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Business Ethics MGT610

LESSON 43

The self-regulatory system comprises three bodies: the Advertising Standards

Authority (ASA), the Advertising Standards Board of Finance (ASBOF) and the Committee of

Advertising Practice (CAP). Their work is described below.

60.2 The strength of the system depends on the long-term commitment of all those involved in

advertising, sales promotions and direct marketing (marketing).

Practitioners in every sphere share an interest in seeing that marketing communications are

welcomed and trusted by their audience; unless they are accepted and believed they cannot

succeed. If they are offensive or misleading they discredit everyone associated with them and

the industry as a whole.

60.3 The Code and all ASA rulings together with ASA and CAP guidance on a wide range of

topics are available on www.asa.org.uk and www.cap.org.uk. The

ASA and CAP update their websites regularly.

In the UK, the British Code of Advertising, Sales Promotion and Direct Marketing (the Code)

is the rule book for non-broadcast advertisements, sales promotions and direct marketing

communications (marketing communications). The Code is primarily concerned with the

content of marketing communications and not with terms of business or products themselves.

Some rules, however, go beyond content, for example those that cover the administration of

sales promotions, the suitability of promotional items, the delivery of products ordered through

an advertisement and the use of personal information in direct marketing. Editorial content is

specifically excluded from the Code, though it might be a factor in determining the context in

which marketing communications are judged.

The Committee of Advertising Practice (CAP) is the self-regulatory body that creates, revises

and enforces the Code. CAP's members include organizations that represent the advertising,

sales promotion, direct marketing and media businesses. Through their membership of CAP

member organizations, or through contractual agreements with media publishers and carriers,

those businesses agree to comply with the Code so that marketing communications are legal,

decent, honest and truthful and consumer confidence is maintained.

Some CAP member organizations, for example the Direct Marketing Association and the

Proprietary Association of Great Britain, also require their members to observe their own codes

of practice. Those codes may cover some practices that are not covered in this Code. The Code

supplements the law, fills gaps where the law does not reach and often provides an easier way

of resolving disputes than by civil litigation or criminal prosecution. In many cases, self-

regulation ensures that legislation is not necessary. Although advertisers, promoters and direct

marketers (marketers), agencies and media may still wish to consult lawyers, compliance with

the Code should go a long way to ensuring compliance with the law in areas covered by both

the Code and the law. By creating and following self-imposed rules, the marketing community

produces marketing communications that are welcomed and trusted. By practicing self-

regulation, it ensures the integrity of advertising, promotions and direct marketing.

The value of self-regulation as an alternative to statutory control is recognized in EC

Directives, including those on misleading and comparative advertising (Directives 84/450 and

97/55 EC), and self-regulation is accepted by the Department of Trade and Industry and the

Office of Fair Trading as a first line of control in protecting consumers.

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The Advertising Standards Authority (ASA) is the independent body that endorses and

administers the Code, ensuring that the self-regulatory system works in the public interest. The

ASA's activities include investigating and adjudicating on complaints and conducting research.

A leaflet describing the ASA's complaints procedure is available on request and full

information

is available on www.asa.org.uk.

The vast majority of advertisers, promoters and direct marketers comply with the Code. Those

that do not may be subject to sanctions. Adverse publicity may result from the rulings

published by the ASA weekly on its website. The media, contractors and service providers may

withhold their services or deny access to space. Trading privileges (including direct mail

discounts) and recognition may be revoked, withdrawn or temporarily withheld. Pre-vetting

may be imposed and, in some cases, non-complying parties can be referred to the Office of Fair

Trading for action, where appropriate, under the Control of Misleading Advertisements

Regulations. The system is structured so that it does not operate in an unfair or anti-competitive

manner or restrict free speech unjustifiably. ASA decisions are subject to independent review,

including in exceptional cases by the Administrative Division of the High Court. The full text

of the Code is available on www.cap.org.uk. Copyright The Committee of Advertising Practice

2005.

