Consumer Law

 

 

 

 

1.0 Introduction

Freedom of expression is an integral component of modern democratic societies.   Traditionally, freedom of expression was concerned with elimination of manipulation and domination in the operation of democratic governments[1].  The motive of freedom of expression was to promote individual self-expression by protecting the right to speech[2]. Increased recognition on the value of freedom of expression has enhanced its applicability with reference to different dimensions. Amongst the notable dimensions in which the concept of freedom of expression is widely being applied relate to commercial operations. This underlines the fact that the concept of freedom of expression is not limited to establishment of relationship amongst individuals but also has significant commercial relevance. 

In spite of the relevance of freedom of expression, there has been growing concern on the gaps that exist with regard to whether freedom of expression adequately restrict corporate entities from advertising practices, which is the most common form of commercial expression, that might negatively impact consumers[3]. Advertising constitutes one of the fundamental approaches through which businesses engage in commercial expression[4]. The rationale of advertising is to create awareness and to persuade customers to purchase a particular product or service. Commercial advertising forms the foundation of commercial speech in different jurisdictions such as Europe and the United States[5]. Through commercial advertising, businesses are able enhance their performance by creating awareness of their products and services. Thus, advertising spurs movement of goods and services hence contributing to establishment of a well functioning internal market. One of the critical elements of a functional internal market includes integration of freedom of advertising. This paper examines the extent to which advertising is and should be protected as a form of commercial expression in the United Kingdom.

2.0 Analysis

2.1 Public health concern

Public health is a fundamental issue that businesses are required to promote in the course of their operation. Irrespective of the concept of commercial expression, the process of expression should be confined within the boundaries of public health. Therefore, businesses have a duty to desist from actions that might affect contribute to negative public health effects. This goal can be achieved through integration of responsible advertising.  The UK has undertaken remarkable reforms over the past three decades in an effort to protect consumers. One of the notable changes relate to integration of different legislations inspired by the European Community.  For example, the UK has enacted the Consumer Protection Act 1987, Control of Misleading Advertisement Regulation 1988, Unfair Terms in Consumer Contract Regulation 1994 and 1999, and the General Product Safety Regulations 1994[6]. One of the fundamental issues that have created the need for increased consumer protection by limiting freedom of commercial expression through advertising amongst businesses entails the need to promote public health[7].

Consumption of tobacco constitutes one of the critical areas of public health that the UK government has extensively been concerned with[8]. In the quest to promote public health, the UK has implemented a strict law aimed at controlling advertisement related to tobacco. In 2002, the UK government banned businesses from conspicuously promoting and advertising tobacco products by implementing the Tobacco Advertising and Promotion Act 2002 (TAPA).  Under the TAPA 2002, tobacco manufacturing companies were required to limit the space used in promoting tobacco products at the point of sale to an A5 space at the point of sale. The UK government has also implemented other legislations aimed at controlling tobacco consumption. Examples of such Acts include the Children and Young Persons Act 1933, and the Children and Families Act 2014[9].

In the quest to control tobacco smoking, the UK government has outlined clear guidelines on selling and marketing tobacco products. One of the elements that the government has clearly outlined relate to the consumers’ age. The UK government has also restricted the sale of tobacco products to persons aged below 18 years.  The law requires tobacco vendors to conspicuously display this age restriction on an A3 size space.  Failure to display the age warning as stipulated under Section 4 (1) of the Children and Young Persons Act 1991 constitutes an offence that is punishable under the law. The UK Labour government further banned display of tobacco promotions at the point of sale and use of vending machines.

As a member of the European Community, the UK government enacted Directive 2001/37/EC which requires tobacco manufacturing companies to affix a general health warning on their product packaging[10]. Tobacco manufacturing companies are not likely to voluntarily disclose the negative effects of their products.  The rationale of this move is to improve the consumers’ capacity to make informed purchase decisions. In line with its commitment to protect the consumer from the health consequences associated with tobacco consumption, the UK government stipulated clear guidelines on standardised packaging of tobacco products[11]. The guidelines were expected to take effect in May 2016.  Under the standardised packaging requirement, tobacco manufacturing companies are prohibited from branding their product packaging using logos, trademarks, graphics or colour schemes.  This move has gained extensive public support. A survey conducted by YouGov, a nongovernmental organisation showed that 61% of adults supported the move while only 10% opposed.    

