After declaring it had lost its patience with Ryanair for frequent breaches of the CAP Code, the ASA referred Ryanair and its advertising materials to the OFT for further sanctions. Did the OFT punish Ryanair or seek to reach a truce, Anna Montes reports from the front line.
Topic: Regulatory
Who: Office of Fair Trading
When: 3 July 2009
Where: United Kingdom
Law stated as at: 31 July 2009
What happened:
Over recent years, complaints concerning Ryanair advertising campaigns have often landed on the desks of those at the Advertising Standards Authority (ASA). Back in April 2008, the ASA decided enough was enough and took the rare step of referring Ryanair to the Office of Fair Trading (OFT) for further sanctions. The ASA made it clear that it had "lost patience" with the Ryanair after filing several adjudications against its campaigns. When quoting its grounds for such a referral, the ASA explained that Ryanair's repeated refusals to confirm the number of flights available in a "£10 seat offer" advertised in national newspapers in 2007, together with its frequent breaches of the CAP Code over a two year period, had left it with no other option than to make such a referral. The ASA believed that Ryanair was persistently misleading consumers by:
- making exaggerated claims about the extent of availability of flights at advertised prices;
- advertising prices that were not inclusive of tax 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 made in its campaigns.
The ASA can impose a range of sanctions for non-compliance with the CAP Code but many advertisers believe the ASA is still without teeth. One sanction it has in its armoury where persistent offenders are concerned is to refer them to the OFT for further action against them. Nowadays, such action will be sought under the Consumer Protection from Unfair Trading Regulations 2008 or the Business Protection from Misleading Marketing Regulations 2008 as applicable. In this particular case, rather than be remorseful Ryanair decided that in turn it would refer the ASA to the OFT too – for "unfair procedures, bias and false judgments".
The OFT stepped in to try to resolve the battle and the outcome is that Ryanair has now agreed to make voluntary changes to its website and other advertising materials going forward. The changes Ryanair has agreed to make to its website are:
- to provide clear information about its "price guarantees" and to qualify any statements that it is guaranteed to offer the lowest prices where such qualification is required;
- to give greater prominence on its website and in e-mail promotions to links that contain information about optional services and charges (such as those relating to checked-in luggage) and any terms and conditions that apply to promotional offers (such as the dates on which prices advertised as part of an offer may not be available).
It therefore appears that the OFT has been able to negotiate a truce between the ASA and Ryanair and the OFT felt the result would lead to better information being available to consumers.
Why this matters:
This case has been interesting to follow as it largely concerned issues with an advertiser's website materials. Of course, the CAP Code does not cover advertising materials placed on an advertiser's own website, only ad materials placed on paid-for online space, such as banner ads and pop-ups on third party websites. Ryanair's own website materials therefore fall outside the scope of the ASA's remit. By getting the OFT involved however, such materials have been included within the scope of discussions that took place. This referral also reminds the advertising industry that the ASA expects advertisers to work with the self-regulatory system and that if they do not, the ASA is willing to make referrals to the OFT as may be required to ensure compliance. Unlike the ASA, the OFT can seek injunctions or require undertakings from advertisers.
Could this now lead to a truce between the ASA and Ryanair? One thing unclear from the press releases that have been issued by the ASA and OFT is whether the agreement reached between the OFT and Ryanair took the form of formal undertakings and therefore whether the OFT will impose sanctions on Ryanair if it fails to comply with their arrangement. This remains to be seen……
