The European Alliance of Listeners’ and Viewers’ Associations - EURALVA and The Regulation of Unfair Practices in TV and Radio Advertisements in UK
The provisions of the UK’s Consumer Protection from Unfair Trading Regulations 2008 derive from Directive 2005/29/EC of 11 May 2005 concerning unfair business to consumer commercial practices. As EU Commissioner Kuneva noted in a speech, which she gave in Lisbon on 10 November 2007, “A pan-European market will only work well if consumers have the confidence to shop across borders and if businesses can operate on a level playing field Europe-wide.” “In order to bring this about”, she continued, “We need a simple and uniform set of rules to apply to certain key areas. We need to have the tools to enforce those rules. And we need effective mechanisms of redress when things go wrong. This objective is very much in tune with our Citizens' Agenda, which seeks to deliver an open and fully functioning single market that brings tangible benefits for consumers.”
“This Directive”, Commissioner Kuneva observed, “aims to protect consumers from misleading advertising and other types of unfair commercial practices – before, during and after the conclusion of a contract.” And, she went on to assert, “Clearly, consumers will not be able to enjoy the full benefits of the Single Market unless effective systems are in place to address their complaints and to give them the means for adequate redress.”
It is from this perspective that EURALVA will comment upon ASA / BCAP’s proposals to amend its Code of Practice for radio and television advertising.
The regulatory and administrative framework within which BCAP operates presents it with a series of administrative challenges which do not yet allow viewers of UK-licensed television services, or listeners to UK-licensed radio services, to be sure that an effective system has been put in place which will address their complaints and to give them the means for adequate redress.
1. It is clear from the Introduction to BCAP’s TV Code that the code will apply to all TV satellite services licensed within the UK, whether or not their main audience is in the UK.
2. Thus the first issue which concerns EURALVA is whether the Committee of Advertising Practice, and beyond that the Advertising Standards Authority, is competent to evaluate whether the advertisements that are placed with those broadcasters whose main audience lies outside the UK are – or are not - misleading. EURALVA is advised, that most, if not all, of the advertisements placed on channels directed at a non-UK audiences are not in the English language, and that most of them are placed there either by international advertisers, or by advertisers who are based in the country of reception where the main audience lives.
It appears, however, that although the Advertising Standards Authority is a member of the European Advertising Standards Alliance (EASA), and Andrew Brown, the Chairman of the Committees of Advertising Practice, is a member of the Executive Committee of EASA, all of the other members of the Committees of Advertising Practice only appear to have experience of UK advertising. Moreover, EASA only appears to be an Alliance of national advertising bodies from 22 European Member States, and therefore the Advertising Standards Authority appears to have no authority over members of non-UK advertising associations, even though they may be members of EASA.
EURALVA therefore submits that it would be premature for BCAP to implement a code of practice which appears to claim to be able to regulate misleading advertising by non-members of the UK advertising industry, until such time as all those members of the other 21 European advertising association who are members of EASA, and who wish to advertise on UK-licensed television services with audiences living outside the UK, have agreed in writing to abide by the rules of the BCAP code, and to accept any subsequent judgements by the Advertising Standards Authority about the misleading nature of their advertisements.
3. A second aspect of competence is the language in which the putatively misleading advertisements are presented – i.e. written or spoken. More precise, how will the advertisement be understood by the average member of a non-UK audience? Article 2(4) of the Consumer Protection from Unfair Trading Regulations 2008, which is repeated virtually verbatim in the proposed Code of Practice, provides that “In determining the effect of a commercial practice on the average consumer where the practice is directed to a particular group of consumers, a reference to the average consumer shall be read as being a reference to an average member of that group.”
EURALVA submits that where a potentially misleading advertisement is directed at a group of non-UK, and especially non-Anglophone, consumers, then the BCAP must include a provision in the code for it to be individually vetted by someone whose language of birth is the same as that of the non-UK consumers of the advertisement.
4. The next issue concerns the means by which the ASA and BCAP will enforce the provisions in their code if things go wrong? At the moment, the code proposes to transfer the burden of responsibility for remedying an infringement of the code from the advertiser to the broadcaster, at the end of a three-stage process:
(a) A consumer – and this includes a non-UK consumer – must raise a complaint with the ASA/BCAP about the misleading nature of the advertisement. Only a very sophisticated non-UK consumer – not an average consumer as required by the EU Directive and the UK regulations – will know to whom to complain.
(b) The complaint about the allegedly misleading advertisement in a foreign language must be upheld by the ASA; and
(c) The broadcaster who originally broadcast the misleading advertisement – but not it seems other broadcasters – must continue to broadcast the advertisement before Ofcom can take punitive action against the broadcaster, but not the advertiser.
