From 1 March 2011 the remit of the Advertising Standards Agency (“ASA”), which is responsible for regulating advertising in the UK, will extend to online advertising. Whilst most forms of advertising already fall within the ASA’s governance, including advertisements placed on the internet in paid-for advertising space on third party websites, there are a number of exceptions, most notable of which is online advertising placed by a business on its own website.

From 1 March 2011 the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (the CAP Code) will apply in full to online advertising messages. This will include the rules relating to misleading advertising, social responsibility and the protection of children.

This means that the CAP Code and thus the ASA’s powers will cover:

• Advertisers’ own marketing messages on their own websites;
• Marketing communications in other non-paid-for space under the advertiser’s control (e.g. social networking sites such as Facebook and Twitter).
• Marketing communications on all UK websites, regardless of sector, type of business or size of organisation.

The ASA’s powers have not been extended to areas such as press releases or other PR materials, natural search engine listings or natural listings on price comparison websites. Nor will historical advertisements that do not comply with the new rules be subject to the ASA’s remit, as long as they are located within an appropriately identified part of the website.

In addition to the sanctions which the ASA is able to impose against advertisers who have been found to breach the rules on advertising, such as pre-publication vetting of future advertisements, restriction of access to media space for future advertisements and, ultimately, referrals to the Office of Fair Trading for action under the Consumer Protection from Unfair Trading Regulations 1998 or the Business Protection from Misleading Marketing Regulations 2008, a number of new sanctions are to be introduced.

One of the new sanctions will be the ASA’s right to remove any paid-for search advertisements (such as Google AdWord advertisements) that link directly to an advertiser’s website page which contains non-compliant marketing materials. However, the ASA does not have the power to remove any such website pages.

Online advertising is big business and the need to introduce regulatory powers is obvious. One of the ways that we will be expecting to see this used is by businesses challenging objectionable online advertising of competitors (for example, unfair price comparisons). However, businesses will need to be looking at their own online advertising to ensure compliance with the rules.

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