Ad watchdog takes a legal bath after judge in soap case says it cannot punish non-members

The Advertising Regulatory Board (ARB) is in a froth after the high court ruled that it cannot sanction non-members.

The decision has its roots in a spat between competitors Bliss Brands and Colgate Palmolive over soap bar packaging in December 2019.

Colgate complained to the watchdog that Bliss’s packaging of its Securex soap “contains similarities in its architecture and parts of its get-up to the packaging of Colgate’s competing Protex soap bar”.

Colgate claimed this was “likely to cause confusion among consumers of these products soap products”.

It was not the first time that Colgate had hauled its competitor before the ARB. “A similar complaint was made in relation to the fabric softener brands where Colgate obtained some success in the ARB,” said the Johannesburg high court judgment.

Bliss fought back, and the ARB initially ruled its packaging was not “confusingly similar”. But Colgate appealed successfully, and this meant Bliss had to change its packaging within three months “and immediately cease any advertising” showing the packaging.

Bliss went to court to have the ARB decision reviewed and set aside, and challenged the constitutionality of the watchdog’s jurisdiction over non-members.

ARB’s memorandum of incorporation and code “allows for rulings and orders to be made by the ARB against non-members and dictate that if a non-member refuses to comply with an ARB ruling, the members of the ARB (including their members) are bound to decline to accept  the impugned advertising from that non-member upon the issue of a notice to members — known as an ad-alert  — from the ARB to that effect”.

The judgment said: “This has the effect that the advertiser cannot gain access to advertising services unless it complies with the ruling, in this instance being the withdrawal of the packaging of the [Bliss] packaging for its hygiene soap brand Securex.” 

Judge Denise Fisher declared the clause in the ARB’s memorandum of incorporation granting it jurisdiction over non-members “unconstitutional, void and unenforceable”.

She said: “It is declared that the ARB has no jurisdiction over a non-member of the ARB, meaning a person or entity who is not a member of the ARB or is not a person or entity who is bound by the code as a result of its/her/his membership of a member of the ARB.

“The ARB may not issue rulings against or in relation to a non-member or that non-member's advertising.”

Fisher also set the appeal ruling aside and the ARB was slapped with legal costs.

Liezel Bygate, the marketing director of Bliss, said: “Litigation came at substantial cost to the company, but we were left with no choice when it appeared that this was being used as a tool to obstruct our business.”

ARB CEO Gail Schimmel said an application for leave to appeal against the high court judgment had been lodged.

“We believe the judgment is deeply flawed in many respects, but significantly in that it leaves the consumer without recourse against misleading and offensive advertising,” said Schimmel.

“The vast majority of marketers are not ARB members, so if we cannot make decisions for the guidance of our members, consumers will be left unprotected. As consumer protection is at the very core of our mandate, an appeal is inevitable.

“The lodging on an application for leave to appeal suspends the judgment, so consumers can take comfort in the fact that, for now, it is business as usual at the ARB.”

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