In the interests of championing consumer rights, the Advertising Standards Authority of South Africa (ASA) has approached the National Consumer Commission (“NCC”) with a proposed industry code called the Advertising and Marketing Industry Code of Practice (“the Industry Code”).

The Industry Code was published for public comment in the Government Gazette of 26 July 2016, and interested parties have been invited to submit comments. As part of this proposal, the ASA has also requested accreditation as an ombudsman scheme in the advertising and marketing industry.

The proposed draft Industry Code falls within Section 82 of the Consumer Protection Act 68 of 2008 (“CPA”), which allows the Minister of Trade and Industry to accredit industry specific ombudsman schemes, and to prescribe accompanying industry codes. In the past, the Motor Industry Ombudsman of South Africa (which enforces the South African Automotive Industry Code of Conduct), and the Consumer Goods and Services Ombud (which enforces the Consumer Goods and Services Code of Conduct) have been accredited.

The ASA’s Industry Code has been designed with the consumer in mind, with clauses in place to protect consumers against improper trade practices, and deceptive, misleading, unfair or fraudulent conduct in the marketing and advertising industry. As a result, it seeks to promote informative, authentic and legal advertising and marketing in South Africa.

If the Industry Code is accepted, it will be compulsory for all advertising and marketing businesses to comply. The advertising ‘participants and subscribers’ referred to in the code comprise marketing and advertising agencies, media owners and their agents, media buyers and all other marketers and advertisers of goods and services in South Africa (such as retailers, suppliers, wholesalers, distributors, manufacturers, producers and importers). Under the Industry Code, they will be required to do the following:

  • comply with the Industry Code;
  • register with the ASA;
  • place suitable notices on their websites and at their trading premises, advising consumers that they subscribe to, and are bound by, the Industry Code and providing the ASA’s contact details to consumers; and
  • contribute towards the funding of the ASA. It is proposed that a levy collection agency will be established for this purpose.

Why the need for a new code? While there are some similarities between the Industry Code and ASA’s current Code of Advertising Practice (“ASA Code”), some changes were required to bring the ASA Code in line with the CPA. For example, the definition of “advertisement” has been given the meaning as set out in Article 1 of the CPA, but it has been emphasised that editorial matter for which no consideration has been given or received (such as news articles), does not fall within the definition of an advertisement.

The Industry Code will emphasise consumer rights, with Clause 1.4 saying that it “specifically deals with the resolution of complaints of prohibited conduct and the failure to comply with required conduct in respect of advertising and marketing of goods and services to consumers as provided for and envisaged within the scope of the [Consumer Protection] Act”.

Like the ASA Code, it provides a basis for dispute resolution between industry participants as well as for complaints between industry participants and consumers. The Industry Code will reflect the current practice of not charging

consumers and organisations serving in the public interest for filing complaints before the ASA, or in subsequent appeal proceedings. Competitors, however, may be required to do so.

Complaints under the Industry Code will follow a similar process to the ASA, with the Directorate considering complaints, and appeals being filed with the Advertising Industry Tribunal, Advertising Standards Committee or the Final Appeal Committee.

While the complaints process overlays, only a handful of the 19 general principles that are found in Section II of the ASA Code have been incorporated into the Industry Code, including those relating to truthful presentation and substantiation of claims, and the prohibition of misleading claims (which overlaps with Section 41 of the CPA, dealing with false, misleading or deceptive representations).

Some of the clauses that have been removed include those that deal with competitor complaints, meaning that if the Industry Code is accepted in its current form, the grounds on which the ASA will be able to consider competitor complaints will be more limited. Some of the appendices have now been incorporated into the Industry Code. This includes those relating to the advertising of cosmetics and alcohol, as well as direct marketing and environmental claims. The advertising requirements for slimming products, foodstuffs and beverages, breast milk substitutes, baby feeding bottles and teats and collective investment schemes has been excluded, as well as the provisions for specific categories of goods and services. The reasoning for this is that these categories already fall under legislation from other bodies. This means that in certain instances where the ASA has been an appropriate dispute resolution, other suitable tribunals may have to be approached in the future. Of course, none of this is set in stone until the Code and any of its amendments are finalised.

The Code is currently reviewing and considering submitted comments and consulting relevant industry participants.