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ASA NEWS ARCHIVE - RETURN TO CURRENT NEWS$500,000 fine for misleading ads
10 December 2009
Telecom NZ has been fined $500,000 after pleading guilty to breaching the Fair Trading Act with its ad campaign for Xtra's Go Large broadband plan.
In 2006 Telecom undertook an extensive advertising campaign to promote Xtra's new Go Large broadband plan.
The campaign claimed, ‘“Xtra Broadband is about to be unleashed!”, “unlimited data usage and all the internet you can handle” and “maximum speed internet”.
The Commerce Commission decided to investigate these claims after a number of Xtra customers complained that their internet speed was constrained, occasionally to to dial-up speed, and in some cases was actually slower that the Xtra plan they had previously been on.
The impression created was that the Go Large plan was unique in that it would offer unconstrained faster speeds and no data caps. The disclaimer on the ads and website outlined the possibility of constraints, including a ‘traffic management policy’ for use during peak times and for those using peer-to-peer applications.
The Commerce Commission's investigation established that a change made in late 2006 to how the Go Large plan was administered meant that the traffic management policy applied at all times and across all applications, not just to peer-to-peer traffic.
This meant that in some cases customers were not experiencing unconstrained speeds.
Graham Gill of the Commerce Commission summed it up; “Businesses [...] need to make sure that any terms and conditions, such as a traffic management policy, do not alter the overall impression given by an advertising campaign. To avoid the risk of breaching the Fair Trading Act business should ensure that their goods and services can live up to any marketing hype – in this case Telecom clearly failed to do so.”
Read the full press release including details of Telecom’s previous breaches of the Fair Trading Act.
Commerce Commission 1, ASA 0
25 November 2009
The Commerce Commission's decision to warn Inghams Enterprises over advertising claims contradicts the views of the ASA's Complaints Board.
In July the ASA dismissed a complaint, and the subsequent appeal, that Inghams misled consumers by claiming that their chicken “has no added hormones or GM ingredients” even though they are fed genetically modified soybeans.
This decision was based on Food Standards Australia New Zealand's (FSANZ) definition of GM food which states that “a food derived from an animal or other organism which has been fed food produced using gene technology is non GM”.
The Commerce Commission takes a different view on the matter.
On the back of a study undertaken by Professor Heinemann of Canterbury University which questions FSANZ's definition, the Commerce Commission issued a warning that Inghams risked breaching the Fair Trading Act if they continued with their no GM claims.
How did the ASA and Commerce Commission come to such different conclusions?
The ASA rightly points out that they are obliged to defer to FSANZ, a Crown entity, and, furthermore, lack the resources to commission their own genetic study.
That maybe true but their Code of Ethics states that advertisers should not abuse the trust of consumers or exploits there lack of knowledge.
Technically the Complaints Board’s decision is correct but, quoting Adrian Sparrow of the Commerce Commission, “To consumers, perception is everything. Someone buying a chicken that is promoted as containing no GM ingredients, would not expect that the chickens had been fed on 13 per cent GM soya feed”.
It's hard to disagree with that kind of common sense.
A handful of recent decisions
11 September 2009
The Advertising Standards Authority has released details from the Complaints Board's August meeting. We've condensed the decisions relating to television advertising into a bite size read.
The short summary is that none of these decisions are particularly noteworthy. The CIGNA decision serves as a reminder that if you're going to make absolute claims make very sure they're unambiguous and correct.
The full decisions will be available on the ASA's website when they find the time to post them.
A complaint that this Nissan commercial “emulated drunken driving” was rejected.
The Complaints Board decided that most people watching the hyperbolic advertisement would recognise the movement of the car to be that of it changing lanes and that the ad did not encourage any unsafe driving practices or depict any traffic offences.
A compliant that this NTA ad was “extremely offensive and disturbing” was rejected.
The Board noted that the identity of the Advertisers was clear (a requirement for all advocacy ads) and commented that it was very powerful and dramatic, and presented in a very realistic way. It accepted it would be upsetting for some people.
That aside, the Board said that the highly socially responsible message and CAB's S9 classification (only broadcast after 9pm) meant that it had been prepared with a due sense of social responsibility and was unlikely to cause serious or widespread offence.
A minority of the Complaints Board disagreed.
A complaint that a McDonald's TVC was misleading was rejected.
The ad promoted Happy Meals using “Night at the Museum 2” promotional toys. The complaint was that this was misleading as the toys were not available at their local McDonald's.
