Abstract

Keywords

Advertising Regulatory Board; advertising; self-regulation; jurisdiction.

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Self-regulation by the South African advertising industry is nothing new. It has been around for more than fifty years. The self-regulatory body in the advertising industry is currently known as the Advertising Regulatory Board (ARB), which is the successor to the Advertising Standards Authority of South Africa (ASA).1 Following a period of financial distress, the ASA was placed into liquidation and ceased operations in September 2018.2 Despite this set-back the advertising industry was determined to continue the practice of self-regulation. A month later the ARB was registered3 and began operations to further advertising self-regulation in continuation of the ASA.4

Following in the footsteps of the ASA, the ARB is an independent and voluntary association established and funded5 by the marketing communication industry,6 which aims to ensure that its system of self-regulation in the advertising industry serves the public interest.7 It is also a member of the International Council for Advertising Self-Regulation (ICAS).8

The guiding document of the ARB is the Code of Advertising Practice (the Code), which regulates all commercial advertising in South Africa.9 It is subject to the Constitution of the Republic of South Africa, 1996 (the Constitution) and gives effect to the constitutional values and principles.10 The Code is administered and enforced by the ARB.

The members of the ARB include various leading businesses in the advertising industry, such as local newspapers and magazines, radio, television and print industry federations.11 Approximately 335 entities are either direct or indirect members of the ARB.12 Familiar businesses include Absa, Allan Gray, Clientéle, Coca-Cola, Colgate-Palmolive, Discovery, FNB, Hollard, Liberty, Nedbank, Outsurance, Sanlam, Tiger Brands, Unilever, Vodacom, Wimpy and Pick 'n Pay.13

In addition, section 55(1) of the Electronic Communications Act 36 of 2005 (the ECA) requires that all broadcasting service licensees adhere to the

Code as determined and administered by the ARB.14 Familiar broadcasting service licensees include television broadcasters such as the South African Broadcasting Corporation, MNet, eTV and MultiChoice. Radio stations such as Jacaranda FM, 5 FM, Metro FM, RSG, 94.7 FM, and 702 are also included.15

All ARB members have undertaken to comply with the Code. As part of that undertaking, members have agreed never to prepare advertising which conflicts with the Code; never to accept advertising of others that conflicts with the Code; and to withdraw any advertising which has been held to be unacceptable by the ARB.16 As illustrated by the cases that are discussed in parts 4 and 5 below, advertising content in South Africa is, however, not limited to ARB member advertising only.17

The principle of privity of contract is an important consideration when dealing with the jurisdictional parameters of a voluntary organisation such as the ARB. This principle essentially entails that a person or entity which is not a party to a contract cannot be bound by the contract or sue or be sued on the basis of such a contract to which it is an independent third party.18 This principle has never been disputed by the ARB or its predecessors, which has conceded that only members of the ARB who have, through consensus, voluntarily agreed to be bound by the Code, are bound by it, and that the ARB and its members cannot by agreement between themselves extend the application of the Code to non-members.19

Following the above, an area of contention in recent years has been the jurisdiction of the ARB (and its predecessor, the ASA) to consider and rule on complaints that have been filed against an advertiser who is not a

member of the ARB. This contribution seeks to answer the following question: To what extent does the ARB, as a public watchdog in the advertising industry, have the jurisdiction to consider advertising complaints filed against a person or entity which is not a member of the ARB?

To answer the question, this contribution discusses whether or not a lower court would be bound by an order of the Supreme Court of Appeal (the SCA) which was based on a settlement agreement between the parties. As a second objective, consideration is given to whether or not clause 3.3 of the ARB's Memorandum of Incorporation (MOI) infringes on the right to freedom of association (which includes the right to dissociate) of non-members. Additionally, the aspect of whether or not the ARB, as an administrative adjudicating tribunal, infringes on the right to access to courts in terms of section 34 of the Constitution is also touched upon.

The question and objectives are considered in the light of relevant case law, notably Herbex (Pty) Ltd v Advertising Standards Authority 2016 5 SA 557 (GJ) and the subsequent SCA ruling in Advertising Standards Authority v Herbex (Pty) Ltd 2017 6 SA 354 (SCA) (referred to collectively as the Herbex-matter).20 More recently, the issue of jurisdiction was considered again in Bliss Brands (Pty) Limited v Advertising Regulatory Board NPC 2021 JDR 1019 (GJ) and, on appeal before the SCA, in Advertising Regulatory Board NPC v Bliss Brands (Pty) Ltd 2022 JDR 0769 (SCA) (referred to collectively as the Bliss-matter). The original contribution of this article is to set out the advantages of the SCA's ruling from the perspective of consumers that are exposed to advertising content in South Africa.

