Who: The Advertising Standards Authority (ASA); Apollo Future Technology Ltd; Magflo Ltd; Pixus Online Ltd
Where: United Kingdom
When: 26 June 2024
Law stated as at: 15 July 2024
What happened:
The ASA recently upheld three complaints regarding affiliate marketing schemes run by e-cigarette companies. On 26 June 2024, the ASA released three rulings concerning ads run by the vape and e-cigarette companies Apollo Future Technology, Magflo Ltd and Pixus Online Ltd, in each case directing the respective company that it must not run the ad again.
The websites of the three companies each featured a page encouraging customers or prospective customers to join an affiliate marketing programme, whereby an affiliate promotes the company’s e-cigarette products on various other online channels and, in the case of the latter two, receives a commission.
All three ads were complained about on the same ground: the ASA challenged whether they breached the UK Code of Non-Broadcast Advertising and Direct and Promotional Marketing (CAP Code) by “irresponsibly encouraging the promotion of e-cigarettes and related components online, because unlicensed nicotine-containing liquids and their components cannot be promoted in online media“. CAP Code 22.12 forbids marketing communications in print and in online media with the direct or indirect effect of promoting nicotine-containing e-cigarettes that are not licensed as medicines, unless it is targeted exclusively to the trade. This reflects the regulatory ban on advertising unlicensed nicotine products contained in the Tobacco and Related Products Regulations 2016.
The ASA acknowledged that the three ads were not for specific, named e-cigarette or vape products so did not have the direct effect of promoting unlicensed e-cigarettes. The question for the ASA, therefore, was whether the affiliate marketing schemes of the three companies had the indirect effect of promoting such products.
Because each of the ads encouraged prospective affiliates to promote the sale of the advertisers’ e-cigarettes and their components on social media and other online channels, the ASA considered that each ad had the indirect effect of promoting unlicensed e-cigarettes. It also further considered that the advertisers encouraged prospective affiliates to break the law by promoting the sale of unlicensed nicotine-containing e-cigarettes on online channels in breach of the Tobacco and Related Products Regulations 2016. The ASA considered that this breached the rules concerning advertisers’ social responsibility contained in CAP Code 1.3.
The ASA directed each of the advertisers not to show the ads in the form investigated and warned them to ensure that their future marketing communications do not have the direct or indirect effect of promoting nicotine-containing e-cigarettes. Crucially, the ASA also reminded them of their duty not to incite people to break the law.
Why this matters
This cluster of rulings highlights the ASA’s vigilance with regard to the marketing of nicotine products, whether that marketing is direct or indirect. These rulings should serve as a reminder to sellers of nicotine products that they must tread carefully when considering how to market their products and to seek expert advice when uncertain if their marketing communications fall foul of the ASA’s guidance.
