Muzzled advertising watchdog gets its bark back
The Advertising Standards Authority of SA (ASA) has had a tough time lately. It’s been in business rescue since late 2016 and forced to undertake an industry funding drive to stay afloat, and had its jurisdiction and powers challenged in court by, among others, Herbex.
The ASA is a self-regulatory body set up by the advertising and marketing industries to establish and enforce standards and principles for advertising. It serves as a watchdog in the industry to ensure that advertising is informative, factual, honest, decent and legal.
Membership of the ASA is voluntary but many advertisers are, at least indirectly, members by virtue of their being members of industry bodies that are ASA members, such as the Association for Communication and Advertising, Print Media SA and the Direct Marketing Association of SA.
The ASA code sets out the principles to which advertising must adhere — for example, it should not contain misleading claims or claims that cannot be objectively substantiated.
Consumers and competitors may lodge complaints against advertising that contravenes these principles and the ASA adjudicates those matters and can impose sanctions ranging from withdrawal of the advertisement to referral to a disciplinary hearing. The system has worked reasonably well since the ASA was established in 1969.
Herbex, a manufacturer of slimming products and other complementary medicines, is no stranger to the ASA. Although not a member, it had been on the receiving end of several complaints, primarily from consumers unhappy with claims made about its products.
The company defended these allegations with varying degrees of success. Many complaints resulted in the ASA ordering it to withdraw or amend its advertising.
In 2013, following a complaint by serial complainer Dr Harris Steinmann, the ASA ruled that the name of Herbex’s Booster Eat Less product and claims made about it had not been substantiated and ordered Herbex to stop using the name and withdraw the claims.
Clearly fed up with repeatedly having to appear before the ASA, Herbex took the ASA to court, challenging its jurisdiction on the grounds that it had none over nonmembers and claiming that it had been induced to respond to complaints and defend itself at ASA hearings by misleading statements and nondisclosures in its standard letters.
Herbex also claimed that the ASA’s actions were unconstitutional, in violation of its rights of freedom of expression and trade, and that the organisation’s rulings against the company had adversely affected its reputation and damaged its business.
In May 2016, the High Court in Johannesburg ruled in favour of Herbex. It declared that all rulings issued by the ASA against Herbex were void. The court also interdicted the ASA from issuing any further rulings or adjudicating any complaints against Herbex or any other nonmember who did not submit to its jurisdiction.
The ASA appealed against the matter and the Supreme Court of Appeal handed down its decision in September. It declared, in an order to which both parties consented, that the ASA had no jurisdiction over any person or entity who was not a member and that the ASA may not, in the absence of submission to its jurisdiction, require nonmembers to participate in its processes, issue any instruction, order or rule against the nonmember or sanction it.
But the court also declared that the ASA may consider and issue a ruling to its members (which is not binding on nonmembers) on any advertisement regardless of who publishes it, to determine, on behalf of members, whether they should accept any advertisement before it is published or should withdraw any advertisement after it has been published.
The order has once again allowed the ASA to consider all advertising. While it cannot make a ruling against or sanction a nonmember, it can advise its members that certain advertising contravenes its code so that its members — including publishers, media owners, broadcasters — may choose not to accept the advertising for publication or withdraw it if it has already been published.
The ASA can hopefully now turn its full attention to becoming financially stable again. Its acting CEO Gail Schimmel has introduced major changes aimed at reducing operational expenditure and increasing transparency and good governance. The industry is also set to discuss a potential new funding model.
With these developments, it seems that the ASA is back on track to becoming the reliable industry watchdog it has always been.
THE ORDER HAS ALLOWED THE ASA TO ADVISE MEMBERS WHEN ADVERTISING CONTRAVENES ITS CODE