Part two below sets out a discussion on the Code, which is followed by a discussion on the complaints process before the ARB in part three. Both the court a quo and SCA rulings in the Herbex-matter are discussed in part four, which is followed by a discussion of the court a quo and SCA rulings in the Bliss-matter in part five. Part six sets out the discussion and concluding remarks.

It should be noted that this contribution focusses on the jurisdiction of the ARB in the light of relevant local case law and relevant legislative provisions under the ECA and the Promotion of Access to Justice Act 3 of 2000 (PAJA). The Consumer Protection Act 68 of 2008 and the Independent Communications Authority of South Africa Act 13 of 2000 fall outside the scope of this contribution.

2 The Code of Advertising Practice

As mentioned above, the Code is the guiding document of the ARB. The main purpose of the Code is to protect members of the public, and to set out the principles of fair play amongst advertisers in South Africa.21 Clause 11 of the Preface to the Code provides:

Advertising is a service to the public and, as such, should be informative, factual, honest, decent and its content should not violate any of the laws of the country. All entities bound by the Code must neither prepare nor accept any advertising which conflicts with the Code and must withdraw any advertising which has subsequently been deemed to be unacceptable by the ARB, Advertising Appeals Committee or Final Appeal Committee.

The Code is based upon the internationally accepted ICC Advertising and Marketing Communications Code (the ICC Code) as prepared by the International Chamber of Commerce (ICC).22 It applies to all commercial advertisements for the supply of any goods or services, the provision of facilities, and other advertisements which may be placed in the course of trade by or on behalf of any trader in South Africa.23 The Code is subject to the Constitution and gives effect to the constitutional values and

principles.24 It consists of various parts, including Section I, which deals with aspects such as the aims, scope, interpretation and definitions; Section II, which sets out nineteen general principles of acceptable advertising;25 and the Procedural Guide, which sets out the procedural aspects and remedies relating to the lodging and adjudication of a complaint with the ARB. These substantial parts of the Code were also incorporated in the Code of Advertising Practice of the ASA (ASA Code).

3 The ARB complaints process

The Code allows for the filing of consumer complaints26 and competitor complaints.27 Therefore, any member of the public or a business which is disgruntled by current or recent local advertising content28 and who believes that it is unacceptable has the option of lodging a complaint with the ARB. This process is discussed below.

Consumer complaints are filed with the ARB by using the online complaint form available on the website of the ARB.29 Competitor complaints must be submitted to the ARB via electronic mail.30 Once the complaint is received, the ARB will notify the relevant advertiser by sending the complaint to that

advertiser and affording it an opportunity to respond to the complaint.31 These written representations by both the complainant and the respondent are then considered.32

The Procedural Guide sets out a three-tier process for the adjudication of complaints before the ARB.33 The ARB's Directorate has the primary responsibility of ensuring compliance with the Code and will generally in the first instance consider all possible breaches of the Code when complaints are filed.34 When a complaint is received the Directorate may attempt to resolve the matter between the parties without issuing a formal decision.35 If this is not possible, the Directorate will consider the complaint and issue a ruling.36

A party who feels aggrieved by a ruling of the Directorate may appeal to the Advertising Appeals Committee (AAC), which is chaired by an independent practising advocate.37 As a final recourse, the Final Appeals Committee (FAC) will consider any appeal lodged against a ruling of the AAC.38 The FAC, which must be chaired by an independent practising or retired judge,39 is an instance of final resort and there is no further appeal beyond it.40

Where an appeal has been filed, a ruling of the ARB must generally be adhered to pending the outcome of that appeal. It is possible, however, to request a suspension of a ruling which may be granted in the discretion of the ARB or a court, as the case may be.41 A practical justification for this

approach would be that, if a ruling were to be automatically suspended pending an appeal, advertisers would simply appeal all adverse ARB rulings issued against them, thereby effectively buying time to phase out advertising pending an appeal. Considering the nature of advertising and that a large portion of advertisements has a limited lifespan, this approach would arguably not be in the public interest.

Decisions of the ARB are deemed to be administrative actions in terms of PAJA.42 Decisions that have been issued by the ARB are therefore reviewable before the courts in terms of section 6 of the PAJA.43

Turning to sanctions, where a complaint is upheld the respondent advertiser will usually be ordered to withdraw the advertisement in its current format and from any medium in which it appears.44 Where a respondent advertiser fails to comply with a reasonable request for cooperation during the course of an ARB complaint or following the issuing of a ruling, the ARB may issue a so-called Ad Alert to all of its members.45 Through the Ad Alert mechanism, ARB members are notified of any advertiser which has been found to be in contravention of the Code and which has failed or refused to bring its offending advertising in line with the objectives of the Code. The ARB members will then subsequently decline to publish or broadcast any advertising of the offending advertiser in any medium in South Africa.46

The jurisdiction of the ARB in respect of non-member advertisers that have elected not to agree to abide by the Code was challenged by non-member advertisers both in the Herbex-matter against the ASA and, more recently, against the ARB in the Bliss-matter. These matters are discussed in parts four and five, respectively, to follow.