This process seems very slow, and unlikely to remedy an abusive situation. More specifically, it does not equip ASA/BCAP with the appropriate tools to remedy the situation when things go wrong.
EURALVA therefore submits that ASA/BCAP needs to make two changes to their procedures:
They need to introduce a procedure whereby they can inform the average non-UK consumer of how to complain about an allegedly misleading advertisement. This could be done by informing non-UK listeners and viewers directly - for example, where relevant, by requiring advertisers to buy advertising space in the broadcasters’ programme magazines to inform subscribers of the complaint procedures, or by referring them to the ASA/BCAP websites.
The ASA needs to equip itself with powers, immediately it has upheld a complaint about a misleading advertisement – or series of advertisements - to enforce their withdrawal from all UK-licensed broadcasters – not just from the broadcaster against whom the complaint was first made. This could be done by requiring all UK and non-UK advertisers who use the services of BCAP to sign an agreement in which they agree immediately to withdraw their misleading advertisement from all UK-licensed broadcasters, and to pay a substantial fine to the ASA should they fail to do so.
5. The next issue concerning the code is how it will establish an effective mechanism of redress when things have gone wrong. This is a tricky, partly because Directive 2005/29/EC of 11 May 2005 is established “without prejudice to contract law” – although this provision is not in the UK regulations.
EURALVA therefore submits that it will therefore be necessary for ASA/BCAP to put in place arrangements whereby any contract, which is subsequently established between a listener or viewer and the perpetrator of a misleading advertisement, cannot absolve the misleading advertiser from his responsibility to provide the wronged consumer with adequate redress.
EURALVA therefore proposes that the ASA requires that an undertaking of this nature is demanded from all advertisers who make use of the BCAP system.
In addition, EURALVA also submits that it would be improper for ASA/BCAP to assume that an average consumer who is” reasonably well-informed, reasonably observant and circumspect” (which is what the Regulations require) will retain receipts for every transaction arising from a broadcast advertisement which involves a subsequent transaction, on the grounds that it may be a misleading advertisement.
It is notable that when ITV and C4 were fined by Ofcom for misleading UK television viewers into dialling premium rate telephone numbers in order to “vote on” the ”outcome” of certain television shows, those viewers who had been induced into paying for such premium rate calls (quite reasonably) had to produce documentary evidence that they had indeed made those calls. However, many average viewers, who did not have itemised telephone bills, lost out because they had no documentary proof.
EURALVA therefore submits that broadcast advertisements, which also promote follow-up transactions, must also advise average listeners and viewers to keep receipts of all personal transactions arising from advertisements of this nature.
6. The Issue of Cross-Media Promotions. There is currently substantial uncertainty among average viewers about the boundaries between the regulatory responsibilities for different media. At the EU level, the scope of the new Audiovisual Media Services Directive is unclear, and in particular the boundary between it and the e-Commerce Directive. This is especially so in the UK, where the Government is minded to split the regulation of Video-on-Demand Services between those established by traditional broadcasters, which will be regulated under the provisions of the Audiovisual Media Services Directive, and those which are established by other providers, which will be regulated under the provisions of the e-Commerce Directive, the terms of which are also about to be revised.
Within the UK, we have also witnessed initial regulatory uncertainty by Ofcom, as to whether the “premium-rate telephone scandal” was an editorial issue for the regulation of television broadcasters, or merely an abuse of premium rate telephone services. In this case, it is notable that the maximum fine allowed for the abuse of a premium rate telephone service was only a small proportion of that ultimately imposed by Ofcom on the errant television broadcasters.
It is now quite possible to envisage an arrangement whereby a product or service is advertised on a (UK-licensed) radio or television station, but in which the deal is subsequently concluded by an on-line arrangement, or legal contract, which takes place either under UK law, or possibly under another EU jurisdiction. Regardless of what subsequently happens in other media, beyond the realm of broadcast advertising, listeners and viewers must be able to get redress from goods or services which were wholly – or even partially – promoted by broadcast advertising.
EURALVA therefore submits that the ASA/BCAP must establish adequate cross-media correlation and interaction between the regulation of broadcast advertising and subsequent non-broadcast commercial activity by the perpetrator of a misleading advertisement, in order to ensure that listeners and viewers from all over Europe can receive full and speedy recompense. The details of this may require further detailed consideration.
This responsibility to guarantee adequate recompense to may also require the ASA/BCAP to establish a reserve fund to recompense listeners and viewers from any misleading advertisements placed by advertisers (or their agents) who subsequently go bankrupt.
Professor Vincent Porter
President of EURALVA
21 July 2008