MEMBERS OF THE COMMITTEE OF ADVERTISING PRACTICE

Advertising Association

Broadcast Advertising Clearance Centre

Cinema Advertising Association

Direct Marketing Association

Direct Selling Association

Incorporated Society of British Advertisers

Institute of Practitioners in Advertising

Institute of Sales Promotion

Interactive Advertising Bureau

Mail Order Traders Association

Newspaper Publishers Association

Newspaper Society

Outdoor Advertising Association

Periodical Publishers Association

Proprietary Association of Great Britain

Radio Advertising Clearance Centre

Royal Mail

Scottish Daily Newspaper Society

Scottish Newspaper Publishers Association

INTRODUCTION

This eleventh edition of the Code comes into force on 4 March 2003. It replaces all previous

editions.

The Code applies to:

Advertisements in newspapers, magazines, brochures, leaflets, circulars, mailings, e-mails, text

transmissions, fax transmissions, catalogues, follow-up literature and other electronic and

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printed material posters and other promotional media in public places, including moving

images

- Cinema and video commercials

- Advertisements in non-broadcast electronic media, including online advertisements in

paid-for space (e.g. banner and pop-up advertisements)

- View data services

- Marketing databases containing consumers' personal information

- Sales promotions

- Advertisement promotions

The Code does not apply to:

a. Broadcast commercials. (The BCAP Advertising Standards Codes set out the rules that

govern broadcast advertisements on any television channel and radio station licensed by

Ofcom.)

b. The contents of premium rate services, which are the responsibility of the Independent

Committee for the Supervision of Standards of Telephone Information Services (ICSTIS);

marketing communications that promote these services are subject to ICSTIS regulation

and to the Code

c. Marketing communications in foreign media. Direct marketing that originates outside the

UK but is targeted at UK consumers will be subject to the jurisdiction of the relevant

authority in the country where it originates so long as that authority operates a suitable

cross-border complaint system. If it does not, the ASA will take what action it can. All

members of the European Union, and many non-European countries, have self-regulatory

organizations that are members of the European Advertising Standards Alliance (EASA).

EASA co-ordinates the cross-border complaints system for its members (which include the

ASA).

d. Health-related claims in marketing communications addressed only to the medical, dental,

veterinary and allied professions

e. Classified private advertisements, including those appearing online

f. Statutory, public, police and other official notices/information, as opposed to marketing

communications, produced by public authorities and the like

g. Works of art exhibited in public or private

h. Private correspondence, including correspondence between companies and their customers

about existing relationships or past purchases

i. Live oral communications, including telephone calls

j. Press releases and other public relations material, so long as they do not fall under 1.1

above

k. Editorial content, for example of the media and of books

l. Regular competitions such as crosswords

m. Fly posting (most of which is illegal)

n. Packages, wrappers, labels, tickets, timetables and price lists unless they advertise another

product, a sales promotion or are visible in a marketing communication

o. Point of sale displays, except those covered by the sales promotion rules and the rolling

paper and filter rules

p. Election advertisements as defined in clause 12.1

q. Website content, except sales promotions and advertisements in paid-for space

r. Sponsorship; marketing communications that refer to sponsorship are covered by the Code

s. Customer charters and codes of practice.

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These definitions apply to the Code:

a. A product encompasses goods, services, ideas, causes, opportunities, prizes or gifts

b. A consumer is anyone who is likely to see a given marketing communication, whether in

the course of business or not

c. The United Kingdom rules cover the Isle of Man and the Channel Islands

d. A claim can be implied or direct, written, spoken or visual

e. The Code is divided into numbered clauses

f. A marketing communication includes all forms of communication listed in 1.1

g. A marketer includes an advertiser, promoter or direct marketer

h. A supplier is anyone who supplies products that are sold by distance selling

i. marketing communications (and may also be the marketer)

j. A child is anyone under 16.

k. A corporate subscriber includes corporate bodies such as limited companies in the UK,

limited liability partnerships in England, Wales and N. Ireland or any partnerships in

Scotland. It also includes schools, hospitals, Government departments or agencies and other

public bodies. It does not include sole traders or non-limited liability partnerships in

England, Wales and N. Ireland.