4 The Herbex-matter

At the outset it should be noted that the order of the SCA was based on a draft settlement agreement between the parties. As such, in the matter before the SCA it was not necessary for the court to consider and comment on a number of the points of contention argued by Herbex and held by the court a quo regarding the jurisdiction of the ASA. These issues surfaced again in the Bliss-matter, however, which is discussed in part five that follows.

4.1 Facts

The applicant, Herbex, manufactured, sold and advertised complementary medicines in South Africa.47 Although it was not a member of the ASA, Herbex had for many years submitted to the jurisdiction of the ASA and defended a number of complaints filed against its adverting.48 Following legal advice on the jurisdiction of the ASA in respect of non-members, Herbex instituted legal proceedings against the ASA before the High Court, seeking an interdict and a number of declaratory orders against the ASA.49 The crux of the dispute was whether or not the ASA had any lawful basis to exercise jurisdiction over non-members who had not consented thereto. 50

Herbex contended that the ASA, as a private company, had no jurisdiction over non-members or their advertising. It argued that the ASA's standard cover letter which accompanied a complaint submitted to the advertiser was misleading and failed to disclose this aspect. In its answering papers, the ASA acknowledging that non-member advertisers were legally entitled to elect not to comply with the ASA Code. However, the ASA further argued that members were legally entitled to elect not to accept the advertising of a non-member, and that such conduct did not impose the contractual arrangement between the ASA and its members on a non-member.51 On this basis the ASA set out three instances where, in its view, it possessed the jurisdiction to consider complaints against non-member advertisers, namely:

4.2 Judgment of the court a quo

Having considered the ASA complaint procedure and sanctions, the High Court noted that, in adjudicating complaints against non-members who did not wish to subject themselves to the jurisdiction of the ASA, the ASA was effectively imposing the terms of its association with its members upon such non-members against their will.55 This had the practical effect of the ASA's actions resulting in both members and non-members being treated the same, rendering Herbex a de facto member of the ASA although it did not wish to belong to this association.56 This, held the court, constitutes a violation of the right to freedom of association as set out in section 18 of the Constitution and, more specifically, the right to dissociate from the ASA.57

Following the above, the High Court held that the ASA and its members could not, by agreement between themselves, impose the ASA Code which they had agreed to comply with, on non-members who had not contractually undertaken to abide by the ASA Code, or confer jurisdiction upon the ASA over the advertising of non-members.58 The court further held that, in the absence of express consent to its jurisdiction, there was no legal basis on which the ASA could claim to possess jurisdiction over the advertising of a non-member irrespective of where such advertising was published or

broadcast.59 The most relevant portion of the court order, paragraph 90.1, is set out below:

In the premises I make the following order:

It is declared that the respondent has no jurisdiction over any person or entity who is not a member of the respondent and that the respondent may, in the absence of a submission to its jurisdiction, not require the applicant to participate in its processes, issue any instruction, order or ruling against the applicant or sanction it.60

The ASA subsequently obtained leave to appeal to the SCA.

4.3 Judgement of the SCA

On appeal the ASA argued that paragraph 90.1 of the court a quo's order was "extraordinarily wide and curtailed the ASA's ability to perform its function of self-regulation of the advertising industry in the public interest", in that it completely precluded the ASA from considering an advertising complaint against a non-member.61

Having noted that the issues between the parties were confined and that there was a real prospect of potential settlement, the SCA afforded the parties an opportunity to consider settlement.62 The parties were able to reach an agreement on the merits and prepared a draft order. On this basis the SCA was ultimately tasked to consider only if the draft order was acceptable and to determine the issue of costs.63 In endorsing the draft settlement agreement, upholding the appeal and replacing a substantial part of the order of the court a quo,64 the SCA declared that:

1.1 the Advertising Standards Authority of South Africa (the ASA) has no jurisdiction over any person or entity who is not a member of the ASA and that the ASA may not, in the absence of a submission to its jurisdiction, require non-members to participate in its processes, issue any instruction, order or ruling against the non-member or sanction it;

1.2 the ASA may consider and issue a ruling to its members (which is not binding on non-members) on any advertisement, regardless of by whom it is published, to determine, on behalf of its members, whether its members should accept any advertisement before it is published or should withdraw any advertisement if it has been published.

