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YouTube virals must play by US ad rules

UK advertising rules may change to close loophole

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Advertising claims made in videos on YouTube are subject to the same standards of truth and accuracy as ads that appear in traditional media, according to a US advertising watchdog. Such ads can escape the UK regulator's remit, though.

A group of advertising industry stakeholders is reviewing UK advertising rules. Its recommendations may include the extension of regulation to advertising claims on companies' own websites, which are currently exempt, and videos that appear on sites like YouTube.

In the US, industry watchdog the National Advertising Division (NAD), part of the Council of Better Business Bureaus, made clear last week that YouTube falls within its regulatory remit.

NAD examined a video clip released by Cardo Systems, a maker of Bluetooth headsets, which appeared on YouTube. It showed people placing their mobile phones next to popcorn kernels, which appeared to make the kernels pop.

NAD said it was concerned that, while the scene depicted was implausible, the video may have communicated the message "that cell phones emit heat and/or radiation at a very high and unsafe level and that using cell phones without a separate head-set may be dangerous to users".

"In non-traditional media, to the extent that advertising claims are communicated, advertisers are required to substantiate those claims with competent and reliable scientific evidence," it said.

NAD did not ultimately rule on the merits of the case because it found that the video had been discontinued before its inquiry opened. But it made clear that viral videos and ads posted on YouTube were within its remit.

NAD cited an earlier ruling as authority that clips placed on video-sharing websites "when controlled or disseminated by the advertiser may be considered national advertising".

That case involved an advert for a Dyson vacuum cleaner that appeared on YouTube. It claimed that rivals' cleaners clog and lose suction while a Dyson model performs with no clogging and no loss of suction. One of the featured rivals said that Dyson's claims were false and based on unreliable and misleading tests. "Dyson's video depicted a comparative product demonstration and was therefore advertising and subject to the legal requirement that it be truthful and accurate," it said.

The UK's equivalent of NAD, the Advertising Standards Authority (ASA), can only take action over a video on a free site such as YouTube if that video is promoted by the advertiser, for example, by circulating a link to the video in an email. If the video is not promoted, it escapes regulation, the ASA told OUT-LAW. The ASA has never taken action over a YouTube video, it said.

Other UK laws can apply to adverts posted to YouTube. For example, a business that falsely creates the impression that a video is the work of a consumer could fall foul of the Consumer Protection from Unfair Trading Regulations. That may result in a criminal prosecution. But such action is rare. In contrast, the ASA's rulebook, which generally goes further than the legislation, is applied in several adjudications each week.

The ASA can take action over some viral campaigns but not all of them. Its rulebook, the CAP Code, makes clear that it covers adverts in emails and "text transmissions." But the CAP Code also states that "the Code does not apply to... website content, except sales promotions and advertisements in paid-for space".

ASA spokesman Matt Wilson told OUT-LAW: "If [an advert] was appearing on YouTube and was not pushed elsewhere, it might not be covered. If it's on YouTube it's not in paid-for space."

"Adverts on YouTube or on a company's own websites are not in our remit," he said. "For example, Tesco could say something on their website [that breaches the CAP Code] and we can't do anything about that, but the same statement on a billboard is within our remit."

Wilson said the position only changes if a company 'pushes' the video, such as by email, or encourages users to 'pull' the video from their own website, for example by making it easy for users to download the clip and circulate it among friends.

UK industry body the Advertising Association set up a committee to review the remit of the ASA earlier this year. Its Digital Media Group was convened to put forward proposals for future-proofing the industry's self-regulation of advertising on digital media and its report is expected in 2009. A spokesman for the DMG said that the group expects to make recommendations "within the course of 2009".

The popcorn advert was removed from YouTube by Cardo but the ad has reappeared on YouTube's UK site. While YouTube does not allow users to copy videos from its site, it is not difficult for a tech-savvy individual to do so. Since Cardo does not appear to have posted that video, it does not control it. However, Cardo could assert copyright in the video and ask YouTube to remove it.

OUT-LAW asked NAD if it would ask an advertiser to assert copyright to have a video removed when 'banned' clips are copied by individuals and uploaded to YouTube; and also whether NAD's jurisdiction would cover YouTube's UK site, which is visible to US users.

"We would want to see a good faith effort on the companies' part in trying to remove the video wherever it appeared, but would be more concerned about the US site, seeing that our jurisdiction is the US market," said spokesman Bruce Hopewell in an email.

Jurisdiction appears to be another potential loophole. In the UK, the ASA's rulebook states: "The Code does not apply to... marketing communications in foreign media."

"Direct marketing that originates outside the UK but is targeted at UK consumers will be subject to the jurisdiction of the relevant authority in the country where it originates so long as that authority operates a suitable cross-border complaint system," says the CAP Code. "If it does not, the ASA will take what action it can."

See:

The popcorn video on YouTube's UK site

NAD statement on YouTube videos (1-page/62kb pdf)

ASA guidance on viral ads (2-page/33kb pdf)

Copyright © 2008, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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