One of the cases that underline the UK commitment to enhance consumer protection from advertising as a form of commercial expression relates to the case of British American Tobacco & Others v. Department of Health[12]. In this case, British American Tobacco in collaboration with other major tobacco manufacturing companies in the UK sought to appeal against enactment of the standardised packaging requirement. The companies argued that the standardised packaging requirement would infringe on the trade mark law that provides businesses the right to create product awareness using different trademarks such as logos.  However, the Court of Appeal rejected the application on the basis of public health concern. In his argument, the judge noted that enactment of the new regulations was based on morality.  It is estimated that ‘over 600 children in the UK are encouraged into smoking and are future customers of the tobacco companies, which places a vast financial burden on the state in medical and care costs’[13].  Despite the UK government’s appreciation on the importance of intellectual property rights (IPRs), this ruling affirm that the IPRs can be limited if fundamental human rights will be infringed by the IPRs[14]. Therefore, the UK government is committed at establishing a balance between public health and right to property[15]

The analysis shows that the UK government has implemented effective laws aimed at protecting advertisement. A review of the different cases and legislations with reference to marketing of tobacco products affirm that the government recognises public health as a critical aspect that businesses should take into consideration in designing product advertisement. Therefore, the UK government has restricted businesses from engaging in persuasive advertisement with reference to consumer products that might have negative health implication. Through this approach, the UK government has greatly improved the effectiveness with which consumers make informed purchase decisions.

2.2 False and misleading advertisements

As a form of commercial expression, advertising is intended to create awareness and positive image on a particular brand[16].  The rationale of advertising is to stimulate consumers to act on the information provided through advertising by purchasing the product. Businesses have a responsibility to provide customers with reliable information. However, some businesses engage in unethical trading practices by providing consumers with misleading information. The UK government is committed at promoting fair trade practices. One of the areas of concern relates to provision of correct product information to customers. To achieve this outcome, the government enacted the Control of Misleading Advertisement Regulations 1988, which is based on Council Directive 84/450.  The directive stipulates that the Director General of Fair Trading has the power to seek court injunction against a trader in the event of a complaint on misleading advertisement[17]. However, in deciding whether to seek for a court injunction, the Director General of Fair Trading must examine whether the complain is against the advertising regulations outlined by the  Advertising Standards Authority, which is responsible of formulating  the British Code of Advertising and Sales Promotion.

The power to seek injunction against misleading advertisement in the UK is highlighted in the case of Director General of Fair Trading v. Tyler Barrett and Company Limited. In t his case, the Director General presented evidence regarding misleading advertisement by Tyler Barrett and Company Limited. In its advertisement, the company stated that it would assist small businesses obtain grants from the European Union for different business purposes at a fee of £ 350. However, if the small businesses did not successfully obtain the grant, the company would fully refund the search fee. On the basis of this advertisement, clients [small businesses] were misled on the high probability of receiving the funding. In actual sense, the clients received a list of grant-making entities of which most of them were irrelevant to the businesses’ operations.  On learning that they had been deceived, the client sought for a refund of the search fee without success. From the evidence provided by the Director General, the court issued an injunction directing the company to stop continuation of its advertisement on the basis of misleading information[18]. Similarly, protection against misleading advertisement is underscored in the case of Dixon Limited v. Barnett (1988). In its advertisement, Dixon Limited stated that its telescope had the capacity of magnifying objects by up to 455 times. Despite that this assertion was correct; the telescope’s useful magnification capacity was limited to 120 times.  Magnification beyond this point was blurred. Thus, the company was convicted for providing misleading information.

