Ads & Brands Law Digest: February/March 2025 – Advertising, Marketing & Branding

Welcome to February’ and March’s Ads & Brands Law
Monthly Newsletter. We cover legal and regulatory developments from
the last few weeks relevant to advertising, marketing and
brand-owning businesses.

We hope you enjoy it.

(B)CAP issues further consultation on the implementation of new
rules on ads for “less healthy” food and drink
products

In January (B)CAP had decided to rethink its draft guidance on
“less healthy” food and drink products in the context of
the new restrictions coming into force in October. As a recap, the
less healthy product advertising rules will prohibit ads for
“identifiable” less healthy products from being included
in Ofcom-regulated TV services and on-demand programme services
between 5:30am and 9:00pm, and from being placed in paid-for space
in online media at any time. (B)CAP consulted in late 2023 but
indicated that it was rethinking aspects of the guidance,
particularly brand advertising. It felt that it needed to better
reflect the law; in particular, about how ads that do not include
direct references to food and drink products, might still fall into
the scope of the new legislation if the use of branding or other
content deems the ad to be for an “identifiable” less
healthy product (or products).

(B)CAP has now issued a new consultation. So, what does it
say and what could it mean for advertisers? The crux of the matter
is determining the meaning of “identifiable”. Under the
legislation, a product is identifiable, in relation to
advertisements, if people in any part of the UK could reasonably be
expected to be able to identify the ad as being for that product.
However, the ASA is likely to have primary regard to the content of
an ad when assessing how people perceive it. Crucially, where the
advertiser is strongly associated by persons in the UK with the
manufacture or sale of a less healthy product or a range of less
healthy products, the use in an advertisement of a generic
representation of that product or products in a way that is likely
to bring to mind that product(s) would increase the probability of
the advertisement being restricted.

Advertisers should also remember that where the less healthy
product rules do not apply, advertisements for HFSS products must
comply with the existing rules on HFSS advertising. These restrict
the media environments where HFSS advertisements can appear and, if
they are allowed, control the content of such advertisements,
including by limiting their appeal to children.

The consultation ends on 18 March 2025.

CAP issue update on AI, advertising, and the policy
landscape

CAP has issued an update on AI and advertising. It says that as
well as using AI to support effective regulation, the ASA is a
proactive regulator, constantly trying to understand emerging
issues and monitor compliance with the rules. Its guidance makes
clear that some of the advertising-related issues which AI may
present are already dealt with by the Codes, including misleading
images and claims, misleading endorsements and testimonials, and
harmful or offensive imagery. Recent rulings have demonstrated that
harmful, offensive, and socially irresponsible AI-generated images
will breach the Code, just as any other type of image would. The
ASA also has a Scam Ad Alert System, which it operates in
partnership with major online ad and social media platforms to help
tackle scam ads online, some of which involve the use of AI. CAP is
aware that developments in public policy around AI have the
potential to affect the way advertising which uses AI is regulated.
CAP is closely monitoring policy developments both within the UK,
and internationally, to ensure that it can respond as
necessary.

CAP issues guidance about dark patterns and advertising

Sometimes referred to as ‘Online Choice Architecture’ or
‘Deceptive Design Patterns,’ Dark Patterns are a range of
design decisions implemented to manipulate consumer behaviour in
online spaces. There is concern that these practices cross the line
beyond persuasion by exploiting human cognitive biases, confusing
and coercing consumers into making decisions they may not have
intended to make.

Many of the practices considered ‘Dark Patterns’ have
long been regulated under the CAP Code. Their use in advertising is
not inherently problematic but they can mislead. CAP has issued guidance on various rulings by the ASA
which deal with subjects such as choice structure – the design and
presentation of options, choice pressure – the indirect influence
on a consumer’s choices; and choice information- the content
and framing of provided information.

Welsh government lays new HFSS regulations

The Welsh government has laid draft Food (Promotion and Presentation) (Wales)
Regulations 2025 before the Welsh Senedd. The draft regulations
follow a consultation last year, and they will introduce new rules
that restrict price and location promotions of specific categories
of pre-packed products high in fat, sugar and salt.

The draft regulations largely mirror the food promotion rules in
England, which are partly in force already, and the rest come into
force in October this year. The plan is for the new Welsh
restrictions to apply from 26 March 2026. This allows for a
12-month implementation period. The Welsh Government plans to
publish supporting guidance in due course.

CMA makes recommendations following infant formula milk
study

The CMA has published recommendations following its infant
formula milk study. It says that parents should be provided with
timely, clear, accurate and impartial information on nutritional
sufficiency of all infant formula products as early as possible.
Where parents are given infant formula in healthcare settings,
labelling should be standardised to reduce the influence of
branding on their decision making. For example, branded formula
could be put into non-branded containers, or the NHS could have a
white-label formula. Nutritional sufficiency should be displayed
clearly and prominently on shelves and when buying online.

In addition, the CMA says that in store, all brands of infant
formula should be displayed together and in a separate cluster from
other formula milks to enable quick and easy price comparisons. All
packaging should clearly display information on nutritional
sufficiency. Claims that are intangible, or cannot be easily
checked by parents, should be banned. Like infant formula,
advertising (including price promotions and deals) for follow-on
milks should be banned. To help shops, manufacturers and enforcers,
government should clarify what constitutes ‘advertising’,
outlining exactly what shops and manufacturers can and cannot do
regarding formula milks. Parents should be allowed to use gift
cards, vouchers, loyalty points, and coupons to purchase infant
formula. Finally, the CMA recommends strengthening the roles played
by relevant authorities so they must approve the packaging of all
infant formula products before sale. At present, companies can put
products onto the market before the relevant authority has reviewed
the label.

