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ADVERTISING STANDARDS BODY SLAMMED BY HIGH COURT

ADVERTISING STANDARDS BODY

SLAMMED BY HIGH COURT

Anthony Rees

(Secretary : TNHA)


The private company known as the Advertising Standards Authority of South Africa (ASA) was ordered by the Gauteng High Court on the 5th of May to stop accepting complaints or making rulings on advertisements published by non-members.  The interdict effectively prohibits the ASA from banning ads by marketers of natural health products (and any other advertiser in any industry) which do not subscribe to the ASA’s private Advertising Code.

In August last year we broke the story in our newsletter about the difficulties manufacturers and distributors of natural health products were experiencing with the ASA, as well as the unscrupulous manner in which this private company was misrepresenting itself to industry and the public.

One company which has been at loggerheads with the ASA is the well-known slimming product manufacturer, Herbex. After numerous complaints were lodged against the company’s adverts by a serial anti-CAM campaigner, the company were forced into a costly appeal processes to defend their marketing.   This eventually resulted in a final appeal hearing, presided over by retired Judge Kate O’Regan, who was employed by the ASA.  Herbex lost their appeal but were not willing to submit itself to the ASA’s unlawful jurisdiction, and approached the Gauteng High Court to obtain an interdict against the ASA from making further rulings against them.
THE ASA IS NOT A STATUTORY ADVERTISING REGULATOR
As a private limited company the ASA has no statutory functions or powers of censorship.  Despite the word  ‘Authority’ in its name,  plus words liberally used in its official correspondence like ‘rulings’ and ‘appeals’,  and hiring retired High Court judges, it is anything but a government marketing enforcement agency. In the complaint, Herbex said the ASA misrepresented itself by stating that it had a mandate from the Medicines Control Council in terms of the Medicines and Related Substances Act (Act No. 101 of 1965)  to act on its behalf in regulating false advertising of medicines.
The court agreed this was a misrepresentation. A statutory body such as the MCC has no legislative authority to delegate its primary functions to a non-statutory organisation.
The ASA is essentially a private arbitrator between fourteen media and trade organizations (and by extension their members), and the public who complain about misleading or false advertising. Of the 14 affiliate clients (members) of the ASA which subscribe to their Advertising Code,  the Health Products Association of South Africa (HPA), the Cosmetic, Toiletry & Fragrance Association (CTFA), and the Direct Marketing Association (DMA) represent natural health product companies.
Therefore companies which advertise natural health products, and which belong to these associations may be subject to the ASA and its Advertising Code.
THE INTERDICT

Herbex was not a members of any of the above organizations, and therefore not subject to the ASA or its Advertising Code. In his judgement Judge Du Plessisand granted of the final interdict against the ASA, and made the following order:

  • The ASA has no right to pursue or regulate the advertising of non-ASA members.
  • The ASA has no right to make ‘superfluous orders’ or ‘rulings’ against non-members of the ASA, including issuing advert alerts to the media to prohibit them from carrying advertising.
  • The ASA may not coax unsuspecting non-members to participate in its activities.
  • All prior rulings made against Herbex are to be voided.
  • The ASA must delete all references to any rulings against Herbex on its website and official publications.
  • The ASA must make changes to its letters it sends to companies which it receives complaints about. These letters must indicate that if a company is not an ASA member, they are not bound to participate further and may ignore the correspondence.
  • The ASA had no lawful right to unilaterally charge appeal fees to Herbex to defend its advertising and rights when it was not bound to participate in its processes.
  • The ASA is to repay the R169 500.00 Herbex has paid for appeals in the past.
  • The ASA must  pay the legal fees of Herbex in the interdict application, including the costs of two legal counsel.
PRECEDENT
This case is ground-breaking and lays the ground for other natural health product companies who are not ASA members to seek similar redress.  It may even open the door for companies to seek punitive damages against the ASA for losses occurred as a result of having advertising campaigns unlawfully banned by the media, and the goodwill they lost when they were publically censured.
YOU BETTER CALL SAUL!
If you or your company has found itself in the same predicament as Herbex, you may consider contacting Saul Shoot of Fluxmans Attorneys, who represented them. Saul has been at the forefront of tackling the ASA over the years, and is well known for his articles in the media about legal problems related to this infamous organization.  Saul can be emailed at sshoot@fluxmans.com or contacted by phone on 011 328 1700.
THE TNHA IS NOT A MEMBER OF THE ASA
The TNHA has never been a member of the ASA, nor intends being associated with this company.

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