Ads & Brands Law Digest: October 2024 – Advertising, Marketing & Branding – Media, Telecoms, IT, Entertainment

Welcome to the latest Ads & Brands Law Monthly Newsletter.
We cover legal and regulatory developments from the last few weeks
relevant to advertising, marketing and brand-owning
businesses.

Ofcom renews co-regulatory arrangements with
ASA

Ofcom has officially renewed its co-regulatory arrangement with the
Advertising Standards Authority. This means that the ASA will
continue to oversee the day-to-day regulation of broadcast,
on-demand programme services and video-sharing platform advertising
until October 2034.

With the rapid growth of digital platforms, this renewal
emphasises the importance of robust advertising regulation aimed at
protecting consumers and ensuring fairness in advertising.

UK government consults on draft legislation to regulate
Buy-Now, Pay-Later arrangements

Following a previous consultation, the UK government is consulting about its plans for regulating the
BNPL market. It wants to ensure people using BNPL products receive
clear information, avoid unaffordable borrowing, and have strong
rights when issues arise. The government’s approach aims to
maintain access to a popular product while adding safeguards.

The consultation ends on 29 November.

BCAP introduces new rules restricting broadcast ads for
qualifying cryptoassets

Following consultation (to which it didn’t receive any
responses), the Broadcast Committee of Advertising Practice (BCAP)
has introduced a new rule that explicitly bans ads
for certain types of cryptoasset products from being broadcast to
mainstream, non-specialist audiences.

These products were already restricted under rule 14.5.4 of the
BCAP Code, as they are not regulated by the Financial Conduct
Authority (FCA). However, in October 2023 the FCA began regulating
the advertising of fungible and transferable cryptoassets,
including cryptocurrencies and utility (fan) tokens.

These ‘qualifying cryptoassets’ are classified as
Restricted Mass Market Investments. This means that they can be
marketed to the public, but with restrictions that recognise their
risk level and require investors to undergo pre-vetting.

BCAP’s update to the BCAP Code maintains the existing
restrictions on advertising these products to appropriate
specialised broadcast audiences. It also makes the rule more
precise, acknowledging the broad and widespread category of
investments that did not exist when the rule was first created. It
also serves to remind broadcasters about the statutory restrictions
on advertising these products.

Cryptoassets not included under the ‘qualifying
cryptoassets’ category will continue to be caught under rule
14.5.4, which covers unregulated investments more generally. The
rule adds clarity for industry and consumers, but does not alter
existing policy on advertising these products. The change has now
been approved by Ofcom and takes immediate effect.

CJEU clarifies basis of calculating discount
claims

The EU’s Court of Justice has ruled that a price reduction in an
advertisement must be calculated on the basis of the lowest price
charged in the last 30 days. It is not sufficient simply to provide
the lowest price in the last 30 days somewhere in the advert.

The case concerned the German consumers’ association taking
Aldi Süd to court in Case C-330/23 Aldi Süd over
how the retailer advertises its price reductions or “price
highlights” in its weekly brochures, particularly for items
like bananas and pineapples.

The position in the EU contrasts with the UK approach which is
set out in the Chartered Trading Standards Institute (CTSI)’s
“Guidance for Traders on Pricing Practices” This guidance
removed a rule like the EU position in favour of a list of
non-exhaustive factors to consider in determining whether a price
reduction is genuine. These include considering how long the
product was on sale for at the higher price compared with the lower
price and whether significant sales were made at the higher price
before the price comparison was made.

The CMA is currently reviewing pricing in retailers, especially
loyalty card pricing, and has said that it will publish new
guidance in November.

UK government makes new Price Marking Amendment
Order

The Price Marking Order took effect in Great Britain in 2004.
Its aim was to provide greater transparency to consumers of the
prices of goods. Unless an exemption applies, the PMO requires that
both the selling price and the unit price should be displayed in a
way that is unambiguous, easily identifiable, and clearly legible.
prices of goods.

