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Clifford Chance

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The Advertising Brief

Issue Two: October 2022

Advertising Intellectual Property Influencers Consumer 18 October 2022

Welcome to the second issue of the Advertising Brief in which we bring you the latest updates and rulings from the world of advertising regulation. Each quarter we will bring you concise summaries of the most interesting cases from the UK's Advertising Standards Authority (ASA) with our key takeaways for brand owners to be aware of.

In this issue we look at a variety of different media and products including video game streaming, podcasts, cryptoassets and even coffins. We have added new sections dedicated to regulatory developments and data protection issues in the advertising and marketing sphere that brand owners need to consider.

Contents

  • Samsung's smart watch advert runs into debate
  • Arsenal FC caught offside advertising fan tokens
  • Huel's podcast advert is not so sound
  • Games company sees the light: medical health claims require substantive evidence
  • Golden Leaves' eco-coffin advert dead and buried
  • DCMS report on influencer culture: Key changes to influencer marketing regulation to look out for
  • Is your marketing team asking "what's the issue with Google Analytics"? If not, maybe you should be!
  • Reform to Direct Marketing Rules in the UK

Recent ASA rulings to note

Article1-2xNight Runner

Samsung's smart watch advert runs into debate

Samsung's campaign to promote its new Smart Watch has 'run' into debate, with 27 complaints alleging the advert is irresponsible and harmful. Samsung's advert showed a woman waking up at 2am, checking her watch, and going for a jog through city streets, wearing Samsung's wireless earbuds and watch. She runs alone past different individuals and groups, with a voice-over at the end stating, "Sleep at night. Run faster. Push harder. Follow the herd. Not for me. I run on a different schedule. Mine."

Complainants said the advert was encouraging unsafe practices of women running alone at night and was tone-deaf given recent attacks on women while running. Samsung acknowledged the advert might be seen as insensitive and decided to pull it proactively. However, Samsung was unsure if the ad breached the Advertising Codes.

Samsung suggested that the advert was meant to be aspirational, and if the complaints were upheld it would suggest that women were socially irresponsible to go running at night, implying that the potential victim was the one at fault. When Clearcast originally approved the ad they considered the same issue, and explained that if Samsung's advert was not cleared it would be placing the fault of any violence on female runners rather than the perpetrators. It also noted that similar adverts featuring men running at night wearing headphones had previously been cleared without complaint.

The Cinema Advertising Association also weighed in, stating that they didn't believe the advert breached the Code. They felt that the woman featured was positively subverting unspoken gender norms, and women would aspire to be able to safely run in the streets after dark. They claimed that if the ad was ruled to be irresponsible on the grounds it is portraying an unsafe practice, it would create a dangerous precedent that women should not be in certain spaces or do certain things 'for their own safety'.

The ASA ultimately decided to not uphold the complaints. While it acknowledged the sensitivities surrounding recent similar high-profile cases, it considered that a woman running alone at night, by itself, is not likely to result in harm or injury. While an attack could happen, it was outside the person's control and could also occur in other everyday scenarios. It also noted that the woman in the ad appeared alert and was seen running in well-lit main streets with others around. The advert did not therefore encourage an unsafe practice and was not irresponsible.

Key takeaways:

  •  The ASA is unlikely to uphold complaints about adverts that include women in everyday scenarios, without explicit harm or risk.
  •  Advertisers should be mindful of the broader social context when creating adverts.

By Lauren Royers, Associate in the Intellectual Property team

london

Arsenal FC caught offside advertising fan tokens

In August 2021, Arsenal Football Club plc (Arsenal FC) posted a news article on its website titled "$AFC Fan Token: Everything you need to know", in which Arsenal FC announced that it had collaborated with Socios Services Limited (Socios) to create a platform that would allow its fans to "influence and engage with club decisions like never before" by launching an Arsenal FC 'fan token' known as $AFC. The website article stated that the fan tokens required the purchase of a cryptocurrency, Chiliz, and provided warnings about the potential loss of money invested.

