Ofcom squares up for a battle over ad regulation

Ofcom could be in for its first fight, within days of opening for business. Its plans to hive off control of broadcast advertising to a subsidiary of the Advertising Standards Authority have aroused strong opposition among consumer groups, as they will make clear at a consultation meeting this week.

“Ofcom puts first foot wrong,” proclaims a statement from the National Consumer Council (NCC): “Ofcom’s plans to revamp the system for TV and radio advertising standards and complaints are a licence for advertisers to run their own show.” The Consumers’ Association is equally jaundiced about the scheme.

Two months ago in this space, I drew attention to the chorus of approval with which the ad business had greeted the proposal to set up a single system of advertising regulation (MW November 6, 2003). An e-mail from Ofcom, setting out the scheme and inviting comments, had prompted an immediate flurry of applause.

ASA chairman Lord Borrie QC hailed the new system as a “one-stop shop” for advertising complaints: “At present, consumers must negotiate a regulatory maze just to submit a complaint about misleading or offensive advertising. Complaints about TV ads go to one regulator, about radio ads to another and about cinema ads to a third. And as boundaries between technologies blur, confusion about ‘who does what’ will only increase.”

By lunchtime, further e-mails of support had arrived from the Commercial Radio Companies Association, ITV and the Incorporated Society of British Advertisers. I pointed out that these responses were scarcely surprising, since all these groups were on the Advertising Association taskforce that had formulated the scheme.

But from the NCC and the Consumers’ Association there was silence. Only Debra Shipley, the Midlands MP who is proving a particularly sharp thorn in the side of the advertising business, spoke out against the plan, saying it was a “move in the wrong direction”.

Both consumer organisations have held their fire till now. Ofcom’s consultation was originally meant to end on January 9. That’s now been extended to January 29, partly to allow for time lost over the Christmas break but also to accommodate this week’s “forum for key stakeholders” on the future regulation of broadcast advertising. It could be a fiery occasion, if the NCC’s statement is any guide.

Ofcom, it says, must not rush to activate the new system until it has teeth. The NCC wants Ofcom to inject greater independence and consumer involvement into the system to ensure more effective consumer protection and clearer accountability. Unless this happens, it says, Ofcom should abandon its plan to “contract out” many of the advertising regulatory responsibilities it inherited from the Independent Television Commission and the Radio Authority.

NCC senior policy officer Sue Dibb says: “This new watchdog is handing over its teeth. Commercial interests will be in control of the new codes of advertising practice. And Ofcom may be powerless to order a tightening of standards in response to emerging undesirable practices by advertisers.

“As they stand, the plans will give advertisers a licence to run their own show. This cannot be right – especially now the existence of the obesity ‘time-bomb’ and the role of advertising in influencing what children eat is incontrovertible. Commercial interests must not be allowed to call the tune.”

Alan Williams, senior policy officer at the Consumers’ Association, has similar worries: “The first concern is over the process – why is Ofcom’s management so keen to get this through so quickly, before its consumer panel is even up and running? This isn’t a regulatory priority, so why are they making it one, when Ofcom has so many other things on its plate?

“The second concern is the proposal itself. Handing the advertising industry control over the codes of practice, at a time when there is so much concern over advertising to children, is serving the interests of the industry, not the consumer. Who controls the codes is a much more serious issue than who checks whether advertisers are complying with them.”

Williams believes this issue could prove highly important for Ofcom’s reputation. “The real danger is that, by looking for an ‘early win’, Ofcom could damage its credibility as a regulator that will look after the needs of consumers and citizens” he says.

He thinks no decision should be taken until Ofcom’s consumer panel has been set up. It has a chairman – 0, former head of the Personal Investment Authority – but its eight to ten other members have yet to be appointed. The panel is scheduled to hold its first meeting before the end of this month.

In any case, the consumer panel is a strange beast. Its role and likely impact are not yet clear. Ofcom’s website says it is establishing the panel as a requirement of the Communications Act 2003, “to advise on the consumer interest in the markets it regulates. The Panel will be independent of Ofcom and will operate at full arm’s length from it, setting its own agenda and making its views known publicly.”

Bowe describes the panel as a “critical friend” and Ofcom is making it clear it does not have to heed its advice.

Could the control of broadcast advertising be the issue on which the new watchdog – and its consumer panel – cut their teeth?

Torin Douglas is media correspondent for BBC News