These criteria apply to the Code:

a. The ASA Council's interpretation of the Code is final

b. Conformity with the Code is assessed according to the marketing communication's

probable impact when taken as a whole and in context. This will depend on the medium in

which the marketing communication appeared, the audience and its likely response, the

nature of the product and any additional material distributed to consumers

c. The Code is indivisible; marketers must conform with all appropriate rules

d. The Code does not have the force of law and its interpretation will reflect its flexibility. The

Code operates alongside the law; the Courts may also make rulings on matters covered by

the Code

e. An indication of the statutory rules governing marketing is given on www.cap.org.uk;

professional advice should be taken if there is any doubt about their application

f. No spoken or written communications with the ASA or CAP should be understood as

containing legal advice

g. The Code is primarily concerned with the content of advertisements, promotions and direct

marketing communications and not with terms of business or products themselves. Some

rules, however, go beyond the content, for example those that cover the administration of

sales promotions, the suitability of promotional items, the delivery of products ordered

through an advertisement and the use of personal information in direct marketing. Editorial

content is specifically excluded from the remit of the Code (see 1.2k), although it might be

a factor in determining the context in which marketing communications are judged.

h. The rules make due allowance for public sensitivities but will not be used by the ASA to

diminish freedom of speech unjustifiably

i. The ASA does not arbitrate between conflicting ideologies.

GENERAL RULES

Principles

2.1 All marketing communications should be legal, decent, honest and truthful.

2.2 All marketing communications should be prepared with a sense of responsibility to

consumers and to society.

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2.3All marketing communications should respect the principles of fair competition generally

accepted in business.

2.4 No marketing communication should bring advertising into disrepute.

2.5 Marketing communications must conform with the Code. Primary responsibility for

observing the Code falls on marketers. Others involved in preparing and publishing marketing

communications such as agencies, publishers and other service suppliers also accept an

obligation to abide by the Code.

2.6 Any unreasonable delay in responding to the ASA's enquiries may be considered a breach

of the Code.

2.7 The ASA and CAP will on request treat in confidence any genuinely private or secret

material supplied unless the Courts or officials acting within their statutory powers compel its

disclosure.

2.8 The Code is applied in the spirit as well as in the letter.

Substantiation

3.1 Before distributing or submitting a marketing communication for publication, marketers

must hold documentary evidence to prove all claims, whether direct or implied, that are capable

of objective substantiation. Relevant evidence should be sent without delay if requested by the

ASA or CAP. The adequacy of evidence will be judged on whether it supports both the detailed

claims and the overall impression created by the marketing communication. The full name and

geographical business address of marketers should be provided without delay if requested by

the ASA or CAP.

3.2 If there is a significant division of informed opinion about any claims made in a marketing

communication they should not be portrayed as generally agreed.

3.3 Claims for the content of non-fiction books, tapes, videos and the like that have not been

independently substantiated should not exaggerate the value, accuracy, scientific validity or

practical usefulness of the product.

3.4 Obvious untruths or exaggerations that are unlikely to mislead and incidental minor errors

and unorthodox spellings are all allowed provided they do not affect the accuracy or perception

of the marketing communication in any material way.

Legality

4.1 Marketers have primary responsibility for ensuring that their marketing communications are

legal. Marketing communications should comply with the law and should not incite anyone to

break it.

Decency (i.e. avoiding serious or widespread offence)

5.1 Marketing communications should contain nothing that is likely to cause serious or

widespread offence. Particular care should be taken to avoid causing offence on the grounds of

race, religion, sex, sexual orientation or disability.

Compliance with the Code will be judged on the context, medium, audience, product and

prevailing standards of decency.

5.2 Marketing communications may be distasteful without necessarily conflicting with 5.1

above. Marketers are urged to consider public sensitivities before using potentially offensive

material.

5.3 The fact that a particular product is offensive to some people is not sufficient grounds for

objecting to a marketing communication for it.

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Honesty

6.1 Marketers should not exploit the credulity, lack of knowledge or inexperience of

consumers.

Truthfulness

7.1 No marketing communication should mislead, or be likely to mislead, by inaccuracy,

ambiguity, exaggeration, omission or otherwise.

Matters of opinion

8.1 Marketers may give a view about any matter, including the qualities or desirability of their

products, provided it is clear that they are expressing their own opinion rather than stating a

fact. Assertions that go beyond subjective opinions.

Fear and distress

9.1 No marketing communication should cause fear or distress without good reason. Marketers

should not use shocking claims or images merely to attract attention.

9.2 Marketers may use an appeal to fear to encourage prudent behavior or to discourage

dangerous or ill-advised actions; the fear likely to be aroused should not be disproportionate to

the risk.

Safety

10.1 Marketing communications should not condone or encourage unsafe practices. Particular

care should be taken with marketing communications addressed to or depicting children (see

section 47).

