Advertising watchdog may dismiss competitor complaints without investigation

Out-Law News | 17 Oct 2011 | 9:41 am | 3 min. read

The UK's advertising watchdog may not investigate complaints businesses make about rivals' adverts if the complaining firms have not tried to resolve the disputes with their competitors first.

The Advertising Standards Authority (ASA) told Out-Law.com that it could consider not investigating advertising complaints if "reasonable steps" have not been taken to settle differences before the complaint is registered with it.

"Where a company has not sought to resolve an issue with their competitor before approaching the ASA it is not an absolute that we will reject their complaint," ASA said in a statement.

"However, in almost all circumstances we would expect a company to have tried to raise their concerns with their competitor before lodging a complaint with us. When they haven’t we will take a view on whether we will reject the complaint," it said.

"Companies who want to lodge a complaint about a competitor should take reasonable steps to resolve their differences before contacting the ASA. This is because repeated and/or tit-for-tat complaints are costly for companies, for the good standing of their sector and for the reputation of self-regulation more generally. If the ASA considers that there is a potential problem under the Advertising Code then it can and will launch an investigation irrespective of whether a company has tried to resolve it with their competitor in the first instance," the watchdog said.

In a response to the organisations' 'Process Review', ASA detailed the measures businesses should take when they have a grievance with rivals' adverts and said the new procedures will come into effect from 1 December this year.

Firms should contact rivals with details of their complaint and where it believes its competitor is in breach of advertising rules, the watchdog said. Complaints should only be passed on to ASA if the dispute cannot be resolved, it said.

ASA oversees compliance with the Committee of Advertising Practice (CAP) Code and the Broadcast Committee of Advertising Practice (BCAP) Code. The Codes set out rules on advertising, including prohibiting ads that are misleading or make unsubstantiated claims.

"Companies must normally demonstrate that they have attempted to resolve their differences with the advertiser before the ASA involves itself in the complaint," ASA said in its final response (Click through for 34-page / 218KB PDF) to a review of its process.

"In the first place, the complainant should raise their concerns with the advertiser by registered post. The correspondence must provide an appropriate level of detail about the claim and the media in which the ad appeared, together with the factual basis for the complaint and, preferably, reference to the relevant Code rules; the advertiser must be able to identify the advertisement and understand what is alleged," it said.

"The complainant should allow five working days for a response. If, at the end of that period; the advertiser has not responded; the complainant has other reasonable cause to believe that the advertiser will not act within a reasonable timeframe or in good faith in response to the complaint or the parties cannot reach an agreement, the complainant should notify the ASA who will accept and, if appropriate, progress the complaint," ASA said.

Complaining businesses will have to provide ASA with documental evidence of how they attempted to resolve disputes, the watchdog said.

The introduction of the new procedure follows a year in which ASA reported a hike in the number of complaints it has had to deal.

In March the CAP Code was changed, expanding the number of mediums in which ads would be subject to the Code's rules. The changes mean that ads that appear on company websites and social networking accounts must comply with the Code. ASA has admitted that the increased workload has put extra burden on staff dealing with complaints.

ASA said that competitor complaints between rivals were "relatively more time consuming, complex and expensive to administer" and "proportionately more commonplace" than other categories of complaints it receives.

The new procedure should not "unduly dissuade" companies from registering complaints with ASA but are "intended to help the ASA deal with competitor complaints effectively, efficiently and cost-effectively," it said.

ASA also said that it was implementing measures it hopes will reduce the time it takes to complete formal complaint investigations and reported that it had recorded between an 8% increase in the number of complaints that had been dealt with informally in the year up to June 2011, with 72% of complaints ASA receives now been resolved without formal investigations.