2. The ASA is directed to include in its standard letter of complaint the contents of para 1 and that a non-member is not obliged to participate in any ASA process, but that should it not participate, the ASA may still consider the complaint, for the purposes set out in para 1.2.65

Mathopo JA (with all four other justices concurring) confirmed that the ASA was a body set up to ensure the proper functioning of the system of self-regulation in the advertising industry, and the main purpose of the ASA Code was to protect members of the public and to ensure fair play among advertisers in South Africa. On this basis, and having made the above order, Mathopo JA noted:

[I]n my view, the ASA had to approach this court to reverse the wide-ranging effect of para 90.1 of the court a quo's order, particularly as regards its prohibition from determining whether any advertisement breaches the Code, so as to enable it to determine, on behalf of its members, whether they should accept an advertisement for publication or withdraw the advertisement if it has been published.66

The above extract clearly demonstrates that the SCA considered the arguments regarding the jurisdiction of the ASA and disagreed with the court a quo that the ASA possessed no jurisdiction to consider or rule on complaints regarding non-member advertising. In making the settlement agreement an order of court, which included clause 1.2, the SCA effectively confirmed that members of the ASA were legally entitled to elect not to accept the advertising of a non-member in terms of the Ad Alert mechanism in the ASA Code (as retained in the Code of the ARB).

5 The Bliss-matter

With the incorporation of the ARB following the Herbex-matter, the ARB ensured that both its MOI and the Code mirrored the SCA's order regarding non-member advertising complaints.67 Clause 3.3 of the ARB's MOI, which became one of the key aspects in the Bliss-matter, provides:

The Company has no jurisdiction over any person or entity who is not a member and may not, in the absence of a submission to its jurisdiction, require non-members to participate in its processes, issue any instruction, order or ruling against the non-member or sanction it. However, the Company may consider and issue a ruling to its members (which is not binding on non-members) regarding any advertisement regardless of by whom it is published to determine, on behalf of its members, whether its members should accept any advertisement before it is published or should withdraw an advertisement if it has been published.

5.1 Facts

The Bliss-matter was set in motion following a competitor complaint filed by Colgate Palmolive (Pty) Ltd and Colgate Palmolive Company (collectively referred to as "Colgate") against Bliss Brands (Pty) Ltd ("Bliss") with the ARB.68 Colgate and Bliss are competitors in the consumer products industry and both manufacture hygiene soap.69 Colgate manufactures Protex hygiene soap, which was the market leader in this product category.70 Bliss manufactures and sells Securex hygiene soap. Colgate is a member of the ARB, whilst Bliss is not.71

In 2019 Colgate filed a complaint against Bliss with the ARB. In essence, it argued that the packaging architecture72 of the Securex soap contravened clauses 8 and 9 of Section II of the Code, and that it constituted an exploitation of the advertising goodwill in the Protex soap packaging, and imitated that packaging to the extent that the packaging of Securex would be likely to cause confusion amongst consumers of the respective products.73 The ARB notified Bliss of the complaint. In accordance with clause two of the SCA's order in the Herbex-matter, the cover letter accompanying the complaint requested Bliss to inform the ARB if it did not consider itself to be bound by the ARB, and stipulated that Bliss was not obliged to respond to the complaint or furnish a defence.74

Bliss responded to the complaint and participated fully in the ARB process.75 It denied that its Securex packaging contravened the Code and successfully defended the complaint before the Directorate, which dismissed the complaint.76 Colgate filed an appeal before the AAC, which overturned the ruling of the Directorate and upheld the complaint. The AAC directed that Bliss withdraw the packaging of the Securex product within three months of its ruling, and that it immediately cease all advertising in any other medium which depicts the Securex product in that packaging.77 Bliss subsequently appealed to the FAC, which, chaired by Judge BM Ngoepe,78 upheld the

ruling of the AAC, ordering Bliss to withdraw the packaging of its Securex product range.79

At this stage, it is noteworthy to highlight that, despite being a non-member of the ARB, Bliss participated fully in the ARB process by defending the advertising complaint, defending Colgate's appeal before the AAC and filing an appeal before the FAC. At no stage throughout the three-tier process did it contest or object to the jurisdiction of the ARB to consider and rule on the complaint that Colgate had filed against it.80

Subsequent to the FAC ruling, Bliss approached the High Court on an urgent basis, seeking an order suspending the operation of the FAC's ruling, pending a review application.81 The urgent application was dismissed.82 The review application was re-enrolled and heard before Fisher J. In neither of these review applications filed by Bliss was the jurisdiction of the ARB raised as an issue. In fact, up to that point there was no suggestion that Bliss' participation in the ARB's process was anything but voluntary.83