10.2 Consumers should not be encouraged to drink and drive. Marketing communications

should, where appropriate, include a prominent warning on the dangers of drinking and driving

and should not suggest that the effects of drinking alcohol can be masked.

Violence and anti-social behavior

11.1 Marketing communications should contain nothing that condones or is likely to provoke

violence or anti-social behavior.

Political advertising

12.1 Any advertisement or direct marketing communication, whenever published or distributed,

whose principal function is to influence voters in local, regional, national or international

elections or referendums is exempt from the Code.

12.2 There is a formal distinction between Government policy and that of political

parties. Marketing communications (see clauses 1.1 and 1.2) by central or local government, as

distinct from those concerning party policy, are subject to the Code.

Protection of privacy

13.1 Marketers should not unfairly portray or refer to people in an adverse or offensive way.

Marketers are urged to obtain written permission before:

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a. Referring to or portraying members of the public or their identifiable possessions; the

use of crowd scenes or general public locations may be acceptable without permission

b. Referring to people with a public profile; references that accurately reflect the contents

of books, articles or films may be acceptable without permission

c. Implying any personal approval of the advertised product; marketers should recognize

that those who do not wish to be associated with the product may have a legal claim.

13.2 Prior permission may not be needed when the marketing communication contains nothing

that is inconsistent with the position or views of the person featured.

13.3 References to anyone who is deceased should be handled with particular care to avoid

causing offence or distress.

13.4 Members of the Royal Family should not normally be shown or mentioned in marketing

communications without their prior permission. Incidental references unconnected with the

advertised product, or references to material such as books, articles or films about members of

the Royal Family, may be acceptable.

13.5 The Royal Arms and Emblems should be used only with the prior permission of the Lord

Chamberlain's office. References to Royal Warrants should be checked with the Royal Warrant

Holders' Association.

Testimonials and endorsements

14.1 Marketers should hold signed and dated proof, including a contact address, for any

testimonial they use. Unless they are genuine opinions taken from a published source,

testimonials should be used only with the written permission of those giving them.

14.2 Testimonials should relate to the product being advertised.

14.3 Testimonials alone do not constitute substantiation and the opinions expressed in them

must be supported, where necessary, with independent evidence of their accuracy. Any claims

based on a testimonial must conform to the Code.

14.4 Fictitious testimonials should not be presented as though they are genuine.

14.5 Unless they are genuine statements taken from a published source, references to tests,

trials, professional endorsements, research facilities and professional journals should be used

only with the permission of those concerned.

14.6 Marketers should not refer in marketing communications to advice received from CAP or

imply any endorsement by the ASA or CAP.

Prices

(see CAP Help Notes on Lowest Price Claims and Price Promises and on Retailers' Price

Comparisons)

15.1 Any stated price should be clear and should relate to the product advertised.

Marketers should ensure that prices match the products illustrated (see 48.7).

15.2 Prices quoted in marketing communications addressed to the public should include VAT

and other non-optional taxes and duties imposed on all buyers. In some circumstances, for

example where marketing communications are likely to be read mainly by businesses able to

recover VAT, prices may be quoted exclusive of VAT or other taxes and duties, provided

prominence is given to the amount or rate of any additional costs.

15.3 If the price of one product is dependent on the purchase of another, the extent of any

commitment by consumers must be made clear.

15.4 Price claims such as `up to' and `from' should not exaggerate the availability of benefits

likely to be obtained by consumers.

15.5 A recommended retail price (RRP), or similar, used as a basis of comparison should be

genuine; it should not differ significantly from the price at which the product is generally sold.

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Availability of products

16.1 Marketers must make it clear if stocks are limited. Products must not be advertised unless

marketers can demonstrate that they have reasonable grounds for believing that they can satisfy

demand. If a product becomes unavailable, marketers will be required to show evidence of

stock monitoring, communications with outlets and swift withdrawal of marketing

communications whenever possible.

16.2 Products which cannot be supplied should not normally be advertised as a way of

assessing potential demand unless it is clear that this is the purpose of the marketing

communication.

16.3 Marketers must not use the technique of switch selling, where their sales staff criticizes

the advertised product or suggest that it is not available and recommend the purchase of a more

expensive alternative. They should not place obstacles in the way of purchasing the product or

delivering it promptly.

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