The $AFC fan token can be acquired via socios.com, by exchanging the $AFC fan token with Chiliz ($CHZ), which is a cryptocurrency token built on top of the Ethereum blockchain. Acquiring $AFC fan tokens provides fans with "certain voting rights on official club decisions and the opportunity to earn real-life and digital club-related benefits and experiences".   There was both a free and a paid-for version of the fan token.

That same month, Arsenal FC posted on its Facebook page promoting its $AFC fan token. The Facebook post contained less information than the website post; it did not expressly refer to cryptocurrency or the risks of investing.

In August 2022, the ASA ruled that the adverts were misleading and breached the CAP Code for the following reasons:

1.   Although Arsenal FC argued that the Facebook advert was promoting only the free version of the fan token, the ASA held that the advert was contextualised by a series of social media posts promoting the paid-for tokens, and the fact that the advert appeared on the same day that paid-for fan tokens became available for sale;

2. Arsenal FC's Facebook advert did not include (i) any risk warning making consumers aware that paid-for fan tokens were cryptoassets (which are unregulated in the UK), and that cryptoassets could go down as well as up, or (ii) material information that paid-for fan tokens had to be exchanged with another cryptocurrency; and

3.   Arsenal FC's website advert included a risk warning, but the warning was not prominent (as it was at the bottom of the advert, which could be missed by consumers) and it did not state that paid-for fan tokens were cryptoassets.

The ASA also held that the adverts were irresponsible and breached the CAP Code as they trivialised investment in cryptoassets and took advantage of consumers' inexperience by not making clear that capital gains tax could be payable on profits from investing in paid-for fan tokens.

As a result, the ASA informed Arsenal FC that the adverts must not appear in the form complained about. At the time of writing, Arsenal FC's Facebook page advert appears to have been deleted. The advert on Arsenal FC's website (dated 6 August 2021) appears to have been updated to address ASA's concerns, as the advert is preceded by a prominent note which states that (i) $AFC fan tokens are a form of cryptoasset, (ii) to acquire the fan tokens, consumers need to purchase $CHZ and exchange this cryptocurrency for $AFC fan tokens, (iii) the value of cryptoassets are variable and can go down as well as up, (iv) cryptoassets are unregulated in the UK, and (v) capital gains tax may be payable on any profits made on the sale of cryptoassets.

Key takeaway:

  • Companies considering offering 'fan tokens' or other cryptoassets should ensure that any adverts relating to such offerings are not misleading and do not take advantage of consumers' inexperience.
  • Adverts should not be viewed in isolation. Instead, they should be assessed in the context of: (i) any other ads or posts released at around the same time and (ii) the timing of related product launches

By Sean Wood, Senior Associate in the Intellectual Property team

Microphone with waveform on red background, broadcasting or podcasting banner

Huel's podcast advert is not so sound

An advert for Huel meal replacements was heard during an episode of Steven Bartlett's podcast, The Diary of a CEO. The advert began around a third of the way through the episode 122, with the sound of a page turning. Bartlett then said "Quick one", before describing his experience of using Huel. At the end of the advert, Bartlett said, "Back to the podcast" and there was the sound of a page turning again. The complainant challenged whether this advert was obviously identifiable as such.

Two issues were explored by the ASA here: whether the communication was an "advert" in the ASA's remit and, if so, whether it was clearly identifiable as such.

Typically, two elements need to be present for a communication to be considered an advert: payment and control. Huel argued that although there was a financial arrangement in place with Bartlett, it had  no editorial control and any references to the brand were decided by Bartlett alone. Although a link to purchase Huel was included in the show description, this was not an affiliate link and Bartlett did not get any direct benefit from purchases made via this link.