European Commission withdraws planned ePrivacy Regulation

It’s been nearly four years since we reported that EU Member
States agreed a final draft text for the proposed Regulation on
Privacy and Electronic Regulations (ePrivacy Regulation), to
replace the existing ePrivacy Directive (2002/58/EC) – noting
that the next step was negotiations between the Council of the
European Union and the European Parliament. Now it seems (perhaps
unsurprisingly) that those negotiations have broken down and the
ePrivacy Regulation’s fate is sealed, as the European
Commission withdrew it in its work programme for 2025, noting that there is
“no foreseeable agreement” and that the proposal is now
“outdated in view of some recent legislation in both the
technological and the legislative landscape”.

ICO issues priorities for online advertising industry

The ICO has issued its priorities for the online advertising industry
during 2025. It expects organisations to give people meaningful
control over how they are tracked online. The strategy sets out how
it will promote compliance with the law in 2025 to obtain a fairer
online tracking ecosystem for people and business. It says it will
clarify how the law applies and the ICO’s expectations in
guidance and other publications, engaging with industry to shape a
more compliant and privacy-oriented ecosystem. scrutinising the
compliance of organisations across the online tracking ecosystem;
and investigating and enforcing against organisations that do not
comply. It identifies four main problems: deceptive or absent
choice, uninformed choice, undermined choice and irrevocable
choice.

The ICO says that it will make it easier for publishers to adopt
more privacy-friendly forms of online advertising, ensure
publishers give people meaningful control over how they are tracked
on websites, ensure that people have meaningful control over
tracking for personalised advertising on apps and connected TVs,
confirm how publishers can deploy ‘consent or pay’ models
in line with data protection law, supporting their economic
viability, provide industry with clarity on the requirements of
data protection law, leaving no excuse for non-compliance,
investigate compliance failures in the wider adtech ecosystem and
support the public to take control of how they are tracked
online.

Court of Appeal finds look-alike packaging took unfair
advantage of trade mark

For many years, brand owners have bemoaned the fact that there
is no law of unfair competition in the UK (such as is found in many
continental jurisdictions) to outlaw unfair copying of get-up and
packaging by competitors selling cheaper look-alike products. The
campaign is still ongoing to provide an enforceable legislative
remedy, but in the meantime the Court of Appeal has given some
important comfort – at least to those brands that have
registered trade marks and built up a protectable reputation for
their packaging. In such cases, and with the right supporting
evidence, the Court has confirmed that a competitor who launches a
copycat product and intentionally takes unfair advantage of the
branded product can be found to have infringed the trade mark under
section 10(3) of the Trade Marks Act (TMA).

Readers of this Digest will probably be familiar with the facts
of the case. Thatchers had developed a successful Cloudy Lemon
Cider brand of canned cider, and had registered a device trade mark
in 2020 representing their packaging design used both on the cans
and the four-pack boxes in which they were sold (the design had
distinctive use of lemons, lemon leaves, background colouring and
layout/lettering). Aldi launched a similar lemon cider product in
May 2022, and Thatchers brought proceedings in the Intellectual
Property and Enterprise Court (IPEC) alleging that the Aldi
packaging was so similar as to infringe its trade mark. Thatchers
were not successful before the IPEC judge, but appealed one aspect
of the judgment – relating to taking unfair advantage under
section 10(3) TMA – to the Court of Appeal.

With Lord Justice Arnold giving the leading judgment, the Court
of Appeal found in Thatcher’s favour on the appeal.
The existing EU and UK case-law had established nine conditions for
Thatchers to demonstrate in order to succeed under section 10(3),
to quote Arnold LJ: “(i) the trade mark must have a reputation
in the UK; (ii) there must be use of a sign by a third party within
the UK; (iii) the use must be in the course of trade; (iv) it must
be without the consent of the proprietor of the trade mark; (v) it
must be of a sign which is identical or similar to the trade mark;
(vi) it must be in relation to goods or services; (vii) it must
give rise to a “link” between the sign and the trade mark
in the mind of the average consumer; (viii) it must give rise to
one of three types of injury… (a) unfair advantage being taken of
the distinctive character or repute of the trade mark, (b)
detriment to the distinctive character of the trade mark (often
referred to as “dilution”) or (c) detriment to the repute
of the trade mark (often referred to as “tarnishment”);
and (ix) it must be without due cause.”

The main areas in dispute on the appeal related to establishing
“unfair advantage” or “detriment” under point
(viii), although Lord Justice Arnold also criticised the IPEC judge
for under-estimating the similarity between Thatcher’s
registered mark and the Aldi packaging. The Court of Appeal
rejected Thatchers’ argument of “detriment” or
“tarnishment”, as there was no evidence that consumers
thought less favourably of their mark. But on “unfair
advantage” the Court found in Thatchers’ favour – the
close copying of elements of their mark in Aldi’s packaging,
combined with very little promotion by Aldi of their new product,
led to the inference that Aldi had intended to take advantage of
the reputation of the mark (and their sales figures, despite lack
of promotional spend, showed that this had been the result). The
success of the Aldi lemon cider depended upon “riding on the
coat-tails” of the reputation of the Thatchers product, using
a similarity in packaging to create the necessary link in the minds
of consumers. Aldi was thus found to have infringed the Thatchers
mark under section 10(3) TMA.

It has been suggested that Aldi may try to appeal the ruling to
the Supreme Court, although that has yet to be confirmed (and they
may not be granted permission to do so). In the meantime, this is
an important judgment for brand-owners in the battle against
look-alike competitors. It demonstrates the value of investing in
suitable trade mark registrations for elements of packaging, and of
investing in promotional activities (and record-keeping) to
establish the necessary reputation upon which section 10(3) claims
depend.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.