Ladbrokes’ Iron Man ruling puts ASA at odds with itself

The inconsistency of the Advertising Standards Authority (ASA) is reaching a point whereby marketing executives must be scratching their heads as to how they can tell whether any proposed ad copy is compliant, says lawyer Jason Chess.

Given how much campaigns cost to create, and how much media inventory costs, the erratic adjudications of the ASA can only have an increasingly adverse effect on businesses whose main mode of competition in a saturated market is advertising.

I have long held the view that the decision-making of the ASA poses a threat to the industry, not on the grounds that it restricts advertising for reasons of social responsibility (that is something that the industry in fact embraces), but rather because even the most carefully-compiled marketing campaign is at risk from increasingly odd regulatory decisions with no real chance of appeal.

The Iron Man test
On 24 August the ASA upheld a complaint against Ladbrokes' use of Marvel Comics’ Iron Man character. The single complainant challenged whether the ad was likely to be of “particular appeal” to children. 

Ladbrokes' response was that the relevant commercial copy was contained in an email offer that was sent to age-verified customers only. No person under 18 therefore received it, and Ladbrokes was confident of that. 

For good measure, Ladbrokes pointed out that in any case, the under-18 age group accounted for only a small portion of Marvel Comics’ fan base at 6.39%: a number which hardly connoted “particular appeal” to that group. Job done, one might think. A sensible riposte.

However, the ASA ignored Ladbrokes' response and held the promo to be in breach of regulation 16.3.12 of the Committee of Advertising Practice (CAP) Code – “particular appeal to children and young persons”.

The ASA's unfavourable adjudication hinged on two points. The ASA took the view that the “comic book nature” of the character meant that it did indeed have “particular appeal” to children and it was having no truck with any data that might suggest otherwise. Gut feel seems to be the yardstick in this area for the ASA.

Second, the ASA took the view that despite Ladbrokes scrupulously ensuring that the promo was confined to age-verified distribution channels, it should “nevertheless” not have had “particular appeal” – meaning, to my mind, that it should not have had “particular appeal” to kids who were never going to see it anyway.

Going against the grain
This decision is perverse. In March 2014 Fremantle ran a promo on the X Factor Facebook page in which visitors were offered X Factor goodies by 'Little Miss Bingo', whom visitors had to differentiate from 'Miss Dynamix'. The ASA concluded that the copy was indeed of “particular appeal” to children but that the promotion was not thereby in breach of the codes because it had appeared on age-verified media.

The ASA decided that the “advertisers had taken reasonable steps to prevent those who were under 18 from viewing the ad”, and it did not therefore breach regulation 16.3.12.

Readers should note that this adjudication set a crystal clear precedent. It said that an ad that is of “particular appeal” to children and young persons will nevertheless not be found to breach regulation 16.3.12 of the CAP Code if it is the case that the advertiser takes “reasonable steps” to prevent those who are under 18 from viewing that ad.

As a footnote, the precautionary measures taken by Fremantle also meant that the ad was not in breach of regulation 16.3.13, which prohibits the direction of gambling advertising at the under-18s, but the important point to note is the exoneration of the offending content by its confinement to age-gated distribution channels.

That is to say, the acceptability of the content can be determined by the nature of the distribution media.

So where does this now leave the guidance set out in Section 16.4 of CAP's Guidance on the rules for gambling advertisements?

Up until the Iron Man adjudication, and following and in harmony with the Fremantle adjudication, the ASA's guidance was as follows: “Marketers should be mindful that the use of… superheroes… popular with children, must be used with a due sense of responsibility. However the ASA will consider whether advertisers have taken reasonable steps to prevent under-18s from viewing ads (for example age-gating of online ads) and the likely age of the audience viewing the ad.”