Despite this, the ASA stated that as the podcast promoted Huel products and was directly connected to the supply of goods through the link in the description, this was a marketing communication that fell within its remit. It was also noted that Bartlett is a non-executive director of Huel and therefore had a commercial relationship to the brand in addition to the financial incentive for this podcast episode.

In relation to podcasts, the ASA advises that obvious changes in sound effects, tone and subject matter, or the use of different voices, may help consumers distinguish commercial breaks from the rest of the podcast. Huel argued that Bartlett had satisfied these requirements with the page turning sound, change in tone and more. However, the ASA said that beginning of the commercial section did not include any upfront wording that obviously identified it as an advert and the page turning sounds were quiet. The ASA therefore upheld the complaint. Bartlett has now updated the description of the podcast description to say "Sponsors: Huel - https://my.huel.com/Steven" at the very beginning.

Key takeaways:

  • Podcast listeners must be able to clearly distinguish between the podcast's regular programming and any sponsored material that may be interspersed throughout the show. This can be achieved through the context, sounds, signposting and more

By Laura Hartley, Associate in the Intellectual Property team

macro eyes web surfer and the office worker, insurance broker, workaholic, while working in the office evenings, control and security in the accesses, security, concept of internet web application.

Games company sees the light: medical health claims require substantive evidence

The ASA has ruled on an advert by games accessories company, Gamer Advantage LLC (GAL), recently broadcast during a livestream via Twitch. The advert was targeted at video game players and concerned GAL's blue-light filtering glasses. The glasses were asserted to stop the suppression of melatonin and improve sleep quality by filtering blue-light emitted by video console screens. The advert claimed that the benefits were 'clinically proven', and referenced 'our clinical trials'.

The complainant challenged that the claims in the advert were misleading and could not be substantiated. In response, GAL submitted various scientific literature as supporting evidence of its clinical claims, including a Masters' thesis, two scientific posters, news articles and an ophthalmologist's comments.

In its decision, the ASA held that there was little scientific evidence to prove that blue-light filtering lenses improved sleep quality. Accordingly, a substantive body of evidence was needed to prove the claims (e.g. clinical trials/studies; peer-reviewed publications etc.), a bar which had not been met by GAL's submitted evidence.  For example, neither the thesis or the posters had been published or peer reviewed.

Moreover, the news articles did not draw any definitive conclusions between blue-light filtering and improved sleep quality. Consequently, the ASA considered that the claims were misleading and had not been substantiated, thereby breaching the CAP Code general rules on misleading/substantiation and the specific rules concerning medical devices and health related products.

Key takeaway:

  • Any clinical, medical or health claims in an advert must be supported and substantiated by a reputable and empirical body of evidence (e.g. peer-reviewed/published literature; multiple clinical studies; large sample sizes etc.). Such evidence should be collected and reviewed prior to the launch of any advert and stored for future reference in the event of any complaints.

By Alex Walker, Senior Associate in the Intellectual Property team

Särge in einem Geschäft

Golden Leaves' eco-coffin advert dead and buried 

The ASA has ruled that certain marketing statements relating to coffins and funeral arrangements made by Golden Leaves Ltd were in breach of the CAP Code as they were unsubstantiated and misleading.

The statements in question, published on www.goldenleaves.com in November 2021, featured claims that customers could have a "green" and "environmentally-friendly funeral" as "the entire carbon footprint of a funeral service may be offset by tree planting in conservation areas or by donating funds to preserve endangered rainforests around the world". Golden Leaves Ltd also described certain coffins as "eco-friendly" and "green".

Golden Leaves Ltd responded by providing the ASA with a life cycle analysis of the coffins in question, stating that their environmental impact should be assessed holistically alongside their company practices and off-setting strategies. These include their use of recycled paper for promotional materials, their strategy to plant trees and their donations to rainforest conservation organisations.