In an effort to protect the citizens against misleading advertisement, the UK government has entrenched effective measures to control broadcast advertising. Despite the fact that the Director General does not have capacity with reference to advertisement on different broadcast mediums such as television, cable services, or radio, the Communication Act 2003 has charged the Office of Communication  (Ofcom) with the responsibility of stipulating the codes within which broadcast advertisement should be conducted. Ofcom has subsequently designed the Code of Advertising Practice that broadcasting entities are required to adhere to. This aspect has played a fundamental role in promoting self-regulation amongst broadcasting firms[19].

The concept of consumer protection further encompasses provision of accurate information  on which consumers can act on in making a decision to enter into contract with the a trader. In situations where consumers are duped to enter into contract on the basis of falsehood by an advertisement, the consumer has the power to seek legal redress under the Trade Description Act 1968 for such action. Trade description incorporated in advertisements must contain information that is accurate and reliable[20]. False trade description may relate to different aspects such as product composition, size, quantity, performance, date and place of manufacturing and the manufacturing process. The application of Trade Description Act 1968 is illustrated in the case of British Gas Board v. Lubbock (1974). In this case, Gas Board Company advertised that its gas cooker was ignited using a handheld ignition pack, which was not true. Gas Board was prosecuted for providing false information regarding the physical characteristics and composition of its product.  Similarly, consumer protection against misleading advertisements is underlined by the case of Queensway Discount Warehouses v. Burke (1985), in which a customer purchased a wall unit on the knowledge that it was already assembled according to an advertisement posted by the company. Upon purchasing, the client learnt that the wall unit was designed into sections and he was responsible of assembling it himself.

The analysis shows that misleading advertising is a fundamental issue that the UK government is focused on addressing as evidenced by the enactment of the Control of Misleading Advertisement Regulations 1988 Act. The Act has played a fundamental role in ensuring that traders provide accurate information to consumers.

2.3 Protection against pricing offences

The UK government is further committed at protecting customers against engagement in unfair trade practices under the Consumer Protection from Unfair Trade Regulations 2008 (CPR). Unfair trade practices are also restricted under the Unfair Commercial Practices Directive. One of the unfair trade practices relates to pricing. Traders have a duty to ensure that the price of their products and services is explicitly and correctly stated in the advertisement. Moreover, providing customers misleading information regarding the price of product is an offence under the Consumer Protection Act 1987. The Act stipulates that it is an offense to mislead consumers on the price of goods and services as underlined in the case of The Link Stores Limited v. The London Burrow of Harrow. In this case a customer purchased a mobile phone at £89.99. His decision was based on Link Stores Limited advert which stated that ‘we won’t be beaten on price; if you find exactly the same package cheaper in a local store within seven days we will refund the difference’[21]. Contrary to this assertion, the customer sought for refund of the price difference after identifying a similar mobile phone at a local store priced at $69.99 within the specified 7 days period. However, the retailer refused to refund the price difference.  The court ruled that the advertisement was misleading and hence the company was reliable of making the refund.

 The case of DSG Retail Limited v. Oxfordshire County Council, further underlines the extent to which the UK government is focused on protecting consumers against pricing offenses by retailers.  In this case the DSG Retail Limited, the court argued that it is possible for a company to be sued for mislead customers under section 20 of The 1987 Consumer Protection Act if it does not deliver its promise. In this case, the misleading information needs not to apply to a particular consumer.  Similarly in Office of Fair v. Officers Club, the court ruled that price indications can be misleading despite compliance with the Code of Practice stipulated under the Control of Misleading Advertisements Regulation 1988.

In an effort to curb misleading pricing, the UK government has implemented varying legislation depending on the seriousness of the crime. For example, cases of misleading pricing involving minimal amounts are subject to a fined not exceeding £ 5,000.  These cases are adjudicated by magistrates. Conversely, cases involving serious incidents of misleading pricing are referred to the Crown Court which can impose a fine of unlimited amount.  The remedy for pricing crimes specifically entails penalty. In line with the Powers of Criminal Courts Act 1973, courts in the UK have the power to order for compensation of victim of pricing offence for engaging in misleading pricing if such cases are successfully prosecuted in a court of law[22].   

