Has the advertising standards authority regained its authority

Newsletters |

7 December 2017

While the Advertising Standards Authority of South Africa (“ASA”) is not quite out of the woods yet, it certainly appears to be recovering much of its former strength.  Much will depend on the outcome of the (potentially large) damages claim against the ASA by the Medical Nutritional Institute (MNI), set down for 18 March 2018 in the South Gauteng High Court.

The ASA is a non-profit, independent body, which self-regulates advertising disputes in the public interest.  It has been, in the past, a speedy and relatively inexpensive dispute resolution forum for both consumers and competitors, and most importantly, addresses advertising which may be considered false, misleading or unlawful in any way.

Due to a number of reasons, the ASA went into Business Rescue in October last year, in an attempt to prevent the organisation from going into liquidation.  The organisation has undergone a major restructuring, with a new management team and board, and reduced staff numbers.

Gail Schimmel, acting CEO while the ASA was in business rescue, has been appointed to the position in a permanent capacity.  She launched an upfront funding drive to deal with the immediate debt, in the form of pre-paid filing/complaint fees which can be used as a credit should the contributor lodge a complaint at any time in the future.

In addition, the ASA is rethinking the levy system as a funding mechanism for the industry body, as many of its marketer members appear to prefer paying a flat monthly fee rather than use the levy system.

The ASA’s jurisdiction to hear matters involving non-members brought into question in the Herbex matter before the High Court (of first instance), which found that the ASA’s rulings against the Company were not applicable/non-binding.  The ASA was accordingly left virtually powerless against any advertising by companies that were not members of the industry body.  

While the matter was appealed, the ASA was “in limbo” until the Supreme Court of Appeal found that the body did have jurisdiction to consider non-members’ advertising (The Advertising Standards Authority and Herbex (Pty) Ltd (902/16) [2017] ZASCA 132).  While the ASA is not able to rule against non-members, and its decisions are not binding on non-members (unless the non-member has agreed to be bound by the ASA’s authority) it is able to rule on whether any advertising is contrary to its Code.  And ASA media members are thus able to choose whether to accept such advertising or not.

This ruling has essentially restored the ASA’s status authority to the way it was prior to May 2016, and KISCH IP looks forward to assisting its clients in ensuring its advertising material complies with the ASA Code, to avoid receiving an adverse ruling, and to assisting its clients in bringing complaints before the ASA.

Juel Barnett
Attorney
Trade Mark Department
Email juelb@kisch-ip.com
Tel +27 11 324 3050