At the time of hearing the review application, Fisher J mero motu questioned the constitutionality of the ARB's process and powers, an aspect which had never been raised in the pleadings.84 A directive was subsequently issued by the court, affording the parties an opportunity to amend their pleadings to address this issue, which had been introduced by the judge.85 Bliss filed an amended notice of motion. Its amended founding papers "bore little resemblance" to the review application that it had originally filed.86 The court's directive resulted in virtually an entirely new case for determination,87 and the relief sought by Bliss was completely different to what had initially been set out in the prayers. It now sought an order declaring:

The court a quo identified the legal crux of the matter in the amended pleadings before it to be the constitutionality of the ARB process with specific reference to the effects of an Ad Alert mechanism on non-members of the ARB.89

On the aspect of the jurisdiction of the ARB over non-member advertising, the ARB raised two arguments. In line with the principle of stare decises, it was argued that the SCA had already ruled on the issue in the Herbex-matter, and that the High Court was bound by that ruling.90 On this basis it was argued that the striking down of clause 3.3 of the ARB's MOI, which mirrors the SCA's ruling, would be in direct conflict with the order of the SCA in the Herbex-matter.91 Furthermore, it was argued that the removal of the ARB's power to consider and rule on non-member advertising from its MOI would result in the de-regulation of the advertising industry and be contrary to the public interest.92

5.2 Ruling of the court a quo

The court a quo interpreted the Ad Alert mechanism as a blanket refusal by ARB members to publish or broadcast any advertisement which the ARB has held to violate the Code. Based on this understanding, the court noted that the Ad Alert mechanism has a coercive effect on non-members,93 and that it "has all the features of an indirect boycott".94

In considering the SCA's order in the Herbex-matter, the High Court indicated that it understood paragraph 1.1 of the order to be in rem (i.e., of general application). As to paragraphs 1.2 and 2, however, the court reasoned that the SCA intended for those orders to be confined to the parties to the settlement agreement only and that they were, therefore, in

personam and not of general application.95 In following this reasoning, Fisher J pointed out that, on her reading of the SCA's order in the Herbex-matter, the lawfulness of the Ad Alert was not considered by the SCA.96 In addition, the court noted that in its view para 90.1 of the court a quo's ruling stands, and used that order as a basis to conclude that there can be no Ad Alert issued against a non-member.97 On this basis, the court held the provisions of the Code and MOI that underlie the Ad Alert mechanism to be unconstitutional.

Furthermore, it was held that Bliss' partaking in the ARB process "cannot be said to constitute actual consent to the jurisdiction of the ARB."98 In considering the merits of Colgate's complaint, the court held that the ARB's determination of complaints in terms of clauses 8 and 9 of Section II of the Code falls foul of the right to access to courts in terms of section 34 of the Constitution.99 The order issued included the following:

1. Clause 3.3 of the MOI, which has the effect of granting the ARB jurisdiction over non members, is declared unconstitutional, void and unenforceable.

2. The clause "in the absence of a submission to its jurisdiction" in the first sentence as well as the second sentence in its entirety are severed from clause 3.3 of the MOI.

3. 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.

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

5. The FAC rulings in this matter are unlawful and are set aside.100

With leave to appeal having been granted by the High Court, the ARB approached the SCA.101

5.3 Ruling of the SCA

The legal question before the SCA was whether or not the court a quo was correct in making the series of orders, including the order declaring clause 3.3 of the ARB's MOI unconstitutional, void and unenforceable, given that

those orders "effectively dismantled the system of self-regulation of advertising in South Africa in its entirety."102

Before considering the merits of the order of the court a quo, the SCA highlighted the firmly entrenched principle in our law that a court is tasked to decide only the issues before it that have been pleaded by the parties. In issuing the directive to the parties which resulted in essentially an entirely new case before it, the court a quo failed to take heed of this principle.103 While exceptional circumstances may warrant a court raising constitutional issues mero motu, the SCA noted that this was not such a case.104

Turning to the aspect of Bliss' consent to the jurisdiction of the ARB, the SCA held that the findings of the court a quo on this aspect were incorrect and unsustainable based on the facts of the case.105 By participating fully in the ARB process and raising no objection to jurisdiction (despite the contents of the standard cover letter which accompanied the complaint), Bliss had submitted to the jurisdiction of the ARB.106 This finding was based on the evidence before the court, and past precedent confirming that a party's failure to raise an objection to jurisdiction followed by participation in proceedings clearly demonstrates submission to jurisdiction.107

The SCA then went on to consider the validity of the various criticisms against the ARB by the court a quo, including:

Each of these aspects is discussed under a separate heading below.