The Board accepted that the McDonald's had made its best effort to ensure that children were able to receive the toys and noted that the ad run with the disclaimer “For a limited time while stocks last.”
This long-running CIGNA Life Funeral Plan commercial is found to be misleading.
The Complainant said that ad's claim that “even the most simple funeral costs over $5,000” was misleading as a company called Simply Cremations offered a service for $2,000.
The Board said “…even the most simple funeral costs over $5000” was an absolute claim, and needed to be substantiated. The Advertiser say that the $2,000 service was not what most people would consider to be a funeral (they called it a "body disposal") and stood by their claim.
The Board disagreed and said that the $2,000 service could be considers as “the most simple of funerals” and ruled that the ad was in breach of Rule 2 of the Code of Ethics.
CAB approvals was subsequently withdrawn and the Agency is working on a fix.
No room for poetic license
17 August 2009
The ASA has upheld a complaint against the “Auckland's Big Little City” commercial on the grounds that it encourages unsafe and illegal road usage. This decision sets a very strict and literal precedent for any advertisers planning to show road usage in their commercials.
In April this year Auckland CBD's business association, Heart of the City, aired an ad showed an old man riding through the City’s streets at daybreak.
Almost immediately, several complaints were lodged with the ASA arguing that it is unsafe and illegal for cyclists to ride on the footpath (unless you’re a postie) and to ride without a rear light in the darkness.
CAB had argued that the whimsical depiction of a fictional character on his way to open Auckland’s non-existent city gates was unlikely to encourage copycat behaviour. The commonsense decision would be to allow the advertiser a degree of poetic license and ignore the technical infractions.
The majority of the Complaints Board disagreed and said that these activities were easily copied by other cyclists. It noted that a lot of work had been undertaken to encourage compliance with the legal requirements of cycling on public roads and that, in effect, this ad sets a bad example.
The implications of this decision are that advertisers are going to have to be particularly literal when depicting road usage in future commercials. There appears to be very little room for poetic license as the Complaints Board seem likely to ping anything the could be considered unsafe or illegal.
comparative advertising
17 June 2009
The recession is being blamed for a sharp increase in the number of comparative or ‘attack’ ads being produced worldwide. Here’s what you need to know if you’re planning to attack your competitors in your advertising.
Under the heading 'Advertisers go on the Attack' the Economist newspaper reports that comparative ads are appearing in just about every product category as companies battle for diminishing consumer dollars. It highlights one particularly fiery scrap between Subway and Dominos over whose sandwiches are preferred by the American public.
Unlike many European markets it is perfectly okay to run comparative advertising in New Zealand. It is also okay to name your competitor. A good example of this is Hampsta who have been waging a relentless campaign against Chrisco, a fellow Christmas hamper provider.
A few kind souls have been somewhat shocked by this type of advertising but each and every complaint has been dismissed by the ASA who point out that this type of advertising is allowed under the Code of Comparative Advertising and that Chrisco have the right to rebut Hampsta’s claims.
As an aside, Chrisco did complain that Hampsta’s comparison was misleading. Interestingly, they then withdrew their complaint when the ASA advised that they could not make a decision and recommended that the parties use the Adjudication With Attendance of Parties (AWAP) process. Presumably, Chrisco judged that the risk of have the independent adjudicators’ decision go against them was worse than simply being attacked by a competitor.
- Comparative ads must be informative. It’s not okay to simply bash your competitor. The intent of the ad must be to inform the public and not to discredit, disparage or denigrate your competitor.
- Comparative ads must be factual. To use it you must be able to prove it. Any comparison must be unambiguous and clearly understandable, for example, your price versus their price or your feature versus their feature.
- It is okay to identify your competitor but only if it is done fairly and never in a manner or tone of voice that denigrates their product or service.
A few golden rules
Of course just because something is allowed doesn’t necessarily mean you should do it. Evidence has long suggested that comparative ads often do more damage than good and, paradoxically, often provide a boost to the competitor.
As the Economist notes, comparative ads can make a company look “insecure and desperate for business.” Not a good look.
road safety and commonsense
15th JUNE 2009
Complaints about this recent Heart of the City ad should help to clarify just how literal the Advertising Standards Complaints Board expects advertiser to be when depicting safe road usage.
The commercial features an old man riding his bike through the streets of downtown Auckland at daybreak. The complaints, to be heard next month, are that the cyclist is not wearing an approved safety helmet, does not have a rear light on his bike and is riding on the footpath.
