Banner triangles

Coronavirus: responsible advertising and fair pricing practices

There has been an increase in the number of businesses seeking to exploit coronavirus for commercial gain, often in breach of relevant advertising and consumer regulations. What can you do to make sure your advertising practices are above board?

Background

A surge in the demand for products related to coronavirus, such as facemasks and hand sanitiser gel, has led to a range of issues, particularly in relation to responsible advertising and fair pricing practices. Recently, the Advertising Standards Authority (ASA) has banned adverts by two companies for making false claims about the effectiveness of facemasks in preventing the spread of coronavirus. Claims by Easy Shopping 4 Home Ltd and Novads OU went against current official guidance (i.e. handwashing being the recommended action to help prevent the spread of the disease) with one of the two companies stating that facemasks were “one of the best ways to protect yourself” against coronavirus. Novads OU were further criticised for using fear in their “alarmist language” messaging, referencing “a growing sense of panic”. In its adjudications, the ASA stated that “there was very little evidence of widespread benefit from their use outside of clinical settings” as well as adding that “prolonged use of masks was likely to reduce compliance with good universal hygiene behaviours”. As a result, the claims were deemed to breach the ASA advertising code on the basis that they were “misleading, irresponsible and likely to cause fear without justifiable reason”.

Equally, the competition watchdog has also started to clamp down on businesses seeking to exploit the spread of coronavirus by using pricing practices that breach consumer protection laws. Following shortages of in-demand goods (such as facemasks and hand sanitiser gel) and a subsequent surge of the price of such products offered by certain vendors, the Competition and Markets Authority (CMA) has begun monitoring sales and pricing practices more closely in order to ensure compliance. The CMA has further indicated that it is willing to take legal action against anyone who breaks the law. Online marketplaces have also started taking responsibility to help limit these practices, with Amazon and eBay taking measures to remove products from its sites that include questionable claims, including products that are claimed to protect against coronavirus (or even cure it) as well as where products have been deliberately overpriced and sold by questionable sellers.

Practical steps and considerations:

It is vital that your advertising and pricing practices are above board, as breaches of consumer protection laws can have serious consequences. For example, breaches of the Consumer Protection from Unfair Trading Regulations 2008 can result in unlimited fines and/or imprisonment.

When considering your advertising and pricing practices, particularly in relation to such sensitive areas like the coronavirus outbreak, care should be taken to ensure that the marketing complies with the CAP marketing codes for both broadcast (e.g. radio and TV) and non-broadcast (e.g. online and publications) advertising. In particular, marketers should ensure that:

  • All advertising is socially responsible and not likely to cause unnecessary panic or other objectionable effects (e.g. widespread offence etc);
  • All advertising is clear, truthful and based on appropriate substantiation (including documented evidence before a claim is made);
  • Any price changes, in response to decreases in supply and/or increases in demand, are fair and reasonable in the context. Inflating pricing to a disproportionate level in order to maximise profits from the sale of in-demand products risks being in breach;
  • The marketing does not amount to harassment, coercion or undue influence through the use of aggressive pricing or advertising mechanics.

See more articles from Shoosmiths on the impact and implications of the coronavirus in the work place and on businesses:

Disclaimer

This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

Insights

Read the latest articles and commentary from Shoosmiths or you can explore our full insights library.