Clifford Chance

FCA, not ASA, now regulates technical claims in adverts for cryptoassets in non-broadcast media

The FCA has recently taken over the regulation of adverts for "qualifying cryptoassets" with new rules introduced in June 2023. These rules are applicable to all firms marketing such cryptoassets to UK consumers. The FCA has also published a non-handbook guidance on financial promotions of cryptoassets in November 2023, listing several factors for assessing whether a financial promotion is fair, clear and not misleading, including whether the financial promotion omits relevant information or makes exaggerated claims.

The new rules do not cover non-fungible cryptoassets such as NFTs and Limited Payment Tokens that can be redeemed with the issuer. Therefore, the ASA will continue to regulate adverts for such cryptoassets.

The ASA remains the authority that regulates the "non-technical" aspects of adverts for products, including products by FCA-regulated businesses, such as matters relating to social responsibility, fear of missing out and trivialising claims that do not relate to specific characteristics of the product. In particular, the ASA states that "ads must be set out in a way that allows them to be understood easily by the audience being addressed". It advised that advertisers should keep evidence to support claims about non-technical aspects of products as per Rule 3.7 of the CAP Code.

Key takeaways:

• The ASA will continue to regulate adverts for non-fungible cryptoassets. Advertisers are advised to keep evidence to support claims about non-technical aspects of products.
• Meanwhile, the FCA will take over the regulation of adverts for "qualifying cryptoassets". The FCA's non-handbook guidance indicates that such adverts should be fair, clear, and not misleading.

By Hayley Kwan, Associate in the Intellectual Property team in London.

CAP and BCAP interim statement regarding body image harms from advertising

In light of recent political focus on body image issues, CAP and BCAP have been exploring the potential body image related harms from advertising. The UK Advertising Codes already include rules that seek to prevent adverts from harmfully affecting how audience members see themselves physically and how they believe others see them physically. However, a newly published interim statement hints at potential regulatory changes to come.

The statement acknowledges the many factors influencing body image, including societal norms and media impact and highlights responses from stakeholders. Several respondents emphasised increased body image pressures on specific groups and the influence of social media advertising and its role in enticing young adults.

Key takeaways:

• The CAP and BCAP are assessing evidence to determine the necessity of regulatory change in relation to body image issues and advertising, with particular regard to how children and individuals with protected characteristics are affected.
• The CAP and BCAP are prioritising exploratory work into the potential harms arising from:
  •  digitally altered images in advertising and labelling as a possible intervention;
  • the depiction of muscularity in advertising; an
  • the depiction of women from minority ethnic backgrounds in adverts and whether new and unattainable body image ideals could be created.

By Uche Eseonu, Associate in the Intellectual Property team in London.

The ASA uncorks its new guidance on advertising alcohol alternative products

The ASA has published new guidance in relation to the advertising of alcohol alternative products, i.e. drinks at or under 0.5% ABV. The guidance stipulates that if an advert for an alcohol alternative product essentially has the effect of promoting an alcoholic drink, then the rules applicable to advertising alcohol will apply in full. However, if it is very clear that the advert is for an alcohol alternative, then there is often more flexibility. The specific context will be very important when considering advertising alcohol alternatives.

Key takeaways:

• must include a prominent statement of their ABV (%).
• that share the same brand as alcoholic drinks will not need to comply with the alcohol advertising rules if the primary effect of the advert is to promote the alcohol alternative and this is made clear.
• may depict the product in circumstances where it would be inappropriate to consume alcohol (e.g. driving) if it is clear the product is an alcohol alternative and such consumption would otherwise be lawful.
• must not be likely to appeal to people under 18, especially by being associated with youth culture or showing adolescent or juvenile behaviour.
• must not be directed at people under 18 through the selection of media or the context in which they appear. No medium should be used to advertise alcohol alternatives if more than 25% of its audience is under 18 years old.
• must not include people shown drinking or playing a significant role in adverts for alcohol alternatives who are, or seem to be, under 25 years old.

Further information can be found on the ASA website here. This guidance comes into force on 14 May 2024, so there is a six-month grace period from now for advertisers to make any necessary adjustments.

By Laura Hartley, Associate in the Intellectual Property team in London.

Other regulatory updates to note

• The ASA has updated its guidance in relation to green disposal claims. Read more here.
• The ASA has launched a consultation in relation to the new rules on adverts for 'less healthy' food and drink products coming in 2025. Read more here.
• The ASA has collaborated with influencers to raise awareness of  the ASA system. Read more here

Prince of Darkness caught in a tight "spot"

The ASA has ruled against Sony and Ozzy Osbourne for failing to adequately disclose a tweet promoting Playstation's new VR2 headset. The gaming company collaborated with Ozzy Osbourne to create an advert for use across different media, including video on demand and YouTube pre-roll placements. As part of the agreement, Osbourne was also contracted to post a tweet sharing the video, but Playstation did not specify the tweet's format or wording; nor did it have any approval over the post.

