Select Committee on Culture, Media and Sport Fifth Report

Annex B: Examples of co-regulation

A. Advertising Standards Authority

Forty years ago the Advertising Association established the Committee of Advertising Practice (CAP), an industry body to draw up a Code of Practice for advertisers, agencies and media. In 1962 the industry established the Advertising Standards Authority (ASA) under an independent Chairman, to adjudicate on complaints about breaches of the Code. The stated aim was to ensure that advertisements are 'legal, decent, honest and truthful'. The majority of complaints are about misleading advertising. Under the self-regulatory system advertisers have to be able to prove the claims they make if challenged. In 2001 the ASA considered complaints about 10,527 advertisements, and formally investigated and upheld complaints about 652 of them. The Code bans any confusion of advertising with editorial material and with private correspondence.

The vast majority of advertising in the UK was said now to comply with the Code. Self-regulation means that advertisements that break the Codes can be withdrawn without resort to legal bans. Advertisers who flout the rules can be denied access to newspapers, magazines, poster sites, direct mail or the Internet. CAP interprets ASA rulings to the industry and helps advertisers to comply with the Codes through Copy Advice and Help Notes. Self-regulation in this area is argued to be flexible in the light of new situations or products. The Government has indicated that it considers the self-regulatory system to be effective: "the success of self-regulation is due to the hard work of many, including the ASA. But self-regulation could not work without the active participation and commitment of the advertising and publishing industries. The system also has a high level of recognition from the public and is important to consumer confidence in advertising" (Parliamentary Under-Secretary of State, Department of Trade and Industry, 2003).

Since 1988, self-regulation have been backed up by the Control of Misleading Advertisements Regulations. The ASA can refer advertisers who refuse to co-operate with the self-regulatory system to the Office of Fair Trading (OFT) for legal action (see also Annex D). The OFT's role was mainly to support and reinforce the controls exercised by other bodies where these have been unable to take effective action. The OFT has stated that there are rare instances where it would act unilaterally. Most complaints about misleading advertisements are handled by the ASA and the trading standards service (although the ITC, Radio Authority also have a role as do some other agencies such as the Financial Services Authority and the Medicines Control Agency, handling more specialized advertising complaints). The Regulations also impose a statutory duty on the Director General of Fair Trading to have regard to the benefits of self-regulation in exercising functions defined by them.

B. ICSTIS—Independent Committee for the Supervision of Standards of Telephone Information Services

ICSTIS was an independent industry-funded regulator responsible for the supervision of Premium Rate Services which now operated across all forms of communications devices ranging from fixed telephone services, mobile text services, certain Internet services and more recently some of the interactive elements of TV services such as some found on the Sky platform. The co-regulatory model for supervising this sector appeared to be unique. ICSTIS was supported by all UK telecoms operators and a Condition in DTI network licenses underpinned this. The Communications Bill would alter arrangements slightly with ICSTIS appearing on the face of the Bill in Clauses 116-120. There was clear input from all stakeholders when determining the Code after wide consultation. The Code was then approved by the Director General of Oftel (soon to be Ofcom). ICSTIS members were independent of the sector with no direct interests as a condition of appointment. ICSTIS had "teeth" in terms of its ability to apply sanctions to providers of services who breached the Code. This ranged from warnings to unlimited fines (the highest so far having been £100,000) to a complete bar of the services in question. Like statutory bodies, ICSTIS is a public body subject to Judicial Review and has in place independent appeals mechanisms to ensure complete compliance with the Human Rights Act, specifically the ECHR Article Six provisions in relation to the right to a fair and impartial tribunal hearing.

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