The spotlight was placed on the PMO in July 2023 when, as part
of the Competition and Markets Authority’s investigation into
unit pricing, the CMA recommended some changes to the PMO. The CMA
wanted to make the display of unit pricing more helpful to
consumers including ensuring the PMO covered products which have
more than one price due to price reductions and making the display
of the pricing information clearer.

The new PMO, which was agreed in October 2034,
comes into force on 1 October 2025. It mandates the consistency of
units for unit pricing, bolsters requirements on legibility,
ensures loyalty pricing is covered, deals with price reductions and
“deposits” under the Deposit Return Scheme.

CAP issues updated guidance note on green claims in the
fashion industry

The CMA has (finally) issued an updated guidance note which is
‘tailored’ to retailers in the fashion industry. While the
guide focuses on retailers, the CMA makes clear that it is also
relevant to those who manufacture or distribute products in this
sector.

This follows the CMA’s protracted investigation into the
fashion industry – specifically into ‘eco’ ranges by George
at ASDA, Boohoo, and ASOS.

The guidance is designed specifically to help retailers (and
others) in the fashion industry comply with their obligations under
consumer legislation to avoid creating misleading environmental
claims. It relates to clothing, footwear, fashion accessories and
related services, for example packaging, delivery and returns.

As well as issuing the new guidance, the CMA has written to 17
well-known fashion brands to review their business practices. These
letters highlight areas of concern regarding their green claims,
such as the use of broad or general terms and whether certain
products are being wrongly included in ‘eco’ ranges. If you
are involved in the fashion industry, now is a good time to take
stock of the green claims your business makes.

Legislation passed to ban sale and supply of single use
vapes in Great Britain from 1 June 2025

The UK and devolved governments have confirmed that single use vapes will be banned
from 1 June 2025. The UK government has laid legislation to
introduce the ban and, subject to parliamentary approval,
businesses will have until 1 June 2025 to sell any remaining stock
they hold and prepare for the ban coming into force.

The UK government and devolved administrations have been working
together and are aligning the dates on which their respective bans
come into force. The Welsh government said that The Environmental
Protection (Single-use Vapes) (Wales) Regulations 2024 would be
laid.

The Scottish government had laid draft regulations which foresaw
a date of 1 April 2025 for them to come into force in Scotland.
However, the Times has reported that Scottish health secretary Neil
Gray announced that the Scottish government would now lay further
regulations to amend the date to be in line with England and
Wales.

Six telecoms companies investigated over unclear price
rise information

The ASA has upheld complaints about adverts from six
telecommunications companies promoting broadband or mobile data
products for failing to be sufficiently transparent over pricing.
The ASA considered that the ads were misleading under the CAP Code
because they promoted headline price claims without clearly
displaying information about mid-contract price increases.

Each ad was displayed on the advertiser’s own website. It
featured a headline price and information about different product
packages and their initial pricing. Qualifying information about
mid-contract price rises was also shown on each webpage (usually at
the top or bottom) but away from the price claims and often in
smaller text. Because qualifying information was not located close
to the price claims or given equal prominence to them, the ASA held
that it was not clearly displayed to consumers and the ads were
therefore misleading.

CAP issued guidance about the presentation of
mid-contract price increases in telecoms which took effect on 15
December 2023. It states that the presence and nature of
mid-contract price increases are material information that
consumers need to make informed transactional decisions. Therefore,
marketers must present it clearly and prominently to avoid ads
being misleading.

European Commission publishes long-awaited Digital
Fitness Check

The European Commission says that consumers are losing time and
money – various harmful commercial practices online cost EU
consumers at least €7.9 billion per year.