The ASA responded by stating that Golden Leaves Ltd's unqualified statements would lead consumers to believe that these coffins had "either no or an overall beneficial impact on the environment" throughout their life cycle. Following their investigation, the ASA concluded that the life cycle analysis provided to them by Golden Leaves Ltd did not consider the full picture; it contained no evidence that any "type of burial or cremation would have a neutral or positive environmental benefit". This was deemed to be misleading.

The ASA also established that consumers would understand that the absolute claim made relating to a "green" and "environmentally-friendly" funeral would mean that "all aspects of the funeral and its lifecycle" would have a neutral or positive effect on the environment. The ASA were not provided with any evidence as to how this was calculated, nor could they establish whether Golden Leaves Ltd strategies were credible. The claims were therefore deemed to be unsubstantiated and misleading.

Key takeaways:

  • Adverts must not state or imply net neutral or positive environmental benefits unless they are substantiated with evidence across their whole life cycle
  • Adverts must communicate clearly to consumers the basis for environmental claims.

By Yousif Alawoad, Trainee in Structured Debt and Real Estate Finance team

Advertising Regulation Updates

Fashion blogger woman in jeans and turtleneck showing casual colorful shirts on camera. Stylist influencer girl showing trendy clothes filming vlog episode for her channel. Opinion leader sets trends.

DCMS report on influencer culture: Key changes to influencer marketing regulation to look out for

In May 2022, the UK's Department for Culture, Media and Sport (DCMS) published the findings of its influencer culture investigation. The report called on the government to increase regulation this sector, including by conducting a market review into the influencer ecosystem, reforming existing influencer marketing regulation, giving additional powers to advertising authorities, and enacting more protective measures for children and online personalities on social media platforms.

The government published its response in late September 2022, which acknowledged the concerns raised by DCMS but did not accept the need for amendments to existing or upcoming legislation (such as the Online Safety Bill and Digital Markets, Competition and Consumer Bill) regarding reporting and complaints mechanisms for online harassment.

Similarly, although the government stated it does not intend to undertake a market review of the influencer ecosystem, it will work with key industry bodies to develop a new code of conduct for influencers, brands and agencies working in this space. Such a code would promote certain best practices and may see the introduction of certain industry standards.

The report had recommended that the ASA amend the CAP Code, and that the ASA be given statutory powers to enforce the CAP Code. The government response referred to the recent Online Advertising Programme (OAP) consultation, and reserved its position as to whether the ASA would be given statutory powers pending the outcome of the OAP consultation. The response also agreed with the report's recommendation that the CMA be given greater enforcement powers, referring to the existing draft Digital Markets Bill.

Finally, the Government confirmed that it is open to exploring legislative improvements to better protect child influencers engaged in this space, to prevent child exploitation.

Key takeaway:

  • The key advertising regulation bodies, the Advertising Standards Authority and the Competition and Markets Authority, may be given greater statutory powers to better regulate influencer marketing.
  • The employment of child influencers is coming under greater scrutiny and legislative measures to improve protection of these children may be introduced.
  • The government and other relevant bodies will be developing a new code of conduct for influencers, brands and agencies, which may introduce industry standards. However, it will not conduct a market review.

By Laura Hartley, Associate in the Intellectual Property team

Modern digital marketing on the tablet

Is your marketing team asking "what's the issue with Google Analytics"? If not, maybe you should be!

Google Analytics is a crucial tool for any online business as it provides statistics and analytics tools to understand online performance. Despite the benefits this provides to businesses in being able to understand user behaviour, for websites in the EU/UK, the use of Google Analytics is considered problematic on two fronts:

1. Numerous Data Protection Authorities (DPAs) consider that analytics cookies are never "strictly necessary", so consent must always be obtained from the user. This can distort the value of analytics data collected, as only a proportion of users will consent to cookies.

2. The use of Google Analytics can involve the transfer of unencrypted personal data from the operator of the website to Google in the US without "appropriate safeguards". The Austrian, French (See our article Google Analytics declared illegal in France), Italian and Danish DPAs have found that the use of Google Analytics by website operators breaches the GDPR due to personal data being unlawfully transferred from the website operator (as data exporter) to Google Analytics in the US (as data importer).