5.3.1 Following the doctrine of precedent where an order of the higher court is based on a settlement agreement between the parties

As a first consideration, the SCA noted that the reasoning of the court a quo on paragraphs 1.2 and 2 of the Herbex-order being in personam and not of general application was incorrect.108 Turning to the precedential value of the Herbex-order, the SCA noted that, when exercising that discretion and considering a draft settlement agreement prepared by parties to a dispute, a court cannot simply accept the draft settlement agreement at face value. Rather, the court is required to assess the potential wider impact of such an order.109 On this basis, the court is vested with the discretion to accept a draft settlement agreement and make it an order of court, to insist on amendments to the draft settlement agreement, or to reject it outright.110 As such, a settlement agreement which has been made an order of court "stands to be interpreted like any other order."111

Following the above, the SCA noted that, while the Herbex-order was granted by consent between the parties, it was no less binding or effective than any other SCA order.112 The SCA commented:

Applied to the present case, this Court in Herbex was satisfied that on the merits, setting aside the prohibition on the ASA from deciding whether an advertisement breached the Code, so as to enable it to determine, on behalf of its members, whether they should accept an advertisement for publication or withdraw the advertisement if it has been published, was justified. Consequently, the declaratory relief which this Court granted in Herbex – the whole order – was plainly one in rem: it pronounced upon the limits and powers of the ASA in relation to every non-member advertiser, not only Herbex.113

Against this background, the SCA held that the court a quo's order declaring clause 3.3 of the ARB's MOI unconstitutional was contrary to the precedent established by it in the Herbex-matter. The SCA further highlighted the fact that the doctrine of precedent is "an intrinsic feature of the rule of law" which, if not adopted, would lead to a lack of legal certainty, predictability and cohesion in our law, and would "invite legal chaos". On this basis, the SCA confirmed that its order in the Herbex-matter should have disposed of Bliss' constitutional challenge to the ARB's process and jurisdiction over non-members.114

5.3.2 The ARB's powers are sourced in law

As a starting point, the SCA noted that the ARB's MOI and Code, which incorporates the Procedural Guide, constitute empowering provisions under PAJA. The fact that there is no statutory source for those powers does not preclude the ARB from lawfully exercising a public function.115 On this basis the SCA confirmed that the ARB is empowered to consider advertising complaints in the following four circumstances:

The SCA further confirmed that, in the instance of (a), (b) and (c) above, the ARB is entitled to consider, on behalf of its members, advertising complaints against non-members to allow its members the opportunity to elect whether or not they wished to publish the relevant advertisement(s) of that non-member. It noted that the order of the court a quo:

prevents the members of the ARB from using their chosen method of deciding which advertisement they wish to publish and which advertisers they wish to associate with. This constitutes an unjustifiable limitation on the rights of members to freedom of expression and association.118

As a final remark on this issue, the SCA outright dismissed the court a quo's views regarding the alleged "effect of a boycott" of an Ad Alert, noting that this issue did not form part of the pleadings.119

5.3.3 The acceptability of the Ad Alert mechanism in the context of the right to self-regulation and the right to dissociate

The SCA noted that the court a quo's inference that the Ad Alert mechanism of the ARB serves to completely cut off a non-member from commercial activity in South Africa was not pleaded in the founding papers and was not substantiated by the evidence before the court.120 In addition, the effect of an Ad Alert issued by the ARB to its members is that they will decline to publish a particular advertisement. The non-member advertiser is nevertheless at liberty to publish its advertisement in any media which are not connected to the ARB, such as social media accounts, its own website, or a media house that is not a member of the ARB.121 The SCA confirmed its dictum in the Herbex-matter that rulings against non-member advertising are not binding on, or legally enforceable against, non-members. On this basis, it held:

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. Members of the ARB are bound to comply with the Code and ARB decisions, and are obliged to decline to approve, create or carry advertisements that breach the Code. Non-members who do not wish to meet the ethical standards contained in the Code are free to approve, create and publish their advertising using the services of non-members of the ARB.122

As such, the SCA noted that the power of the ARB to consider complaints against non-members, on behalf of its members, advances the right to freedom of association of those members.123 In addition, the SCA confirmed that ARB members' right to refuse to publish advertising of non-members accords with their right to freedom of expression in section 16 of the Constitution.124 In analysing this issue, the SCA noted that the ARB's members share the common goal of promoting ethical standards in advertising, as reflected in the Code. Collectively, those members have agreed to delegate the complaints process and decision-making to the "expert adjudicative bodies" of the ARB, on their behalf. This mechanism gives effect to two components of section 18 of the Constitution, namely the right to self-regulation (by members of the ARB), and the right to dissociate (both by members and non-members of the ARB).125

In contextualising the right to dissociate, the SCA noted that every person or entity in the advertising industry is afforded the right of association and the right of dissociation in the context of advertisers or advertising content.

