Global Marketing Updates: Advertising Regulations

March 15, 2018

Experts from Latin America, Europe, the Middle East, and China shared how the work of advertisers is affected by regional regulations regarding issues such as food, the environment, local mores, social media, and the internet.

Regional experts offered updates on regulatory developments affecting advertisers in Latin America, Europe, the Middle East, and China.

Carlos Alberto Arroyo del Rio, Managing Partner at Falconi Puig Abogados: A hot topic that interests advertisers is Latin American regulations related to misleading advertising. You’ll find a wide variety of consumer protection acts, health codes, competition laws, broadcast codes, and communication laws, as well as more specific regulations, like those related to alcohol, tobacco, and children. In fact, it wouldn’t be unusual for me to have to go through eight laws to clear an ad.

Honduras forbids comparative advertising. Costa Rica, late last year, handed down contradictory rulings regarding use of the word “best” in advertising. “Best used cars” was deemed misleading, whereas “best fruit flavor” was deemed not misleading. That’s why I say, you have to judge an issue case by case and country by country.

Let me turn to the advertising of processed food. There’s a clear trend toward regulating this industry more heavily. In Chile, Peru, Ecuador, and Uruguay, special product labelling is required. For instance, in Ecuador, any product that has been processed at all must be labeled with a stop sign.

Some countries forbid the use of comparative advertising to promote food products. Others forbid the use of children in such advertising.

Let me mention a few cases. In Brazil, the Superior Court of Justice deemed ads that encourage children to buy a snack to get a toy to be abusive advertising. In Brazil, you can use such tactics to address adults, but not children. That is the challenge in Brazil — to evoke themes related to children, but to direct the ads at adults.

Chile, on the other hand, doesn’t allow these kinds of commercial hooks at all. At the moment there’s a pending resolution by a civil court reviewing sanctions applied in response to the use of Chester Cheetah on packaging. This was deemed a violation of food packaging and labelling laws, which forbid commercial hooks. It’s an important ruling because it could extend the law’s reach to include characters on packaging, which are registered trademarks.

After reviewing the Latin America material, I reached a simple conclusion: When you talk about “LATAM” as a unified region, you often mistakenly assume how much the countries have in common. We do have much in common, but in matters of regulation, we have many country-specific differences. So I encourage you all to say “LATAM 20” to remind yourselves that we are talking about 20 countries — more if you include the Caribbean. So please be advised: country by country, case by case.

Jan Ravelingien, Partner at Marx Van Ranst Vermeersch & Partners: Marketers should adhere to a number of guidelines to maintain compliance with EU environmental regulations:

  1. Brands should be careful not to exaggerate when claiming environmental benefits. “100 percent natural” is often hard to achieve.
  2. Don’t assert fake green credentials regarding your sustainability.
  3. Make claims based on the whole lifecycle of your product and its production.
  4. Make sure you hold proof for all of your claims.
  5. Update these claims as necessary.

The first example I’d like to discuss relates to cars and compulsory disclaimers and disclosures. Compulsory disclosures are required in car ads regarding emissions and fuel consumption, which you wouldn’t think would be applicable to electric cars and their miles per gallon. However, a claim of “zero emissions” would not be appropriate in this case, because the production of electricity, which the car in turn consumes, is not clean. So advertisers should rather say “zero emissions while driving.”

Volkswagen ran an ad for a camper van that claimed the vehicle was “genuinely green” One might think that it would be readily understood that it was not an absolute claim. However, the advertiser could not show that the camper vans caused no environmental damage and therefore couldn’t be considered “genuinely green.”

Let me give an example from the less regulated funeral industry, where you see demand for green burials. In this industry, there was a company called Creative Coffins that was recently attacked for an ad that claimed its coffins were environmentally friendly and biodegradable. However, the evidence did not sufficiently show that the cardboard and glue were biodegradable. For that reason, the claim has been deemed too vague and not sufficiently substantiated.

