War has broken out again between Ryanair and the ASA with a referral and a counter-referral to the OFT! Will Ryanair be brought to court by the OFT or was the ASA biased against the low cost airline? After more than 50 flights on Ryanair, Omar Bucchioni is well placed to report.
Topic: Regulatory
Who: Advertising Standards Authority and the Office of Fair Trading
When: April 2008
Where: UK
Law stated as at: 16 April 2008
What happened:
The Advertising Standards Authority (“ASA”) has recently taken the radical step of referring Europe’s largest budget airline – Ryanair – to the Office of Fair Trading (“OFT”) under the Control of Misleading Advertisements Regulations 1988 as amended (“CMAR”) asking to consider taking action against the budget airline Ryanair.
This decision was taken by the ASA after banning the ninth Ryanair advertisement in only two years.
As reported in the ASA News website, the ASA found that Ryanair were persistently misleading consumers by:
- Making exaggerated claims about the extent of availability of flights at the advertised price;
- Advertising prices that were not inclusive of taxes and charges;
- Making misleading and denigratory comparisons with competitors;
- Not stating clearly significant restrictions that would exclude customers from taking advantage of an offer; and
- Not providing evidence to prove the claims they were making
ASA referrals to the OFT a rarity
The majority of UK advertising is within the Codes. When the ASA Council upholds complaints most advertisers agree to change or remove the ad. The ASA said that Ryanair showed unwillingness to comply with ASA rulings and for this reason ASA is now looking for the backing of the OFT. Formal referrals to the OFT by the ASA are quite rare: the last case was in 2005 against Tower House Promotions.
As a counter-referral, Ryanair has already submitted its own formal complaint to OFT about its treatment by the ASA, accusing it of demonstrating “a repeated lack of independence, impartiality or fairness where Ryanair is concerned by making factually inaccurate and untrue findings in response, in some cases, to totally baseless and unsubstantiated alleged complaints”.
However, the ASA says that Ryanair’s claim is “irrelevant”, as “the burden of evidence is on the advertiser”.
The CMARs define an advert to be misleading “if in any way, including its presentation, it deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and if, by reason of its deceptive nature, it is likely to affect their economic behaviour or, for those reasons, injures or is likely to injure a competitor of the person whose interests the advertisement seeks to promote.”
The test is therefore an objective one and most importantly it is NOT necessary to prove actual deception. The likelihood of deceiving the “average consumer” is sufficient for an advertisement to be held misleading.
OFT procedure and Court powers
The Director General of Fair Trading has a duty to consider complaints taking into account all the interests involved and in particular the public interest; and the desirability of encouraging the control, by self-regulatory bodies (i.e. ASA), of advertisements.
If the OFT finds that an advertisement is misleading it can take court action for an injunction against directors or senior managers responsible for the publication of the advert. This option is not open to the ASA.
The court can then order any person responsible for the publication of an advertisement to stop any further publication. This can cover other advertisements likely to convey a similar impression, and may also prohibit the advertiser from making the same claims or comparisons about other products or services. The injunction can be granted without proof of actual loss or damage or without proof of intention or negligence on the advertiser’s part. Failure to obey an injunction could result in proceedings for contempt of court and potentially even prison.
Why this matters:
This is more than a simple enquiry into Ryanair advertisements. It comes at a very difficult time for the advertising industry, which is being pressured by the Government for failing to exercise control over online advertising. The Government is threatening the industry to introduce new legislation if the self-regulatory body will not increase its currently limited power in the online field.
Also, whatever becomes of the OFT referrals in this case, the Consumer Protection from Unfair Trading Regulations 2008, which will come into force on 26 May 2008, will give consumer law enforcement agencies, including the OFT, wider options to bring prosecutions against misleading advertising practices. “Established means” such as the ASA are still intended to be the forum of first resort in most advertising cases, but serial CAP Code offenders may in future have their collars felt by other “means” which have sharper teeth.