            Consumer protection further entails integration of enactments that require businesses to provide consumers information on pricing indications under the Pricing Indications (Method of Payment) Regulation 1990. The pricing indication requirement largely applies to companies that charge different prices under different pricing methods.  Additionally, the Pricing Markings (Food and Drink Services) Order 2003 requires businesses that provide food products to public to clearly detail their product pricing method.  

            In the advertising process, traders provide consumers with information relating to product prices. However, it is essential for producers to ensure that the right price is provided. Failure to provide correct information may mislead a customer as illustrated in the cases reviewed above. The enactment of the Consumer Protection from Unfair Trade Regulations 2008 (CPR) has enabled the UK government to succeed in controlling the conduct of businesses ensuring that accurate information on product pricing is provided to consumers in the advertising process.

3.0 Conclusion

Despite the prevalence of the concept of freedom of expression in different spheres of the society, the need to protect advertising is critical. This arises from the fact that some businesses might engage in advertising practices that might be injurious to the target audience. For example, businesses may provide misleading information to customers through advertisement with the intention of   maximising profitability. According to the analysis, the UK government has entrenched extensive legislations, Directives and Acts aimed at establishing a balance between consumers and traders.   One of the foundations that guide the UK government in making legislation on advertising entails ethics and morality. In the quest to achieve this goal, the UK government has focused on a number of areas.  One of the areas in which advertising is protected relate to public health. The UK government appreciates that businesses might affect consumes directly or indirectly through the products that they sell to customers. This aspect is highlighted in the case of businesses within the tobacco manufacturing sector. In recognition of the negative health effects of tobacco consumption, the UK government has entrenched measures that require businesses in the tobacco manufacturing sector to provide adequate information regarding the health impact of their products by ensuring that the information or the advertisement is conspicuously displayed. Moreover, the sale of tobacco products is restricted to underage consumers. The implementation of standardised packaging legislation despite opposition by tobacco manufacturing companies further underlines the government’s commitment to protect consumers. Thus, the UK government extensively committed at protecting consumers by forcing companies to be truthful regarding the health impact of their products.

The UK government’s commitment to protect advertising is further underlined by integration of legislations that restrict businesses from engaging in misleading advertisement. To ensure adherence to this requirement, the government enacted the Control of Misleading Advertisement Regulations Act 1988, which compels businesses to provide truthful information. The rationale of this Act is to ensure that consumers make product purchase decision on the basis of accurate information.  Protection of advertising further encompasses ensuring that customers are provided truthful information regarding product prices. Misleading customers on product pricing constitutes an offence which is punishable under the Consumer Protection Act 1988. For example, a fine may be imposed for such practices.

In summary, the analysis shows that the UK has implemented extensive measures aimed at protecting advertising as a form of commercial expression. However, considering the dynamics nature of the concept of consumer protection, it is imperative for the UK government to progressively review the applicability of the existing consumer protection laws. This move will play a fundamental role in ensuring that the requisite amendments are undertaken hence streamlining the approach within which businesses engage in advertisement.   

 

 

 

 

References

Allen Tony, Age restricted sales: the law in England and Wales (London: Kibworth

            Beauchamp 2015).

Allemano Alberto and Bonadio Enrico, The new intellectual property of health; beyond plain

            packaging (Cheltenham, UK: Edward Elgar Publishing 2016).

Channing John, Safety at work (New York: Routledge 2013) 

Cram Ian, Contested words; legal restrictions on freedom of speech in liberal democracies    (New York: Routledge 2016).

Garde Amandine, Freedom of Commercial Expression and the Public Health Protection in   Europe (London: Cambridge 2010).

Garde Amandine, EU law and obesity prevention (Austin, Texas: WoltersKluwer 2010).

Glazebrook Peter, Blackstone’s statutes on criminal law 2015-1016 (Oxford: Oxford

            University Press 2015). 

Great Britain, Regulation of television advertising; report with evidence (London: TSO

            2011).

Harding Christopher and Kohl Uta, Human rights in the market place; the exploitation of

            rights protection by economic actors (New York: Routledge).

Howells Geraint, The tobacco challenge; legal policy and consumer protection (New York:

            Ashgate Publishing).