The ASA’s Code of Ethics states that all ads "should be prepared with a due sense of social responsibility" and must not “contain any visual presentation or any description of dangerous or illegal practices or situations which encourage a disregard for safety.”
Clearly, a strict interpretation of this would limit the creative flexibility of many advertisers and lead to some ridiculous decisions. To balance this, the Complaints Board is “vested with the discretion to ensure commonsense outcomes” and to make allowances for “obvious hyperbole or humour.”
A quick glance at the NZ Transport Agency’s Information of Cyclists illustrates the problem for this particular commercial. Strictly speaking the hero should be in a hi-vis vest, lit up like a Christmas tree and be wearing a modern safety helmet. To avoid the ‘footpath violation’ the Gucci and Louis Vuitton shops would be way in the distance and obscured by the large Nikau palms that line that part of Queen Street.
In other words, the whimsical tone and clarity of the ad would have been compromised in an effort to ensure that nobody gets the wrong idea about cycling on footpaths or riding without modern safety equipment.
The commonsense view is that this ad is unlike to undermine any ongoing public safety campaigns nor will it lead to an increase in general lawlessness. The Complaints Board should give advertisers room for a bit more poetic license and dismiss these complaints.
The beaver debate
7th April 2009 (UPDATED 26 May 2009)
It was ruled okay for Australians so is it acceptable for New Zealanders? Later this month the Advertising Standards Complaints Board will decide if the U by Kotex tampon commercial is offensive to New Zealanders.
When it screened in Australia last year 185 Australians took offense and complained to the Australian Advertising Standards Bureau (ASB).
However the ASB dismissed all of these complaints and the advertiser went on to make a sequel and, if you believe The Sydney Morning Herald, a 20% increase in sales.
The key complaint in both countries is that some people consider the term ‘beaver’ to be derogatory and degrading to women.
In their deliberations the ASB ruled that the majority of Australian’s would disagree with this view. They also “considered that the use of beaver in the commercial was playful and that it was an acceptable euphemism as it was relevant to the target audience.”
We agree and will be robustly defending our decision to approve this commercial.
The rule that the ASCB will be considering is if this ad contains "anything which in the light of generally prevailing community standards is likely to cause serious or widespread offence taking into account the context, medium, audience and product."
Undeniably some people have taken offense but we don't believe that the majority of New Zealanders will find this ad offensive.
We'll let you know if the ASCB shares this view.
UPDATED 26 MAY 2009:
As expected the ASCB has not upheld this complaint.
The Board ruled that the commercial does "not employ sexual appeal in a manner which was exploitative and/or degrading of any individual or group of people [...] and agreed unanimously that the advertisement used humour in a manner that was not likely to cause serious or widespread offence."
That's just the half of it
25th March 2009
Anybody can lodge a complaint with the ASCB and absolutely every complaint, no matter how bizarre, gets a fair hearing.
A fine principle but you do sometimes have to wonder about the sanity of some of the complainants and the effect their sanity (or lack of it) has on the ASA's staff. The NBR's Hazel Phillips sums it up nicely under the heading, "ASA too tolerant of time wasting whack jobs".
The examples cited by Hazel Phillips are hardly exceptional (apparently Jelly Tip Trumpet ice creams looks like penises).
Last week alone the Chairman heard complaints that the animated Kiwis in the Maggi Soup mix ads perpetuated a culture of domestic violence, that the Lynx Dry Anti-Perspirant deodorant ad is not a "realistic portrayal of a person with such a problem" (surely a good thing?) and that reference to "Santa's Sack" in a Christmas ad is offensive.
Having read a few thousand replies it is reassuring to see that the ASCB are wonderfully efficient at blasting through the "whack jobs" and focussing on the important stuff.
This is important because efforts to be less tolerant risk undermining the natural justice principle of due process. And removing some of the fun.
Satirical or racist?
23RD February 2009
Over the years there have been complaints by Australians living in New Zealand that our ads often cross the line between good humoured satire and bigotry. A recent Mitre 10 commercial is just the latest to come under this suspicion.
The Mitre 10 ad showed two young boys in a sandpit discussing, in the manner of two adults, putting up a retaining wall. One of them addresses Jonesy, a third boy, and asks if he can “Give us a hand on Saturday”, to which he responds in an Australian accent, “Mate, you’re dreamin’.”
The other boys comment to each other, “Aussies. No surprise there.”