Osbourne posted the video along with the text: "Did this spot with @Playstation team. We had a lot of fun. Their new VR2 is really amazing", and the complainant queried whether it was obviously identifiable as a marketing communication.

Sony argued that the word "spot" was widely recognised as referring to a short advertisement, and its use near the beginning of the tweet meant that it was sufficiently prominent for consumers to understand the video was commercial in nature. The ASA acknowledged that the position of the word in the tweet was prominent and visible before the video started playing but considered the use of the word "spot" was not sufficient to disclose the commercial relationship between the parties. As the advert did not make its commercial intent clear upfront, the tweet was considered to be in breach of the Code.

Key takeaway:

• Social media adverts should be marked with "#ad" or similar, even if the wording otherwise indicates the content is an advert.

By Laura Hartley, Associate in the Intellectual Property team in London

Nissan must shed light on the power source of new hybrid cars clearer

The ASA upheld a complaint raised against two TV advertisements by Nissan, on the basis that the adverts did not make clear the power source of the new Nissan Qashqai.

Both adverts showed a car driving through a city at night with electric sparks trailing behind it, and sparking electric vehicle charging cables that were plugged in to other cars. A voiceover was featured saying "Who said electrification can’t spark excitement when unplugged? New Nissan Qashqai with e-Power. A unique electrified experience unplugged". There was also on-screen text stating "FUELLED BY PETROL DRIVEN BY ELECTRIC", "NO NEED TO PLUG IN" and "*e-POWER comprises a 100% electric motor-driven system, powered by a lithium ion battery and a petrol engine".

While Nissan maintained that the adverts did not make references to the car being fully electric and made clear that it was an "e-Power" car, the ASA found that the adverts placed strong emphasis on electricity as a means of power. In reality, the "e-Power" technology used an electric motor to drive the cars’ wheels, with the motor itself being powered either directly by petrol, or from a battery recharged by petrol. The ASA therefore found that the role and use of petrol in powering the car was unclear in the adverts. Further, the ASA considered that "e-Power" was a new technology and most consumers would not be aware of how it differed from other forms of hybrid technology. As a result, these adverts would likely mislead consumers.

The adverts did not make any claims as to emissions. Nevertheless, the ASA considered that consumers might understand from the adverts' focus on electricity that the car was a better choice for the environment. Since the adverts did not make sufficiently clear the nature of the car's power source and that petrol (which would produce emissions) was required, the ASA found the adverts were misleading given the unclear basis of environmental claims.

Key takeaways:

• Advertisers should make clear the power source of any vehicle, especially one that uses a technology new to the market. It is no longer sufficient to simply display on-screen text for longer than the legally stipulated time for a consumer to read. Advertisers should consider making clear the power source and how it powered the vehicle in voiceover and on-screen graphics.
• Advertisers should consider whether environmental claims were inadvertently made and ensure the overall impression does not exaggerate or mislead about a car's environmental impact. Despite making no explicit claims of advantages or disadvantages of using a vehicle, consumers may be misled if there is insufficient information about power source and potential emissions.

By Hayley Kwan, Associate in the Intellectual Property team in London.

Rebel Wine's rebel advert

The ASA has upheld a complaint against Rebel Wine Ltd., a wine company that offers wine in a can, either with or without CBD.

Rebel Wine published an Instagram post within which a video showed a drink being made, with overlaying text referring to "Skinny Rebel Wine Spritzer". The ASA questioned whether the use of "Skinny Rebel" complied with the Code, which states that any marketing communications for alcohol products must not make any claims related to health, fitness or weight-control. Health claims are those that state, suggest or imply a relationship between a food or ingredient and health.

Rebel Wine said that:

• "Skinny Rebel" was a brand name and registered trade mark
• The word "Skinny" referred to the products having half the alcohol content (and therefore half the calories and energy) compared to their full-strength wine
• Their marketing did not indicate that the wine would help maintain weight or aid weight loss.

The ASA held that the claim would lead consumers to believe that the product would help them lose or maintain weight when compared to alternative products. Therefore, the advert was making a health claim.

The ASA did not consider that consumers would interpret "Skinny" as being related to alcohol strength. Further, Rebel Wine had not produced any data to show the products had 30% less alcohol than its counterparts. Therefore, even if the claim was interpreted as a reduced energy comparative nutrition claim, it would have breached the Code due to its lack of evidence.

Key takeaways:

• Registered trade marks still have to comply with the Code.
• Adverts for alcohol must not make health claims or unsubstantiated nutrition claims.

By Molly Margiotta, Associate in the Intellectual Property team in London.

Gamble cleared: William Hill unscathed in ASA decision

The ASA recently launched its AI-driven "Active Ad Monitoring system", which uses AI to proactively search for online adverts falling foul of the Code. Using its new tool, the ASA identified and challenged William Hill's promoted tweet featuring a video clip of ex-footballer Robbie Savage discussing Leeds United's relegation prospects. The ASA investigated whether the advert breached the Code by including an individual likely to be of strong appeal to those under 18, especially considering strengthened regulations against gambling adverts with such appeal.