Key takeaways:

  • If GDPR regulated businesses are to continue using the Unified Analytics (UA) version of Google Analytics, consideration of the configuration of the service is crucial to mitigate the GDPR enforcement risk.
  • Options available to GDPR regulated businesses (at the moment) are:
    • migrating to a local (i.e. EU-based) web analytics vendor which avoids the transfer of personal data to the US; or
    • migrating to "Google Analytics 4" (GA4), a wholly new model that does not rely on session-based identifiers. While GA4 is an improvement over UA in respect of GDPR compliance, GA4 does not address the ability of the US authorities to access personal data in Google's hands.

By James Wong, Lauren Murphy and Hari Pannum in the Tech // Digital team

Direct Marketing

Reform to Direct Marketing Rules in the UK

The UK's Data Protection and Digital Information Bill (Bill) (see our Keeling Schedules*) was laid before UK Parliament on 18 July 2022, marking a significant step in the UK's post-Brexit reform of its data protection regime.

Important Note: Following Liz Truss' appointment as Prime Minister on 6 September 2022, the Bill's passage through the legislative process has been suspended, pending further consideration. No date has yet been set for the Bill's second reading. On 3 October 2022, in a speech at the Conservative Party Conference, new digital secretary Michelle Donelan suggested that the UK GDPR will be replaced by a new ‘business and consumer-friendly, British data protection system’. What this means for the Bill’s content and passage through Parliament is currently unclear.

There are five key changes with respect to direct marketing in the Bill:

1. The Bill introduces a new consent framework for direct marketing

The new framework will widen situations where tracking technologies can be used without the end user's consent. However, the option to opt out will still be required. The exceptions to 'opt-in' consent cover a number of "low risk" privacy situation, such as:

  • Information related to service improvements or website / app improvements
  • Information that would allow website / app appearance or functions to: adapt to the preferences of the subscriber or user; or enable an enhancement of the appearance or functionality of the website / app when displayed on, or accessed by, the device
  • Information required for software updates for security of the device
  • Communications related to emergency assistance
  • Technical storage and access to information in circumstances that are strictly necessary.

2. Centralised opt-out technology

The Bill, if enacted, will also give the Secretary of State the power to ensure sufficient availability of technology that enables subscribers or users to effectively express their consent preferences (such as browser and device supplier opt-outs).

3. Duty to notify of direct marketing breaches

The Bill introduces a duty to notify for electronic communication service and public communication network providers who have reasonable grounds for suspecting that a breach of PECR might be occurring to report it to the Information Commissioner within 28 days of first becoming aware of such breaches.

4. Raises the bar for penalties

Under the Bill, the ICO also receives updated enforcement powers for consent infringements, bringing them in line with remedies for data protection infringements in the GDPR.

5. Clarifies the definition of Direct Marketing

While framed as a clarification, it is important to note that the Bill acts to import the definition of Direct Marketing from the Data Protection Act to PECR.

Key takeaways:

  • Companies should consider their to these reform proposals – engage with the relevant industry body; and
  • Companies need to start considering the impact of the reform on its organisation.

By James Wong, Lauren Murphy and Chris Ireland in the Tech // Digital team

*What is a Keeling Schedule?  When a Bill proposes amendments to important pieces of primary and secondary legislation, it is common practice for HMG to prepare a redline showing the proposed amendments.  It's named after a Parliamentarian who thought of the idea over fifty years before anyone ever uttered the words "track changes". To assist stakeholders in understanding the changes to legislation proposed by the draft Data Protection and Digital Information Bill, Clifford Chance has produced Keeling Schedules of the UK GDPR, the Data Protection Act 2018 and the Privacy and Electronic Communications (EC Directive) Regulations 2003.

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