This includes the right of ARB members to choose to dissociate from non-member advertising. By the same token, it includes the right of non-members to dissociate from the ARB, which they are at liberty to do.126 Having decided to dissociate from the ARB, however, non-members cannot demand that the ARB members disregard their contractual commitment not to publish or broadcast advertising in breach of the Code. Moreover, non-members cannot lawfully demand that the ARB declines to consider an advertising complaint against a non-member on behalf of its members. On this basis, the right to dissociate does not afford a non-member like Bliss "the unfettered right to dictate to the ARB and its members" how they should exercise their right of association, which includes the right to dissociate from non-members.127

5.3.4 The ARB functions as an adjudicative administrative tribunal and does not limit the right to access to courts

In considering section 34 of the Constitution the SCA noted that the ARB qualifies as a "tribunal or forum" in terms of that constitutional provision. It went on to confirm that that the ARB, as an adjudicative administrative tribunal, does not limit the right to access to courts, given that its process is subject to judicial control in two ways. Firstly, following exhaustion of the internal appeal opportunities, an FAC ruling is subject to judicial review in terms of PAJA. In addition, a court may issue an interdict suspending the operation of an ARB decision pending a challenge to a ruling, a procedure which was followed by Bliss.128

In noting that elements of a complaint based on clauses 8 and 9 of the Code may overlap with claims based on passing off and/or copyright infringement, the SCA noted:

The mere fact that elements of a complaint before the ARB might overlap with elements of a cause of action that could be pursued in a court or other tribunal, does not mean that the ARB ousts the court's jurisdiction. The ARB and the courts are different fora with distinct powers.129

The SCA upheld the appeal and set aside the order of the court a quo. In recent developments Bliss has filed an application for leave to appeal the SCA's ruling to the Constitutional Court.130

6 Discussion and concluding remarks

The SCA ruling in the Bliss-matter confirms its order in the Herbex-matter that the ARB, as the successor of the ASA, possesses the jurisdiction to consider an advertising complaint irrespective of whether or not the relevant advertiser is a member of the ARB. Although non-member advertisers may elect not to subject themselves to the jurisdiction of the ARB or comply with an ARB ruling made against their advertising, all ARB rulings are issued for the adherence of the ARB's members.

The SCA has also held that, in the instance of a non-member who exercises its constitutional right to dissociate from the ARB and its adjudication process, the ARB may nevertheless consider any advertising complaint, provided that there is a potential contravention of the Code. At the instance of ARB members, this mechanism supports their constitutional right to dissociate from advertising content which has been held by the ARB not to comply with the responsible and ethical marketing principles in the Code. On this basis non-member advertisers are required to respect clause 3.3 of the ARB's MOI.131

On a practical level, the outcome of the SCA's ruling means that any advertiser may broadcast or publish its advertising through any medium in South Africa provided that the relevant advertising complies with the Code.132 If, however, the advertising is held by the ARB to be non-complaint with the Code, an advertiser or publisher that is required to comply with the Code133 should not accept, alternatively cease broadcasting or publishing, that advertising.134 In the instance of non-compliant advertising of a non-member advertiser which is broadcast or published by an entity which is required to comply with the Code,135 that advertiser runs the risk of its advertising being withdrawn by such a broadcaster or publisher.136 In such

an instance, the options to the non-member advertiser would essentially be to:

When considering the future of marketing in South Africa, the above situation will place limitations on the right to freedom of association140 and potentially the right to freedom of expression141 of non-member advertisers whose advertising content is held not to comply with the Code. In effect, the media pool from which such non-member advertisers will be able to select to publish or broadcast their advertising content will be reduced to businesses or platforms that do not have objections to broadcasting or publishing advertising content that contravenes the Code.142

The abovementioned constitutional rights are, however, not absolute.143 In this regard it is submitted that the SCA's ruling and the potential limitation of these rights should be considered in the context of the important role that the ARB performs in the advertising industry as a service to the general public. The ARB's primary role can be summarised by its slogan, namely

"consumer protection through responsible advertising".144 When standing in the shoes of a consumer, an immediate advantage of the ARB's adjudication process is that it is free of charge.145 ARB rulings can also be issued within a few weeks of a complaint being filed.146 In addition, the filing of a complaint is accessible, as any consumer that has access to the ARB's official website can lodge an advertising complaint with the ARB. These are three of the main factors that allow consumers to often use this platform to voice concerns about local advertising.147 In 2021 the ARB received a total of 559 complaints.148 During the period January to June 2022 the ARB received 258 complaints.149 These figures illustrate that there is public support for this advertising adjudication forum.