William Hill argued that the tweet was targeted at 25-to 49-year-olds who followed Leeds United and Sky Sports accounts. Savage had been a brand ambassador since 2010, and William Hill presented evidence that there was a low risk of Savage appealing to children based on his age, career status, and the audience demographics for his social media accounts.

The ASA acknowledged the adult focus of Savage's work, especially with BT Sports Score and BBC Five Live Radio, and considered his social media following, finding no strong appeal to under-18s. The decision hinged on factors such as Savage's long-retired status as a footballer and his adult-focused media roles, supporting the conclusion that the advert did not strongly attract under-18s' attention. Therefore, the advert did not breach the Code.

The ruling highlighted the complexity of advertising in the gambling industry and the need for advertisers to conduct thorough analyses of individuals featured in their adverts. Importantly, it emphasised the significance of providing robust evidence to support claims about the appeal of individuals, particularly in relation to the advert's target age group Overall, the decision favoured William Hill, indicating that the company has successfully demonstrated the low appeal of the advert to individuals under 18, in compliance with advertising standards.

Key takeaway:

• Advertisers should ensure transparent, evidence-based gambling adverts, highlighting strict regulations and continuous compliance in the protection of vulnerable groups

By Giulia Peluso, Trainee Solicitor in the Intellectual Property team in London

No gassing yourself up: misleading use of Government logo and website name

One Source Digital Ltd, a digital marketing company, created an advert to promote the availability of government grants for obtaining a boiler from ECO Funded. The advert stated, "Find Out If You Qualify", and displayed a crown logo next to the words "GOV.UK". There was more text beneath: “Free GOV.UK Grants” (in a green circle), “Is Your Boiler 15+ Years Old?”, and “Claim your FREE Boiler Grant If you or anyone in your household receives benefits”.

The ASA considered whether the advert misleadingly implied that ECO Funded was linked to or endorsed by the UK Government.

One Source Digital Ltd explained that the advert referred to the official gov.uk website since the grants were available under a Government-endorsed scheme. Meanwhile, the crown logo assured consumers that the scheme was legitimate.

The ASA ultimately decided that the advert was misleading:

• In using "Gov.uk" alongside the Government crown logo, the advert misleadingly implied that ECO Funded was linked to the UK Government.
• This was especially since the ECO Funded website domain ended in "org.uk" (“Ecofunded.org.uk”). This domain name remains associated with non-profit organisations (which were the original users of "org.uk").
• Although the Government scheme was available when the advert was published, ECO Funded itself was never specifically endorsed by the Government.

Key takeaways:

• If a company is neither linked to nor endorsed by the UK Government, its marketing should not contain phrases and logos that suggest any link.
• The public is likely to believe that websites hosted on .org.uk websites are non-commercial in nature. Operators will be held to a higher standard than .co.uk or .com domains in ensuring users are not mislead as to the business affiliations of the website.

By Jeanette Lee, Trainee Solicitor in the Intellectual Property team in London.

The ASA has ruled that a promotion launched by Pretty Little Thing (PLT) was not administered fairly as a complainant was unable to redeem the discounts in question due to (i) an IT error and (ii) misinformation from customer services.

The promotion email in question offered customers a double discount and was headed:

“JUST FOR YOU DOLL EXTRA 25% OFF SALE & ROYALTY FOR £3.99”.

Further text sitting alongside a discount code stated:

“Re-join royalty now for £3.99 using your exclusive offer & get an extra 25% off sale too”,

A complainant was only able to redeem one part of the abovementioned discount, which PLT confirmed to be as a result of an IT error. The complainant then contacted PLT's customer service team and was mistakenly informed that sale items were excluded from the offer, preventing them from redeeming the discount.

As a result, the ASA concluded that the promotion had not been administered fairly, and the ad must not appear again in the form complained of.

Key takeaway:

• Brands must ensure their customer service teams fully understand the rules of any ongoing promotions.

By Uche Eseonu, Associate in the Intellectual Property team in London.

Looking back at 2023's Christmas Ads

• Aldi – this Kevin the Carrot x Roald Dahl mashup is a winner.
• John Lewis – usually a classic, but we're not sure about the flytrap Christmas tree this year.
• Barbour – a newcomer on the Christmas advert scene, but we loved this heart-warming Shaun the Sheep collab.
• Amazon – no words were spoken in this advert, but many tears were shed.
• Lidl – would you let a raccoon in from the cold for Christmas? Another weepie

In case you missed it on Talking Tech:

• The new UK Online Safety Regime
• The UK AI Safety Summit and Fringe - Seven things we learned
• Is ChatGPT a medical device?
• Webinar: Space tech for smart cities
• Webinar: IP and AI a Review of New Legal Challenges
• Webinar: Responsible AI – navigating evolving law, policy and public perception

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