such pages or profiles from reappearing on its social media platforms.

Facebook has now made additional changes to its systems in order to identify, remove and prevent such content on its services. It is, however, unsatisfactory that the CMA had to intervene again and, as Andrea Coscelli, CMA Chief Executive stated, ‘it is disappointing that it has taken them over a year to fix these issues’.

HFSS products

In June and July 2021, the government set out its intention to restrict the promotion of high fat, sugar and salt (HFSS) products that significantly contribute to children’s calorie intakes. With the key driver being children’s health and wellbeing, new legislation is likely to affect how the food and beverage industry will be able to promote and locate certain products in store and advertise on television and online.

Subject to some exceptions, promotions encouraging an increase in the volume of product purchased (e.g., ‘3 for 2’ and other multi-buy promotions) will no longer be allowed for HFSS foods and beverages. Moreover, HFSS products will not be permitted to be sold at certain ‘high footfall’ locations such as checkout areas, store entrances or queuing areas. The responsibility to enforce the policy will fall on local authorities which will be permitted to issue fixed monetary penalties for non-compliance with an improvement notice.

The location promotion restrictions will also be reflected in online marketplaces and will apply, for instance, to the homepage of websites, landing pages for other product categories and ‘view basket’ or ‘proceed to payment’ webpages.

A 9.00pm television watershed on HFSS products and a ban on online paid-for HFSS advertising at all times is expected to be implemented by the government before the end of 2022. While the Ofcom system already in place makes the new proposed TV restrictions somewhat easier to enforce, the details on the online ban are yet to be worked out.

Draft legislation on price promotion, location restrictions as well as TV and online advertising restrictions is anticipated early next year.

The CMA guidance on environmental claims

Although it seems all too easy for businesses to crow about their ‘green’ credentials, there is little clarity about the meaning of terms such as ‘eco-friendly’ or ‘recyclable’ and on what basis such claims are made.

In September 2021, the CMA published guidance to prevent ‘green washing’ and simultaneously help businesses comply with their obligations under consumer protection law, when making environmental claims on their goods and services.

In its Green Claims Code, the CMA developed six high-level principles that businesses should follow when making ‘green’ claims in advertising. Such claims must:

  1. be truthful and accurate;
  2. be clear and unambiguous;
  3. not omit or hide important relevant information;
  4. be fair and meaningful when making comparisons;
  5. consider the full life cycle of the product or service;
  6. be substantiated.

At the same time, the UK’s independent regulator of advertising across all media, the Advertising Standards Authority (ASA), concluded its review of the regulation of ‘green’ ad claims to ensure its guidelines are fit for purpose and in line with priorities identified by legislators and climate change experts.

Although the advertising watchdog is not currently looking to introduce new rules, it recognises that this is an evolving issue and announced three action points, including:

  1. industry guidance by the Committee of Advertising Practice (CAP) to help advertisers ensure their ads don’t mislead about the environment and are socially responsible when considering environmental issues. This will supplement the recently published CMA guidance, outlined above;
  2. enquiries into specific issues, starting with areas prioritised by the UK’s Climate Change Committee to facilitate carbon reduction, including aviation, cars, waste, animal-based foods and heating;
  3. research into consumer understanding of Carbon Neutral and Net Zero claims and research to understand consumer perceptions of ‘hybrid’ claims in the electric vehicle market. Findings are expected to inform additional guidance to be issued in 2022.

Ofcom and VSPs

In December 2021, Ofcom, the UK’s communications regulator, set out the framework for the regulation of advertising on video sharing platforms (VSPs). Last year, Ofcom was given new powers to regulate UK-established VSPs, which include a duty to ensure that standards around advertising on such platforms are met. In May 2021, the regulator consulted on its approach to the regulation of advertising on video-sharing platforms.

Ofcom decided that the regulatory framework should reflect the distinction in the Communications Act 2003 between advertising that is marketed, sold or arranged by the VSP provider (or in other words advertising controlled by the VPS) and advertising that is embedded within shared content uploaded onto the VSP and falls outside the VSP’s control:

  1. Where advertising is marketed, sold or arranged by VSP providers themselves, they are directly responsible for ensuring compliance with the relevant requirements.
  2. When advertising is not marketed, sold or arranged by them, VSP providers are legally required to take appropriate measures to ensure that such advertising meets the relevant user-protection requirements.

Ofcom’s guidance on the application of the distinction in the legislation can be accessed here. The ASA has been designated as the co-regulator for VSP-controlled advertising, with Ofcom acting as the statutory backstop regulator. Ofcom will administer the framework for regulating non-VSP-controlled advertising and will assess the measures taken by VSPs to protect users as appropriate.

Key ASA initiatives and projects

Over the last year, the ASA acted on a range of subject matters, including environmental claims, body image, cosmetic interventions to children, cryptocurrencies, influencer marketing and so on.

i.      Influencer marketing

In March 2021, the ASA published its first monitoring report on influencer ad disclosure, revealing a “disappointing overall rate of compliance” with its rules requiring ads on social media to be clearly signposted as such. I had reported on INFORRM about how the ASA is losing patience with influencer marketing and recently published an article in the Communications Law journal on advertising regulation and transparency in influencers’ endorsements on social media.

