Consumer protection through responsible advertising

What is the Advertising Regulatory Board?

At the end of September, the Advertising Standards Authority of South Africa (ASA) was ordered to close its doors and liquidation proceedings were started. The industry refuses to sit by and allow self-regulation to die and has immediately started a new entity called the Advertising Regulatory Body.

Is the ARB binding on broadcasters?

The ASA derived its power primarily from the Electronic Communications Act which, in s55, makes adherence to the Code of Advertising Practice a prerequisite of licence conditions. The ASA was thus able to order broadcasters to withdraw any advertising ruled against.

In a stroke of thoughtful legal drafting, the ECA actually allows for a change of entity. The definition of Advertising Standards Authority states, “the entity which regulates the content of advertising, or any entity that replaces it but has the same functions.” In other words, the new entity will fall into this definition and still be binding. It is true that certain other regulations that recognise the ASA are not as thoughtfully drafted, and the ARB will have to lobby for regulatory recognition going forward.

Can I get MAC points?

How do the ASA and ARB tie up?

The starting point is that the ARB is a totally new legal entity with a new MOI and a new Board. However, because it takes over the administration of the Code of Advertising Practice, there are certain challenges regarding how previous rulings will be regarded.

The questions around this are best answered by referring to the MOI of the ARB which states:

3.1 The objects of the Company are to:

3.1.1. self-regulate the content of advertising in South Africa with quality decisions and fair process;

3.1.1  be a securely funded centre of excellence for self-regulation of advertising and associated industry needs and determine whether advertising contravenes the Code of Advertising Standards;

3.1.2 address and fill the lacuna left by the liquidation of the Advertising Standards Authority of South Africa (1995/000784/08), which lacuna creates a risk that consumers will be exploited, and the advertising and marketing industry will be brought into disrepute;

3.1.3 adopt and enforce, as far as reasonably possible, the existing and established Code of Advertising practice in the Republic (as administered until now by the Advertising Standards Authority of South Africa (1995/000784/08)), which sets out the rules which the marketing and advertising industry agree to follow, which indicates to the consumer and the public the steps that are taken to ensure, through self-imposed regulation, that advertisements can be trusted, and which provides a system of recourse for those who may have been harmed or prejudiced by an advertisement; ...

And

3.2  The members of the Company declare that:

3.2.1 They regard themselves as bound by, and hereby adopt as precedent, the principles of the decision-making organs of the Advertising Standards Authority of South Africa (1995/000784/08), as at the date that the aforementioned ceased to trade; and

3.2.2 All existing, binding decisions of the decision-making organs of the Advertising Standards Authority of South Africa (1995/000784/08) will continue in force and effect and will be given effect to by the Company.

3.2.3 They regard themselves as bound by, and undertake to bind their members, to the jurisdiction of the Company and the provisions of the Code of Advertising Practice. For the avoidance of doubt, the members acknowledge that any reference in the Advertising Code of Practice to the Advertising Standards Authority will be read as if it refers to the Company, mutatis mutandis...

What about the Herbex decision?

People familiar with the field of advertising law will want to know the effect of the decision in the Herbex matter, regarding the ASA’s jurisdiction over non-members. The ARB regards the principles in the outcome of the decision as binding on it and its members, given that it is a similar self-regulatory organisation, and has therefore incorporated the following into its MOI:

3.3 The Company has no jurisdiction over any person or entity who is not a member and may not, in the absence of a submission to its jurisdiction, require non-members to participate in its processes, issue any instruction, order or ruling against the non-member or sanction it. However, the Company may consider and issue a ruling to its members (which is not binding on non-members) regarding any advertisement regardless of by whom it is published, to determine on behalf of its members whether its members should accept any advertisement before it is published or should withdraw any advertisement if it has been published.

Will it be the same Code?

The Code of Advertising Practice has never been the property of the ASA but that of the industry, based largely on the International Codes. In addition, the Code carries a number of appendices that are written by and carried for member organisations. The industry is now appointing the ARB to administer this Code.

Like the ASA, the ARB will facilitate a code review process. The last process was completed under the ASA and will be published by LexisNexis shortly. The changes are live on the website.

Who is funding the ARB?

Does a non-member have to listen to the ARB?

No. The ARB is a self-regulatory, membership-based entity. It makes decisions for the guidance of its members and broadcasters.

When the ARB receives a complaint against a non-member, it will always give that company an opportunity to respond. If the company fails to respond, or indicates that it does not regard the ARB as binding, a decision will be made simply to guide the members and broadcasters.

However, the non-member should note that:

  • Broadcasters are bound in terms of the Electronic Communications Act;
  • Other media may be members or may regard the decision as binding on them.

How do I complain?

All your questions about complaints are answered here.

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