The test that the Complaints Board applies is to decide whether the ad contains “anything which in the light of generally prevailing community standards is likely to cause serious or widespread offence” (Code of Ethics, Rule 5).
In this case, the Chairman ruled that the ad incorporated “a well established satirical theme which played on the spirit of competition between Australia and New Zealand” and so did not “cause serious or widespread offence”.
This is consistent with previous decisions on similar complaints about a Bond & Bond and Vodafone commercial.
Clearly some Australians (and Kiwis) do find this humour offensive. The long running KiwiBank campaign was recently blasted as “reprehensible” by former BNZ Chairman Kerry McDonald.
For now the ASCB consider this as a minority opinion and believe that most Australians will understand the intended humour in these ads. Of course, community standards constantly evolve so what is acceptable today might not be tomorrow.
Crossing the line
19th february 2009
The latest edition of NZLawyer includes an excellent article by Wendy Duggan, a senior associate at Bell Gully, on how the Advertising Standards Complaints Board (ASCB) interprets the ASA's Code of Ethics.
We're recommending this article because we like the way it uses recent and topical ASCB decisions to illustrate the Board’s ethical, as opposed to purely legalistic, approach when ruling on complaints from the public.
Click here to read the article on NZLawyer Online.
A revamped complaints board
16th January 2009
The Board which adjudicates on complaints from consumers about advertising has been revamped with new public members, a new Chairman and a new Deputy Chairman.
PRESS RELEASE (11/2/09) - The Chairman of the Advertising Standards Authority, Rick Osborne, announced today the appointment and reappointment of a number of public members to the Advertising Standards Complaints Board (ASCB). The Complaints Board meets monthly to adjudicate on complaints from consumers about advertising.
The new Chairman of the Complaints Board, Jenny Robson, from Palmerston North, has been appointed for a three year term. Ms Robson, a lawyer, has extensive experience in dispute resolution, has been a member of the Complaints Board for nine years and has a broad knowledge of advertising standards.
Mr Philip Broughton, a Partner in the business advisor firm, Polson Higgs, in Dunedin, and a public member of the Complaints Board has been appointed as Deputy Chairman.
Two other public members have been reappointed for a further three years each. Dr Greg Simmons, a public health physician currently seconded to the Ministry of Health will serve a second term and Margaret McKee, Chief Executive of the Queen Elizabeth II National Trust, following two terms as an alternate public member has now been appointed as a full member.
Two new public members have joined the Complaints Board. Mr Alex Handiside, Youth Development Manager at Hutt City Council has been appointed as a full public member and Susan Taylor, Deputy Banking Ombudsman, as an alternate public member. Both appointment terms are for three years.
“The ASA is very pleased with the breadth of experience and expertise the public and industry members bring to the Board table in support of appropriate advertising standards”, Mr Osborne said.
Advertising Standards Complaints Appeal Board
The ASA is also pleased to confirm the reappointment of two public members of the Advertising Standards Complaints Appeal Board. Euan Abernethy, former Chairman of the Securities Commission, and Chairperson of the Appeal Board has been appointed for a further three year term, and Judi Jones, Electricity and Gas Complaints Commissioner has been appointed as an Appeal Board member for a further three years. “The considerable experience that these public members bring to the Appeal Board is invaluable”, said Mr Osborne.
Using guns with a due sense of social responsibility
13th January 2009
A recent ASCB decision has helped to clarify the standard of social responsibility required by advertisers wishing to use guns as props in their commercials.
The ad in question featured a short YouTube style film clip of a young man posing with a realistic looking toy gun at party. While the ad did not encourage violence, the Complaints Board decided that it was contrary to the prevailing community standards to feature a gun in a social setting.
For CAB this means we'll be more conservative in our assessment of material that could be viewed as glamorising guns or gun culture.
Read the full decision here.
Something for summer
11th January 2009
New Zealanders visiting France often comment on the fact the French have a higher tolerance for nudity in their ads than we do here. Those hoping that we'll become more like the French will be pleased to note a recent ASCB ruling on a Piz Buin commercial.
The ad featuring a woman sunbathing topless was ruled to be well within the 'generally prevailing community standards'. So much so that the Chairman did not even consider that there were grounds for the complaint to be heard by the full Complaints Board.
Read the full decision here.
Of course, context is everything. You only need to look at Burger King to see the perils of using sex to sell an unrelated product. Read full Burger King decision here.