On 26 March 2021, the Digital, Culture, Media and Sport Committee opened an inquiry into influencer culture. The Committee will consider whether, aside from the existing policies of individual platforms, regulation is necessary and if so, what form it should take.

ii.     Racial and ethnic stereotyping in advertising

Following the introduction of its new rules on gender stereotyping in ads (CAP and BCAP Codes, Rules 4.9 and 4.14 respectively), the ASA launched in June 2021 another call for evidence on racial and ethnic stereotyping in advertising. This was prompted by the global reaction to the death of George Floyd in 2020 and the intense discussions about racial inequality that ensued.

Advertising rules currently require that marketing communications must not contain anything that is likely to cause serious or widespread offence on the grounds of race and ethnicity (CAP and BCAP Codes, Rules 4.1 and 4.2 respectively). The regulator now seeks to improve its understanding of whether (and if so to what extent) racial and ethnic stereotypes, when featured in ads, may contribute to real-life harms such as unequal outcomes for different racial and ethnic groups.

The call for evidence closed on 14 July 2021. The ASA is expected to report in 2022 on whether they are getting it right on racial and ethnic stereotyping in ads and if changes in the rules are merited.

iii.   New advertising rules on harm and protected characteristics

The ASA’s gender stereotyping work and, more recently, its work on racial and ethnic stereotyping provided the Committees of Advertising Practice with a further opportunity to consider the protection available for those sharing protected characteristics. In June 2021, the ASA launched a consultation on the introduction of new rules on harm and protected characteristics (as defined in the Equality Act 2010).

The Codes already contain rules that address specific forms of harm. For example, the rules under Section 4 of both Codes deal with physical, mental or moral harm to under-18s, fear and distress, condoning or encouraging unsafe practices or anti-social behaviour or violence, condoning or encouraging harmful discriminatory conduct, sexualisation of under-18s etc. Moreover, the core principles underpinning the respective Sections state that marketers must minimise the risk of causing harm. Other Code rules tackle different forms of harms relating to finance, gambling, alcohol, and the environment.

There are, however, no Code rules dealing with the public sector equality duty or protected characteristics in an overarching manner. As the CAP Committee stated in its press release, “CAP and BCAP consider that the introduction of explicit rules on harm and protected characteristics in both Codes will send a clear message to stakeholders of the standards that the ASA system already applies in practice in its regulatory decision-making”.

The consultation closed on 24 August 2021 and further developments in this area are expected in the new year.

iv.    Age-restricted ads

In July 2021, the ASA published a report on how ads are being served online on websites and YouTube channels with a mixed-age audience. The regulator looked at how dynamic ads for alcohol, gambling and HFSS food or drinks are served to adult and child audiences. For this purpose of this monitoring exercise, six avatars made a total of 252,000 website visits between 20 April and 10 May 2020 and were served 27,395 ads across all sectors on these visits.

The findings of the monitoring and enforcement report suggest that marketers of age-restricted products and third parties involved in the distribution of these ads online need to ensure sufficient rigour in the application of online targeting tools to skew these ads away from child and age-unknown audiences.

v.     Body image and cosmetic interventions

Given the continued political focus on efforts to tackle body image issues, the Committees of Advertising Practice announced in October 2021 an open call for evidence to assist in their understanding of whether there are body image harms arising from advertising that are not adequately addressed by existing rules and guidance, or the ASA’s application of those. The call for evidence closes on 13 January 2022.

In recognition of the prevalence of negative body image perceptions among young people and the impact body image pressure can have on their wellbeing, self-esteem and mental health, the Committees of Advertising Practice amended their respective codes to include new targeting restrictions that prevent ads promoting cosmetic interventions from being directed at under-18s

The new rules, which will take effect on 25 May 2022 and will hopefully contribute to mitigating the potential body image-related harms experienced by those age groups, require that:

  1. Ads for cosmetic interventions must not appear in non-broadcast media directed at under-18s or in other non-broadcast media where under-18s make up over 25% of the audience; and
  2. Broadcast ads for cosmetic interventions must not appear during, or adjacent to, programmes commissioned for, principally directed at, or likely to appeal particularly to, under-18s.

The advertising guidance on the marketing of surgical and non-surgical cosmetic interventions was updated in November 2021 to reflect the new placement and scheduling restrictions, and can be accessed here.

vi.    Crypto-asset ads

The popularity of crypto-assets such as coins and tokens has exploded in recent years but increasing concern over the lack of suitable warnings about a product’s risk has prompted several ASA investigations in crypto-asset ads across different media.

In the second half of December 2021, the ASA issued 9 rulings banning digital posters, paid-for ads and promotional posts on social media for irresponsibly taking advantage of consumers’ inexperience, for failing to illustrate the risk of the investment and for trivialising investment in cryptocurrency (see rulings on CoinBurp Ltd, Exmo Exchange Ltd, eToro UK Ltd, Luno Money Ltd t/a Luno, Payward Ltd k/a Kraken, Coinbase Europe Ltd t/a Coinbase, Papa John’s Ltd t/a Papa John’s Pizza, Skrill Ltd and Arsenal Football Club Plc).

These latest rulings offer some clarity on the regulator’s expectations in respect of crypto-asset advertising. The ASA will also be carrying out proactive monitoring and enforcement to tackle non-compliant ads for crypto-assets in the new year.

It seems likely that we will see further changes to the adverting rules in the near future. Marketers and brands need to be conscious of these developments so that they can adapt their organic strategy and proactively tailor their work to best support brands.

Alexandros Antoniou, University of Essex, School of Law,