Furthermore, in the interest of transparency ARB decisions are published on the ARB's official website.150 As such, these decisions are freely accessible to any consumer, business, ARB member and the media. It is noteworthy to mention that it is not uncommon for the media to report on rulings.151 Recent examples include media reports published in respect of ARB complaints against Pick 'n Pay,152 Takealot153 and Wimpy.154 A potential consequence of an adverse ruling is negative publicity, which may serve to encourage compliance with the Code and ARB rulings even in the case of a non-member advertiser.155

A significant portion of the local advertising and marketing industry has for many decades regarded the Code as the measuring stick of what is responsible and ethical in advertising. The Code is based on an internationally accepted model,156 and the importance and value of the Code has also been recognised by the South African government, given the reference to this Code in legislation, namely the ECA. Equally important, the value of the ARB and its predecessor, the ASA, as an advertising watchdog for the public has been recognised by South African courts over the years.157 On this basis it is submitted that it will serve the public interest if all advertising complies with the Code irrespective of whether or not the relevant advertiser has expressly undertaken to do so.

While the court a quo in the Bliss-matter attempted to derail or curtail this public function of the ARB, the SCA has come to the aid of the general public in justifying the jurisdiction and public function of the ARB as a body which sets out and rules on ethically acceptable and responsible advertising for the benefit of consumers. Given the advantages of the ARB mechanism as it currently stands, it is submitted that the broader public interest may very well prevail should leave to appeal to the Constitutional Court be granted.

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Case law and rulings

General

Advertising Regulatory Board NPC v Bliss Brands (Pty) Ltd 2022 JDR 0769 (SCA)

Advertising Standards Authority v Herbex (Pty) Ltd 2017 6 SA 354 (SCA)

AmaBhungane Centre for Investigative Journalism NPC v Minister of Justice and Correctional Services; Minister of Police v AmaBhungane Centre for Investigative Journalism NPC 2021 3 SA 246 (CC)

Bliss Brands (Pty) Limited v Advertising Regulatory Board NPC 2021 JDR 1019 (GJ)

Brandhouse Beverages (Pty) Ltd v Advertising Standards Authority of South Africa 2015 JDR 0832 (GP)

Fischer v Ramahlele 2014 4 SA 614 (SCA)

Herbex (Pty) Ltd v Advertising Standards Authority 2016 5 SA 557 (GJ)

Laugh It Off Promotions CC v SAB International (Finance) BV t/a SABmark International (Freedom of Expression Institute as Amicus Curiae) 2006 1 SA 144 (CC)

Medical Nutritional Institute (Pty) Limited v Advertising Standards Authority 2016 JDR 0900 (GJ)

Public Protector v South African Reserve Bank 2019 6 SA 253 (CC)

Reckitt Benckiser Pharmaceuticals Proprietary Limited v Advertising Regulatory Board NPC [2020] JOL 49265 (GJ)

Telematrix (Pty) Ltd t/a Matrix Vehicle Tracking v Advertising Standards Authority SA 2006 1 SA 461 (SCA)

Rulings of the Advertising Regulatory Board

Bliss Brands (Pty) Ltd / Colgate Palmolive (Pty) Ltd FAC Ruling of 3 August 2020

Colgate-Palmolive Company and Colgate-Palmolive (Pty) Ltd / Bliss Brands (Pty) Ltd ARB Directorate Ruling of 30 August 2019

Doris de Jager / Massbuild (Pty) Ltd t/a Builders Warehouse / 857 Directorate Ruling of 10 July 2020

Ebenhauzer Keun / Philip Morris South Africa (Pty) Ltd / 589 Directorate Ruling of 21 January 2020

Golden Fried Chicken (Pty) Ltd / Sandile Cele FAC Ruling of 10 July 2019

John Alexander / FAW Vehicle Manufacturers SA (Pty) Ltd Directorate Ruling of 5 August 2019

Steers Proprietary Limited / Burger King South Africa (Proprietary) Limited Directorate Ruling of 25 September 2019

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Consumer Protection Act 68 of 2008

Electronic Communications Act 36 of 2005

Independent Communications Authority of South Africa Act 13 of 2000

Promotion of Access to Justice Act 3 of 2000

Self-regulatory Industry Codes

Code of Advertising Practice of the Advertising Regulatory Board

Code of Advertising Practice of the Advertising Standards Authority of South Africa

ICC Advertising and Marketing Communications Code

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List Of Abbreviations