Memorandum submitted by ISBA
ASA/CAP Industry co-regulation
The UK model for "self-regulation"
of advertising in the non-broadcast media has been widely recognised
as effective, efficient and fair. The Advertising Standards Authority
(ASA) is an independent body that implements the Industry's Codes
of Advertising Practice and Sales Promotion (CAP) and is funded
by a levy on advertising media spend collected by the Advertising
Standards Board of Finance (ASBOF). It is applied equally to all
advertisers (other than political parties) and is backed up by
the powers of the Office of Fair Trading (OFT) with respect to
misleading advertising, effectively making the system co-regulation,
or "accredited self-regulation".
Communications Billan opportunity to extend
The proposed reforms in the Communications Bill
provide the right vehicle to extend co-regulation to all media.
The widely respected ASA/CAP system is the role model on which
proposals to cover broadcast advertising will be based.
As the broadcast media adapts to the challenges
of the new media and the burgeoning choices available to viewers
and listeners the dividing lines between the media will become
less distinct. Yet no one doubts the need for standards to be
set and applied. "Self-regulation" within a co-regulatory
framework is a well-tested means to achieve regulation, without
the legislative and organisational hurdles that State-regulation
Government's Communications Bill challenge to
In the Policy Paper, published with the draft
Bill, the Government has noted that it awaits proposals from the
industry before considering the issue of industry co-regulation
further (see note 1). The industry has delayed making these detailed
plans until ground rules for co-regulation ASA style have been
accepted. The principal concern surround definitions (note 2).
Pure self-regulation, where industry draws up codes in consultation
with interested parties, then administers them and applies sanctions
is not one that, in practice, we have adopted in the UK. The ASA
model is a form of co-regulation that gains its strength from
the double authority of industry codes with the back-stop powers
of the Office of Fair Trading. That is to say the codes are not
voluntary in a way that some industry "best practice"
codes would be. It is this co-regulatory model AA/ISBA recommends
for broadcast regulation. It is important to advertisers however
that industry owns the codes and that the implementation of the
codes resides with a fully independent body. A reading of the
Policy Paper leaves open the possibility that the Government wishes
to exercise authority over the codes production and the implementation,
whilst asking industry to pay. This is not a model that is likely
to find support in the advertising and media industries.
Advertising Industry Objectives:
OFCOM will be empowered to effect
a genuine transfer to authority to a new "self-regulatory"
this new "self-regulatory"
body must retain code ownership;
and exclusive rights to consider
include BACC and RACC pre-clearance;
decisions of the self-regulatory
body must be sovereign ie OFCOM cannot overturn them;
OFCOM to retain back-stop powers
to step in when the established means (ie "self-regulatory"
body) have been exhausted; and
there is no transfer of costs without
a meaningful transfer of real authority.
Implications for advertisers
It should be noted that achieving media neutral
co-regulations along the lines of the ASA model would have two
clear implications for advertisers:
a new levy on broadcast advertising
spend to pay for the new system balanced by reduced costs for
transfer of legal liability from
broadcasters to advertisers, as is the case currently with non-broadcast
1. Communications Bill Policy Paper, published
with the draft Bill, noted that the Government awaited proposals
from the industry before considering the issue of industry co-regulation
further. The industry, ie advertisers, agencies and media through
the Advertising Association, however rejects this approach for
good reasons, which are best summed up in the words of the Policy
"OFCOM will therefore be able to apply consistent
overarching content standards to all forms of broadcasting including
advertising and it is to be given principal responsibility for
regulating broadcast advertising. Within this context, there may
nevertheless be the opportunity for a greater degree of industry
co-regulation, based on the development of industry practices
that conform to and contribute to the advertising standards that
are laid down by OFCOM.
Progress has been made with the standards application
and pre-vetting work of the two industry run advertising clearance
centres, BACC for TV and RACC for radio.
We are keen to see further developments building
on this and drawing upon the experience of the Advertising Standards
Authority in running a self-regulatory system. The formal delegation
of OFCOM's powers to set advertising standards is not envisaged
partly because of limitations imposed under relevant EC directives,
but this will not impede the further development of industry co-regulation.
The White Paper set out a challenge to the advertising
industry and to broadcasters to set out proposals for more effective
co-regulatory arrangements. We have yet to see specific proposals.
Although this eventuality is not covered expressly in the wording
of the Bill, the draft legislation allows OFCOM wide flexibility
in the methods it uses for meeting its stated objectives. These
methods would include further industry co-regulation in the event
that suitable proposals come forward."
Industry's position is very clear. "Accredited
self-regulation" or "self-regulation in a co-regulatory
framework" carries with is some basic requirements:
Industry ownership of codes.
Independent adjudicatory body appointed
Industry funding via an ASBOF levy.
2. DEFINING SELF-REGULATION
The issue of definitions is crucial to avoiding
misunderstanding. We generally call the ASA/CAP system self-regulation
rather than co-regulation, which it is in practice.
The problem is that there appears to be no accepted
definitions. The terms are used indiscriminately to describe a
whole range of practices, ranging from near State regulation,
through well-defined systems like ASA/CAP, to loosely designed
The ASA/CAP advertising system is best seen
as an alternative to state legislation. If the industry had not
obliged the Government would have legislated. This marks it out
as very different from sectoral industry "best-practice self-regulation"
What is the difference between Co-Regulation ASA
Style and Best Practice Self-Regulation?
Best Practice Self-Regulation would have:
No legal authority but be administered
typically by a Trade Association with expulsion as the only effective
Genuinely seek to impose standards
above the legal minimum.
Co-Regulation ASA Style may be characterised
Compulsory for all advertisers.
Sets standards that are the minimum
that advertisers must reach.
Is backed up by the powers of the
OFT and by the unspoken threat of Government legislation should
we ever slip below the standards expected by the Government of
But is genuinely self-regulated in:
2. Industry control over appointments
and code committee via ASBOF.
3. Paid for by advertisers.
4. Independence of the Regulator from
Government and advertisers.