I would now like to turn to claims made about organic food in labelling and advertising. “Green,” “organic,” “eco,” “ecologic” claims — these wouldn’t just need to be substantiated; they might need something more.

Before you can say that your food is “green” or “eco,” you will have to confirm that 95 percent of the ingredients by weight are organic. In addition, you’ll have to make sure that your labels include the code number of the controlling authority and, on pre-packaged food, the appropriate EU logo. In addition to substantiation, you also need certification for every step in the food processing chain. That’s strict, but there’s also an upside: once you’ve established compliance, there’s no need to seek clearance from individual EU countries.

Fiona Robertson, Senior Associate at Al Tamimi & Co.: There are lots of taboos in the Middle East. There are five or six different pieces of regulatory legislation that will affect any given campaign. Obviously, attempts to criticize the government are not well-received. Alcohol and smoking are both banned in advertising. Nudity and anything even vaguely sexual will be problematic. And then the thing we can find even more difficult to grapple with are the more broadly defined protections for cultural and social mores. Leaders often use these to promote their own political positions and to put down dissenting views.

Although there are many regulations on the books, the authorities have a reactive way of dealing with violations. They don’t usually respond until they receive a complaint from a conservative consumer or from the brand’s competitor.

One thing we recently struggled with was how to discuss breast cancer as part of an awareness campaign in the UAE — in a country where you’re not supposed to discuss that part of the body. However, the result was a fantastic campaign. One Sunday, the advertiser took one lady’s shoe from each pair left outside of the mosques, and inserted a pebble, with information and a helpline number attached. The result was that with 3,000 pebbles inserted into shoes, 2,500 women phoned to schedule a breast exam. So, while taboos exist, clever marketers will always find a way to get their message across.

One thing to remember is that the region is very large, so in addition to conservative countries such as Saudi Arabia, you also have more permissive ones such as Lebanon. One Lebanese ad for the lottery even ran an ad with a woman’s low-cut dress revealing lottery balls where her breasts ought to have been.

Social media influencers are a huge issue in the UAE and Saudi Arabia. They’re paid more in the Middle East than in the U.S. — sometimes 10 times more. A new law in the UAE for content licensing requires anyone using social media in advertising to get a license from the government, which costs 15,000 dirhams. This is going to turn the industry on its head, because most social media influencers operate under the table. If you are doing business in the region, make sure that your influencers are in compliance with this new law.

Justina Zhang, Senior Partner at TransAsia Lawyers: Two months ago, China enacted a law forbidding unfair competition. This has changed four aspects of advertising in the country.

  1. A provision related to preventing customer confusion forbids labeling that is similar to competitors, as well as similar enterprise and domain names.
  2. A provision related to false marketing forbids companies from paying people to post reviews or comments promoting their products.
  3. A provision related to commercial slander forbids the release of false information about a competitor. This provision requires special attention in comparative advertising.
  4. Finally, the permissible maximum amount for prizes was raised from 5,000 to 50,000 RMB.

Other advertising regulations are also worth reviewing. Advertisers are not permitted to use words such as “best,” “top,” or “first”; instead, they must use words such as “better,” “excellent,” or “outstanding.” Be particularly careful when having advertising copy translated into Chinese. Sometimes, words that aren’t superlatives in English can be translated into superlatives, which would violate the regulation. Also, when invoking data, advertisers cannot refer to “first” or “leading.”

Some claims are difficult to prove with data. Medical advertisers, for instance, can’t claim cures; they can only indicate applications. You can’t claim that a product cures cataracts, only that it should be applied to cataracts.

Tobacco products have been banned from advertising on traditional channels, and now they are banned from advertising on internet platforms such as WeChat.

In regards to real estate advertising, advertisers are not supposed to say how far a listing is from a desirable location, such as a good school. Instead, the ad can say things like the listing is in “the center of the city,” or “the center of entertainment.”

