The Role of Advertising and Self-Regulation in the UK

Introduction

Advertising plays a vital role in the UK and entirely across the globe, owing to the fact that it informs, and promotes healthy competition. The UK facilitates advertising by use of self-regulation. Self-regulation refers to a collective group of individuals coming together with the aim of developing an industry by creating codes of conduct, which are capable of developing the industry. In this regard, there are often no specific rules, but a number of various general rules. The industry does its work in turn, without or with limited influence of the state such as restricting that industries in the UK follow government provided rules or legislation.

The EU advertising law varies within member states. Although advertising had not been addressed specifically on any EU treaty, as it adheres to directives, the EU tradition regulates the advertising industry through directives, which fail to provide sufficient guidance for companies that seek to advertise on pan European basis. The UK advertising industry anticipates the opposition of continued use of directives, thus, it has opted to lobe for self-regulation, in order to avoid the strict rules, which would result to interference of the EU in relation to advertising. This paper proposes the argument that self-regulation in light of advertising, has been of benefit to the UK, despite external controls such as the EU. This is owing to the fact that the benefits of self-regulation outweigh the negatives. The question to this research is as provided below:

Anthony Ogu proposes the following argument: ‘Britain,’ it has been said, ‘appears to be something of a haven for self-regulation.’ The phenomenon has come under increased scrutiny in the recent years and it has been subjected to a greater degree of formalization and

the imposition of external controls. Nevertheless, self-regulation remains as the principal controlling device for a wide range of activities including notably, advertising. Critically examine the regulation of advertising in the United Kingdom in light of this statement. In the UK, two vital bodies carry out self-regulation relating to advertising and those are the Advertising Standard Authority (ASA) and Committee of Advertising Practice (CAP). The non-broadcasting advertising such as press and cinema advertising is subject to the code provided by ASA. In this regard, ASA poses as a self-regulatory body in the UK advertising industry. It entails a code, which does not have a direct statute basis. The ASA board of directors applied for judicial review because it had violated the European Convention on Human Rights that had been instilled in the UK law in 1998 by the Human Rights Acts. According to Article 10(2) of the Convention, the court rules that ASA was not prescribed by the law. However, the application for judicial review was declined. Of importance to note, is that the strength of ASA depends on a long-lasting commitment of the involved individuals in direct marketing, promotions, as well as advertising. Practitioners in all of the spheres share a beneficial interest in ensuring that audiences welcome marketing communications. In an instance where they are misleading, then anyone associated with them is discredited as well as the industry wholly. The UK gives a prominent role to self-regulations through ASA, in order for the body to respond to various concerns, as well as complaints originating from various businesses and even consumers and thus, take significant action towards advertising ads that are misleading, irresponsible, harmful, and also offensive. Moreover, the UK has brought forth the body to be able to monitor ads, thus checking whether they are following rules, and this is in addition to conducting research, with the aim of testing public opinion and identifying where actions need to be taken. On the other hand, the CAP is significantly a

sister organization to ASA and it has the responsibility of writing advertising codes. Both ASA and CAP are obligated to regulate in a way considered to be transparent, targeted, audience-based, consistent, and also proportionate. The role of CAP is precisely ensuring that significant marketing communications that lie within the remit of the code are commissioned, prepared and published in the UK, and as such, comply with the CAP code. In this regard, CAP coordinates all of its members’ activities, in order to achieve the highest level of compliance with the set code.

