The Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) have published a consultation on proposed amendments to the UK advertising rule book, the CAP and BCAP Codes, with comments due by 5 February 2025. The proposed amendments to the Codes reflect upcoming changes to the underlying legislation that forms the basis of the Codes. Specifically, certain provisions of the Digital Markets, Competition and Consumers Act 2024 (DMCC), which comes into force in April 2025, will revoke and replace the current provisions of the Consumer Protection from Unfair Trading Regulations 2008. We have previously summarised the changes that will be brought about by the DMCC.
The proposed amendments to the wording and definitions of the Codes are intended to bring them in line with the new legislation. In addition, however, CAP and BCAP have taken a streamlined approach and suggested other changes where they have identified that the wording of the Codes could better align with other and pre-existing legislation (including rules on comparative advertising).
This will be the most significant update to the Codes in recent times as a result of changes to the underlying legislation relating to the Codes.
What could be changed?
The key proposed changes to the Codes relate to the following:
- A new unfair commercial practice relating to the omission of material information from a price statement (including information on mandatory and optional fees, aimed at tackling online 'drip pricing').
- A new prohibited practice of fake consumer reviews.
- A broader prohibited practice of falsely claiming to cure illness.
- Consideration of a commercial practice's effect on vulnerable groups of consumers.
- Definition of the transactional decision test which is applied when determining if a marketing communication is misleading. The rules have been updated to reflect the DMCC's wording of the test, and to clarify when the test should be applied, as some practices are prohibited in all circumstances, and therefore the transactional decision test would then not be applied (eg it will always be deemed unfair to omit certain information from marketing communications which quote prices for advertised products).
Businesses will need to monitor the status of these changes and any accompanying guidance to ensure compliance with the ASA's rules, especially in light of its increased review of ads through the use of AI, and the Competition and Markets Authority's (CMA's) new enforcement powers under the DMCC. For example, breaching the provisions in the DMCC (which will be contained in the Code) could lead to significant financial penalties, up to the higher of 10% of a business's global annual turnover or £300,000.
Omission of material information
The proposed amendments reflect the changes set out in the DMCC by:
- Prohibiting the omission of material information (as defined in the DMCC), or information required by law, in marketing communications. An omission would include providing information in a way that is unclear or untimely, or in a way that a consumer is unlikely to see or hear it (however, the ASA will consider limitations as to time and space, and steps taken by marketers to overcome these).
- Requiring the total price of a product stated includes all non-optional charges – only optional charges may be stated separately from the price itself.
- Providing that omitting material information from an invitation to purchase (as defined by the DMCC) is an unfair commercial practice.
The Codes currently contain a prescribed list of information that must not be omitted from marketing communications which quote prices for advertised products. The proposed amendments by CAP/BCAP reflect the DMCC's change of not requiring assessment of the impact on an average consumer (ie, by not requiring the transactional decision test to be applied) when assessing whether information on the prescribed list has been omitted, as such an omission will always be unfair. The proposed amendments to the prescribed list include deeming the omission of the following as unfair:
- Certain information relating to marketers, including their email address.
- The total price of the product, and any related fees, taxes, payments and charges that the consumer will incur but which cannot be calculated in advance (and if they cannot be calculated in advance, how they will be).
- Other freight, delivery or postal charges, including taxes which are not included in the total price of the product but which the consumer may choose to incur (or if they cannot be reasonably calculated, the fact that they may be payable).
Prohibited practice on fake consumer reviews
New rules are proposed to reflect the forthcoming prohibition on fake consumer reviews, with further guidance to be published on these. CAP/BCAP have stressed that they have ensured their changes stay within their regulatory remit; ie only applying to marketing communications within the scope of the Codes. In addition, the new rules:
- Define a 'consumer review' as a review of a product, a trader or any other matter relevant to a transactional decision.
- Define a 'fake consumer review' as a consumer review that purports to be, but is not, based on a person's genuine experience.
- Require marketing communications to be clear when consumer reviews have been incentivised.
- Provide examples of when publishing consumer reviews would be misleading – eg, not publishing or removing negative reviews, giving more emphasis on positive reviews than negative ones, and omitting relevant information as to the context of a consumer review (such as if the reviewer has been commissioned).
False claims as to curing illness
In line with the DMCC, CAP/BCAP have suggested widening the prohibition of false claims by marketers to include false claims as to modifications to a person's appearance or their physiological function. The amendments also revise the wording of the relevant rule to cover preventing and treating ailments (ie not just curing).
Vulnerable groups
The present text of the Codes provide that a communication has a "commercial effect" on vulnerable groups where it is likely to affect the economic behaviour only of a clearly identifiable group of people who are especially vulnerable in a way which the advertiser could reasonably foresee.
The proposed revised text:
- Broadens the scope of "commercial effect" to remove the limitations of only and clearly. This change will allow the ASA to consider an advert's likely impact on a particular vulnerable group if it has reason to believe that this would particularly affect that group – even if the advert is not specifically aimed at them, but at a wider audience.
- Updates the basis of vulnerability to refer to "mental and physical health" instead of "infirmity" and will account for vulnerability due to circumstances. Further guidance may be published on this.
Definition of the transactional decision test
The transactional decision test is engaged by most rules in Section 3 of the Codes relating to misleading advertising. Marketing communications are considered misleading if they are likely to deceive consumers and/or are likely to cause consumers to take transactional decisions that they would not otherwise have taken.
The DMCC broadens the test for defining a transactional decision, though CAP/BCAP acknowledge that the new wording proposed to reflect this is unlikely to have a significant impact on the application of the Codes. Emphasis is placed on the addition of a consumer's decision to 'supply' a product, as individuals acting in a capacity to supply goods or services for mainly non-business purposes to a person who receives them for business purposes will still be considered a consumer.
CAP/BCAP have also proposed to amend the wording of the Codes to reflect the DMCC's definition of the transactional decision test – eg, in Rule 3.6 of the Codes, "must not imply" is proposed to be amended to "must not mislead by implying". Other amended rules will adopt this same approach.
Business Protection from Misleading Marketing Regulations 2008 (BPRs)
To better align with the rules on comparative advertising, specifically Regulation 4(f) of the BPRs, the following text in bold and underline in Rule 3.40 is proposed: "marketing communications that include a comparison with an identifiable competitor must not discredit or denigrate another product, marketer, trade mark, trade name or other distinguishing mark". Meanwhile, in Rule 3.34, it is clarified that the BPRs permit comparison of products with the same 'needs' (as opposed to singular 'need'). This reflects the commitment to ensuring that the Codes accurately reflect the underlying legislation on comparative advertising.
Moving forward
Mishcon de Reya's Advertising & Marketing group are keeping a close eye on the outcome of the consultation and will report further once this has been published, along with further updates from the CMA as to the outcome of its own consultation on unfair commercial practices.