Finally, ads for alcohol can’t depict drinkers driving automobiles.


Q&A with Jeffrey A. Greenbaum, Managing Partner at Frankfurt Kurnit Klein & Selz PC; Carlos Alberto Arroyo del Rio, Managing Partner at Falconi Puig Abogados; Jan Ravelingien, Partner at Marx Van Ranst Vermeersch & Partners; Fiona Robertson, Senior Associate at Al Tamimi & Co.; Justina Zhang, Senior Partner at TransAsia Lawyers


Greenbaum: Has the U.S. political situation affected advertising regulations, either the regulations themselves or their enforcement?

Robertson: The only thing we’ve seen is that the National Media Council has been very interested in what the Federal Trade Commission has been doing in relation to influencer marketing. From a political perspective, no, not really. We have more issues to deal with in the Middle East than what’s going on in the U.S.

Greenbaum: Do you have any more to add about how influencer marketing is being regulated?

Robertson: The new UAE law just came out. It’s about licensing for media sites, but it will extend to social media influencers and websites selling particular types of products. It will have a severe impact on the way brands interact with influencers, but it will hopefully legitimize what has been a bit of a cowboy industry for years.

Greenbaum: Can anyone else talk about how influencers are being regulated, and what disclosures would be required with respect to any material connections?

Ravelingien: With the exception of Germany, the Netherlands, and the U.K., we have only general rules on disclosures in advertising. But that doesn’t mean that disguised advertising by influencers will remain unaddressed. We have seen administrative prosecutions in France, and this can happen any time based on rules that require someone to disclose when they’re advertising. Until now, it’s been a bit silent, I must admit.

Greenbaum: What disclosure would you tell a client to use in Belgium, for example? Would you rely on a tool provided by a social media platform?

Ravelingien: I would. I know there are some specific sensitivities, in France, for instance, regarding the language used, so you have to respect the medium. You can’t have very lengthy disclosures that would overwhelm the rest of the message.

Zhang: In China it’s not heavily regulated, so when influencers post a promotion, they just need to indicate that they’re ads.

Robertson: In the new advertising regulations that were handed down this week, it was very clear that advertising content had to be labeled as such. As yet, there are no guidelines as to what form that should take.

Arroyo del Rio: Influencer marketing is not commonly regulated in Latin America. In Ecuador, it’s not regulated at all. But you still need to label an ad as such. That applies to traditional channels like radio and TV, but there’s some ambiguity about how it applies to social media and the internet.

Greenbaum: It seems there’s been more concern about the truth of an ad itself rather than disclosure in Latin America.

Arroyo del Rio: Yes.

Greenbaum: What new advertising regulations do you see coming down the road in your respective regions?

Ravelingien: I think there will be more regulations on pricing and claim packaging, and more specific views on data as used by the advertising community.

Zhang: I think we’re going to have a new e-commerce law soon that will affect advertising on e-commerce platforms. Also, I think there will be more requirements related to data security and its underlying infrastructure.

Robertson: Because of the push toward paperless in the UAE, we’ll probably get a data law soon, which would provide useful clarification.

Arroyo del Rio: In Ecuador, we’re already working on data and privacy laws, and on statutes regarding general administrative principles, so that will affect advertising on social media and the internet, and advertising to children.

Robertson: For those pushing into the Saudi market, we expect to see new laws there as part of their liberalization.

Source

"Global Marketing Updates: Advertising Regulations." Jeffrey A. Greenbaum, Managing Partner at Frankfurt Kurnit Klein & Selz PC; Carlos Alberto Arroyo del Rio, Managing Partner at Falconi Puig Abogados; Jan Ravelingien, Partner at Marx Van Ranst Vermeersch & Partners; Fiona Robertson, Senior Associate at Al Tamimi & Co.; Justina Zhang, Senior Partner at TransAsia Lawyers. ANA Advertising Law and Public Policy Conference, 3/15/18.

You must be logged in to submit a comment.