A new Appendix has been included in the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (the CAP Code), which will, from 7 December 2021, apply to aspects of advertisements on VSP services that are subject to statutory regulation under the Communications Act 2003 (as amended by the Audiovisual Media Services Regulations 2020). The Appendix sets out the rules reflecting the new statutory requirements.

CAP says that the Appendix does not introduce new requirements for VSP advertising: VSPs are already required, under law, to comply with them and the Appendix is consistent with the principles of the CAP Code. Adding these requirements to an Appendix of the CAP Code means that CAP can take action on suspected breaches against the VSP provider without the need to refer to Ofcom to use its statutory enforcement power.

CAP explains that the rules in the new Appendix directly mirror legal requirements for VSP advertising that have been in place since November 2020. As the ASA is the independent UK regulator for advertisements, Ofcom designated CAP as the appropriate regulatory authority to deal with complaints about VSP-controlled advertising in the first instance. Ofcom will act as a backstop regulator, which means that CAP can refer cases to Ofcom if advertising continues to appear despite an ASA ruling against it.

Not all VSP advertising is subject to the new Appendix. Only advertisements on services that are subject to statutory regulation under the 2003 Act are affected. The statutory framework for the regulation of VSPs is set out in Part 4B of the 2003 Act and providers of such services are legally required to notify Ofcom that they are operating.

Under the 2003 Act, it is the VSP provider that bears the responsibility for advertising that they market, sell or arrange, i.e., advertising that they control. Ofcom has published guidance on the issue of control. The new Appendix applies to the VSP. This is similar to Appendix 2 (“Advertising rules for on-demand services regulated by statute”) but different from the rest of the rules in the CAP Code, which apply to the marketer.

While the ASA already considers complaints about VSP advertisements under the CAP Code, in certain cases it will now consider complaints under the Appendix instead. However, CAP says, VSP advertising will continue to be subject to the main CAP Code. As with all other non-broadcast marketing communications, the advertiser bears the primary responsibility for ensuring compliance with the CAP Code. The Appendix, however, contains additional rules directly derived from the 2003 Act for which the provider of the media service bears the primary responsibility.

If CAP investigates complaints about an ad on an Ofcom-regulated service, it explains that it will contact the marketer about potential breaches of the main CAP Code rules and inform them if it is also contacting the VSP about potential breaches of the Appendix rules. Conversely, CAP will contact the VSP about potential breaches of Appendix rules and inform the marketer that it has done so.

CAP will also continue to contact VSPs about potential breaches of CAP rules relating to taste and decency or social responsibility. Although service providers are not legally responsible for compliance with these rules, CAP routinely contacts media owners when considering these aspects of the CAP Code to ensure it takes account of editorial context when considering such complaints.

The usual ASA sanctions will apply, such as the requirement to have ads that are found in breach of the Code removed or amended, and the publication of a ruling.

However, CAP’s designation by Ofcom means that it has access to a new sanction: failure to comply with the rules in the VSP Appendix may result in the matter being referred to Ofcom with a view to Ofcom considering whether the VSP has contravened the relevant requirements of the 2003 Act. Ofcom’s enforcement powers include the power to issue an enforcement notification setting out steps to remedy the breach and/or to impose a financial penalty. In some circumstances, Ofcom also has the power to suspend or restrict a service. To read CAP’s announcement in full and for a link to the new Appendix and other related information, click here.