Do not embellish: Know your law relating to labelling and advertising

South African Laws protect against unfair marketing and business practice including dishonest advertising and labelling. This principle is encoded in the Advertising Standards Authority (“ASA”) Code of Conduct – which requires honesty in adverts as well as calls for factual claims and disallows misleading claims. The Consumer Protection Act 68 of 2008 (“CPA”) reinforces the requirement of disclosure of all relevant information and that such disclosure be in plain and understandable language and factual.

Africa’s Regional Economic Institutions

These principles of South African Law are not foreign to other jurisdictions and business in Africa can benefit from taking heed of these principles. COMESA, (Common Market for Eastern and Southern Africa) an African regional economic community’s Competition Regulations protect consumer rights against false or misleading representations, protects against unconscionable conduct in consumer transactions, provides for product liability and safety and information standards, and provides for compulsory product recall.

Note: South Africa is not a COMESA member state. Companies need to ask: Will ECOWAS, CEN SAD, ECCAS, IGAD, UNION DU MAGHREB and SADC follow suit? This is worth watching out for as the actions of these regional economic instuitions too, may have an effect on transactions in Africa.

SUGGESTED LEGAL GUIDELINES FOR COMPANIES

How companies can prevent / minimise legal claims for unfair advertising and labelling:
– Have an internal company guide – which sets out the legal guidelines for all adverts in whatever format or media, be they ATL (above the line) BTL (below the line) and for Public Relations (“PR”) releases.

– Ensure marketing teams and PR teams are trained on this protocol. Once trained: retrain to ensure compliance as these are generally the teams that are involved in the crafting or support of adds/ releases. At the same time make sure your external add / PR agency is fully compliant and aware of the laws relating to marketing compliance.

– Make sure all adverts/ PR releases are reviewed internally by internal counsel or where applicable external counsel, before flighting or publication.

LEGAL REVIEW

– Ensure both a factual and legal review and minimise potential CPA claims as well as minimise ASA review and potential penalties including take down / recall / amend/ make good notices and actions.

– Counter against trademark infringement as legal review will ensure a Trade Mark scoping of existing marks both locally and globally.

– Propel you to consider a domain registration for new companies, product phrases and trend phrases before a public marketing campaign.

– Prevent false marking if an advert / product imprints the word “patent” to an unpatentable or unpatented item.

– Identify any unauthorised use persons or portraits – that have been used without agreement or if by agreement propel the crafting/ review of an

Endorsement agreement

– Preclude – unfair comparative labelling and advertising – which promote your product as superior to your competitor without any factual and objective basis.

It is recommended that an Advertising Control Sheet be maintained. This will ensure a sense of control and accountability, as all advertorial and PR releases will be documented. This should contain a provision that all adds/ materials be sent for Legal Review and if sent internally, for In-House Legal to confirm whether they have been reviewed or not. External Legal Reviews should be signed off by external counsel.

Companies need to be proactive on legal implications and safeguards as they pioneer and flight adds in different terrotories and in different formats and media. Companies need to Know the Law relating to Advertising and Labelling in country as well as regionally.

More information on advertising and labelling can be found in “Do not Embellish” available in Business Brief June/ July 2013 Vol. 18  No. 3