It has now published the findings of its Fitness Check of EU Consumer Law on Digital
Fairness, which aimed to discover if current EU consumer
protection laws are fit for purpose to ensure a high level of
protection in the digital environment. It says that consumer laws
need to be better adapted to the specific practices and challenges
that consumers face online. It says that the key challenges
are:

• dark patterns in online interfaces that can unfairly influence
  consumers’ decisions, for example, by putting unnecessary
  pressure on consumers through false urgency claims;




• addictive design of digital services that pushes consumers to
  keep using the service or spending more money, such as,
  gambling-like features in video games;




• personalised targeting that takes advantage of consumers’
  vulnerabilities, such as showing targeted advertising that exploits
  personal problems, financial challenges or negative mental
  states;




• difficulties with managing digital subscriptions, for example,
  when companies make it excessively hard to unsubscribe; and




• problematic commercial practices by social media
  influencers.

Following the Digital Fitness Check, the Commission says that it
will deal with the most harmful practices such as dark patterns. It
takes the view that increased legal certainty could prevent
regulatory fragmentation and promote fair growth. There is scope
for simplifying existing rules, without compromising the level of
protection as well as making sure that consumer and digital
regulation work together.

UK government unveils significant reforms to employment
rights

The UK government has published its Employment Rights Bill, which will have an
impact on employers and employees in every sector, including the
advertising and brands sectors.

Trade Marks

Court of Appeal illustrates correct approach to
similarity of trade marks and likelihood of confusion

In October 2023 a judgment of the High Court ruled that the use
of the sign PETSURE for pet insurance (and its registration in
class 36) did not infringe the earlier trade mark VETSURE
registered for the same services in the same class, and that the
later registration of PETSURE was not invalid. In a judgment handed
down almost exactly a year later, the Court of Appeal has now reversed those findings, the leading judgment
being given by Lord Justice Arnold. His reasoning provides some
useful clarification of the principles to be applied when assessing
the alleged similarity of two marks, and whether such similarity
could lead to a likelihood of confusion (and thus infringement
under section 10(2) of the Trade Marks Act 1994, and potential
invalidity under section 5(2)).

When it came to comparing the similarity (or otherwise) of
PETSURE and VETSURE, Arnold LJ accepted the High Court’s
finding that the two terms were “similar” in visual and
aural terms, but disagreed with its finding that they were not
conceptually similar. While pets and vets are different things, in
the context of pet insurance both were implicitly covering the cost
of veterinary services, and thus there was considerable conceptual
similarity. Even without that conceptual similarity, it would only
be in exceptional cases – where the concept of one of the
marks is so clearly distinct as to counteract any visual/aural
similarity – that the potential for confusion could be
excluded.

Likelihood of confusion (and potential invalidity of the later
PETSURE mark) would also depend upon how distinctive the earlier
VETSURE mark was found to be. The High Court had called the VETSURE
mark “descriptive”, but Arnold LJ criticised the
reasoning involved, which seemed to leap from the idea that the VET
and SURE elements were descriptive to the conclusion that their
combination was also descriptive. In the Court of Appeal’s
view, the portmanteau word created by combining the two elements
was inventive and thus inherently of low-to-moderate
distinctiveness, while its use in business meant that it also had
some acquired distinctiveness.

Lord Justice Arnold also criticised the High Court’s
assessment of likelihood of confusion between VETSURE and PETSURE.
The judge in the High Court had been rather dismissive of the
evidence submitted of veterinary customers displaying confusion
between the two policy names, calling them “mistakes” or
“administrative errors”, whereas Arnold LJ found some of
the examples cited to be illustrations of actual confusion.
Moreover the examples tended to show that the customers understood
the names to be brand-names, rather than purely descriptive. This
was not the kind of case in which the earlier mark was so
descriptive that just small differences would be sufficient to
avoid confusion.

Taking into account all of these points of difference with the
conclusions in the High Court, the Court of Appeal’s overall
assessment was that there was indeed a likelihood of confusion. In
light of the earlier VETSURE registration, the later registration
of the PETSURE mark was invalid, and the use of PETSURE had
infringed the VETSURE mark.

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.