Following on from this, the wording of the Fremantle adjudication was as follows (note that the bold highlights are my emphasis): “The ASA acknowledged the complainant's concern that the ad was likely to appeal to children and young persons and we considered that that… was likely to be the case, if that audience was exposed to it. However the post was age-restricted… We therefore considered that the advertisers had taken reasonable steps to prevent those who were under 18 from viewing the ad and concluded that it did not breach the code.”

Contrast this with the wording of the Iron Man adjudication: “We understood that the email was sent only to over-18s. However we considered that the content nevertheless should not have particular appeal to children or young persons.”

The Iron Man adjudication therefore means that any ad copy that may have “particular appeal” to children will now be in breach of the codes even if it is never seen by a child or young person and is confined to age-gated media. That is all that the word “nevertheless” in the adjudication can mean.

This change in interpretation was heralded, at least to my knowledge, by no consultation, notice, or revision to the ASA's guidance and no explanation or statement that decisions like the Fremantle adjudication are now “bad law” and perilous to rely upon. At the date of writing, the guidance cited above remains published on the ASA's website unmodified.

The fact that the ASA's current position is contrary to common sense is not worthy of much comment: this is after all the organisation that banned the Ladbrokes' 'shark' and 'parachute' ads as connoting toughness and recklessness, perhaps the most eccentric regulatory decision ever seen.

More seriously, the latest decision seems also to throw to the four winds a cardinal tenet of European digital content law. Article 22 of Directive 2010/13 EU (the AVMS Directive) specifically addresses the question of how minors should be protected from programmes likely to harm them.

Given that the social consensus (including among gambling operators) in the UK is that minors should not see gambling advertising, the analogy is instructive and so the distinction between editorial and commercial content is irrelevant.

Article 22(2) of AVMS states that “programmes which are likely to impair the physical, mental or moral development of minors” should not be broadcast, “except where it is ensured, by selecting the time of the broadcast or by any technical measure, that minors in the area of transmission will not normally hear or see such broadcasts”.

So here is explicit legal authority at the very highest level for the principle of age-limiting or age-gating of content that minors are not supposed to see, whereby that content, when suitably age-gated, becomes lawful to disseminate.

Time for change?
Philosophically, a system of consensual self-regulation, such as the ASA's is held out to be, is always more attractive to business than the imposition of rigid legislation. Who knows what the politicians might decide to enact.

In relation to gambling there is always the risk that they will respond to emotive factors unsupported by evidence, as the current unsubstantiated furore over FOBTs amply demonstrates.

However, any system of regulation must generate consistent and respectable decisions, command the confidence of participants in that system and above all enable business certainty. The ASA's regime achieves very little of this in its current application to gambling, save perhaps in the context of the industry's current ‘own goals’ in promoting player incentives.

Section 328(2) of the 2005 Gambling Act allows the Secretary of State to “make regulations controlling the advertising of gambling”, regulations which may include provision for “the content of advertisements”. Up until now, the idea of the Department for Culture, Media and Sport legislating for gambling advertising has, quite rightly, filled the industry with horror.

But at least a statutory scheme operated by the Gambling Commission and endorsed in the licence conditions and codes of practice (LCCP) would have to work subject to public and administrative law requirements relating to consistency, reasonableness, prior consultation and so on, and be generally subject to the commission's published and by now well-understood methods of licensing and enforcement.

It might well be the case that in the current politically adverse climate, politicians would seek to restrict the industry's freedoms if they were asked to legislate under Section 328(2) but that might be a trade-off the industry might come to contemplate favourably in exchange for the consistency and business certainty that is currently lacking. Better the devil you know.

Alternatively, the ASA might consider an expansion of its pre-publication copy clearance services so as to provide definitive clearance — even Clearcast clearance doesn't seem to prevent odd adjudications being made in relation to entirely unobjectionable advertising, for example, the hilarious and completely harmless Ladbrokes' shark and parachute commercials cited above.

Until there is a change in regime, the industry should have the inconsistency of advertising regulation on its list of identifiable risks.

Jason Chess is a partner and co-head of the betting and gaming group at law firm Wiggin.