Howells Geraint, Ramsay Ian, Wilhelmsson Thomas and Kraft David, Handbook of research

            on international consumer law (Cheltenham UK: Edward Elgar Publishing).

Kolah Ardi, Essential law for marketers (New York: Routledge 2012).

Kolah Ardi, Essential for law marketers (London, UK: Kogan Page 2013).

Louw Andre, Ambush marketing and the mega-event monopoly; how laws are abused to

            protect commercial rights to major sporting events (The Hague: Asser Press 2012).

Maya Hertig Randall, ‘Commercial Speech under the European Convention on Human Rights: Subordinate or Equal?’ (2006) 6, Human Rights Law Review 53.

Moon Richard, The constitutional protection of freedom of expression (Toronto: University

            of Toronto Press 2000). 

Scott Colin and Black Julia, Cranston’s consumers and the law (London: Cambridge

            University Press 2000).

Weatherill Stephen, EU consumer law and policy (Cheltenham, UK: Edward Elgar 2013).

Wild Charles, Electronic and mobile commercial law; an analysis of trade, finance, media

and cybercrime in the digital age (Hatfield, Hertfordshire: University of Hertfordshire 2011).

Winn Jane, Consumer protection in the age of the information economy (Burlington, VT:

            Ashgate 2006).


[1] Moon Richard, The constitutional protection of freedom of expression (Toronto: University

of Toronto Press 2000) 76. 

[2] Winn Jane, Consumer protection in the age of the information economy (Burlington, VT:

Ashgate 2006) 16.

[3] Louw Andre, Ambush marketing and the mega-event monopoly; how laws are abused to

protect commercial rights to major sporting events (The Hague: Asser Press 2012) 496.

[4] Maya Hertig Randall, Commercial Speech under the European Convention on Human Rights; Subordinate or Equal? (2006) 6 Human Rights Law Review 53.

[5] Harding Christopher and Kohl Uta, Human rights in the market place; the exploitation of

rights protection by economic actors (New York: Routledge) 201.

[6] Scott Colin and Black Julia, Cranston’s consumers and the law (London: Cambridge

University Press 2000) 6.

Howells Geraint, The tobacco challenge; legal policy and consumer protection (New York:

Ashgate Publishing) 115.

[8] Howells Geraint, Ramsay Ian, Wilhelmsson Thomas and Kraft David, Handbook of

research on international consumer law (Cheltenham UK: Edward Elgar Publishing) 260.

[9] Allen Tony, Age restricted sales: the law in England and Wales (London: Kibworth

Beauchamp 2015) 27.

[10] Allemano Alberto and Bonadio Enrico, The new intellectual property of health; beyond

plain packaging (Cheltenham, UK: Edward Elgar Publishing 2016) 56.

Cram Ian, Contested words; legal restrictions on freedom of speech in liberal democracies

(New York: Routledge 2016) 198.

[12] Garde Amandine, Freedom of Commercial Expression and the Public Health Protection in

Europe (London: Cambridge 2010) 12.

[13] Weatherill Stephen, EU consumer law and policy (Cheltenham, UK: Edward Elgar 2013)

249. 

[14] Harding Christopher and Kohl Uta, Human rights in the market place; the exploitation of

rights protection by economic actors (New York: Routledge) 211.

[15]  Garde Amandine, EU law and obesity prevention (Austin, Texas: WoltersKluwer 2010)

98.

[16] Wild Charles, Electronic and mobile commercial law; an analysis of trade, finance,

media and cybercrime in the digital age (Hatfield, Hertfordshire: University of Hertfordshire 2011) 67.

[17] Kolah Ardi, Essential law for marketers (New York: Routledge 2012) 186.

 

[18] Channing John, Safety at work (New York: Routledge 2013) 121.

[19] Kolah Ardi, Essential for law marketers (London, UK: Kogan Page 2013) 189.

[20] Glazebrook Peter, Blackstone’s statutes on criminal law 2015-1016 (Oxford: Oxford

University Press 2015) 58.

[21] Channing John, Safety at work (New York: Routledge 2013) 121.  

[22] Great Britain, Regulation of television advertising; report with evidence (London: TSO

2011) 191. 

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