Court restores ad watchdog’s powers to deal with complaints against non-members

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The case has its genesis in December 2019 when Colgate lodged a complaint with the ARB, the self-appointed watchdog of the advertising industry.

The complaint was that Bliss Brands, in the packaging of its Securex soap, had breached the Code of Advertising Practice by exploiting the advertising goodwill and imitating the packaging architecture of Colgate’s Protex soap.

Though Bliss Brands is not a member of the ARB, it raised no objection to the ARB’s jurisdiction and participated fully in its hearings, taking the matter all the way to the ARB’s final appeal committee (FAC).

After the FAC dismissed its appeal, Bliss Brands applied to the high court in Johannesburg to review and set aside the FAC’s decision. The court, without a request from any of the parties, questioned the constitutionality of the ARB’s powers.

This prompted Bliss Brands to amend its court papers, which bore little resemblance to the original application.

The high court ruled in favour of Bliss  Brands, declaring that a clause in the ARB’s memorandum of incorporation was unconstitutional and invalid because it permits the ARB to decide complaints concerning advertisements of non-members.

The high court also ruled that the ARB has no jurisdiction over non-members in any circumstances.

The high court also set aside the FAC’s ruling which upheld Colgate’s complaint against Bliss Brands’ soap packaging.

In it judgment on Tuesday, the SCA said Bliss Brands’ submission regarding the jurisdiction of the ARB should have destroyed any court challenge to jurisdiction, or to the constitutionality of the code or memorandum of incorporation.

The SCA said it could have disposed of this appeal solely on the issue of jurisdiction.

However, it was urged by the ARB to deal with the other issues dealt with by the high court, including its pronouncements on the constitutionality of the clause in the ARB’s memorandum of incorporation  and its finding that the ARB may not issue rulings in relation to non-members or their advertising.

ARB said if the SCA did not deal with these issues, this would create legal uncertainty and this, in turn, would impede the ARB  in carrying out its functions as a self-regulating body in the advertising industry.

The SCA said the ARB’s code and memorandum of incorporation constituted the ARB’s empowering provisions.

“The mere absence of a statutory source for these powers is therefore no barrier to the ARB validly exercising public functions.

“To hold  otherwise would invalidate the actions of all other private bodies that perform vital public functions in the public interest, without any empowering statute, such as sports professional bodies, the Press Council, professional associations and the like,” Judge of Appeal Ashton Schippers wrote in his judgment.

The SCA said absent a submission to its jurisdiction, the ARB may only make rulings on the advertisements of non-members for the benefit of its own members, which are not binding or legally enforceable against non-members.

“The impact of ARB rulings on non-members is therefore indirect, in cases where they engage the services of an ARB member to approve, create, disseminate or publish their advertising,” Schippers said.

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