Self-regulation poses as a vital principle that controls a device for a range of activities. Self-regulation in the UK has brought forth various advantages. Putting into consideration, the Control of Misleading Advertisements Regulations (SI 1988/915), it is evident that ASA made a provision for statutory recognition of effective means of handling complaints. As such, the consumer protection agency was thus required, in regard to the desirability of controlling diverse advertisements through self-regulatory bodies. This provided the legislative underpinning, aiding in self-regulation. ASA poses as a significant regulatory body that can aid in the contributing towards the creation of future legislations. This is owing to the fact that it is regarded as the top most authority on advertising, and it is concerned with societal matters, whereby, it is open to suggestions that may enhance future changes, in regards to regulation. In line with this, the body is fair in assessing transgressions. ASA provides a cheap, fast, efficient, and reliable solutions that can assist in handling consumer complaints. Of importance to note is the fact that the body focuses on priority areas, in order to maximize its impacts whilst in a faster way, purpose to address ads that break rules and those that cause big offences or even potential repercussions for consumers within and outside the UK in a more reliable and efficient way. In addition to this, it is worth noting that in terms of flexibility, ASA’s operations are faster and flexible as compared to if they were controlled by the state. This is owing to the fact that the body is not bound by any legislation. Clearly, ASA encourages advertisers, and any individual with interest in advertising rules or those that are involved in the production of ads to always sign up for update, as well as insight. These provide timely advice on various latest positions of advertising issues. Finally, ASA creates marketing communications that are accurate, ethical and thus, do not mislead consumers to lead to widespread offence and in line with this, it is cost efficient for the UK. However, much ASA is advantageous to the UK advertising, it is evident that of recent, it has faced various criticisms as discussed below.

There are various criticisms that self-regulation in the UK has faced. For example, when here is lack of efficient and effective enforcement and even monitoring, it is evident that businesses in the UK would have themselves the incentive of adhering only to an extent that they deem would be of their interest. Moreover, in an instance where the consequences that relate to non-compliance costs are low, they may be attempted not to adhere. In line with this, ASA may not be in a good position of monitoring business that are not subscribing to rules and the extent to which they propose to comply. Notably, these kinds of problems are referred to as principal-agent problems and they include the ability of bad actors joining the UK advertising without the ‘principal’ knowledge, thus undermining the effectiveness, as well as credibility of self-regulation on advertising. However, on the contrary, state regulations are more objective In line with this, they are strictly monitored and any form of breach results into adverse consequences, which businesses would not wish to encounter. In addition, state regulation enforces its regulations through courts, unlike (ASA), which enforces its self-regulation through an advisory body, which does not consider any law or legislation whatsoever. Self-regulation may be bound to face a risk of regulatory capture,

especially when self-regulation poses to be overly close to businesses, which it is supposed to regulate, sanction or monitor and as such, it is evident that it could fail in exercising its roles effectively. This is unlike state regulation, which is strict to its roles and never puts businesses close. Self-regulation may fail in achieving sufficient market coverage, and as such, it could be ineffective. This may be owing to free-riding behavior. Notably, this is also unlikely to be with state regulation on advertising, as it covers the whole of the UK can capture the entire market. Self-regulation may focus on favoritism, where the structure that governs ASA may be dominated by actors that influence and resource to organize and thus run it. For instance, this could favor the interest of long-established firms. Additionally, the benefits associated with flexibility, as well as swift responses towards rapidly evolving environment, may thus be lost is such kind of situations, especially if dominant firms purpose to pursue their interests in preserving the set status quo. Self-regulation often leads to distortion in competition. This is owing to the fact that as with the forms of regulation, it can create entry barriers and thus distort competition through accreditation bodies and licensing that unfairly discriminate again some advertising at the national and even transnational level. In terms of accountability, it is worth noting that unlike state regulation that may be subject to legal action, as well as formal review if not administered accordingly, the effectiveness and operation of ASA may be subject to limited or even no evaluation and as such, resource may be lacking if the body fails to fulfill its objectives. Finally, the establishment and operation of self-regulation may purposely impose high direct costs on advertising, which in turn may be passed to consumers. On the contrary, state regulation would often have a lower direct impact.

Conclusion

Overall, it should be noted that indeed, the UK advertising industry opposes continued directives use, thus, it has opted to lobe for self-regulation, in order to avoid the strict rules, which would result EU interference. It has been noted that the above explanation prove that the advantages brought forth by ASA outweigh the disadvantages. However, it is also worth noting that the body has also faced much criticism. With judicial review, presence of ASP, being a public body, which reacts is significant, yet strict ways against self-regulated advertising as well as an advisory panel, ASA has been able to counter all the challenges that has come its way. These efforts have enables ASA to be favorable for the UK advertising.

Bibliography

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