Media & Marketing:It is lucky for Michael O'Leary that it is not yet a criminal offence in the UK to create false and misleading advertising, writes Siobhán O'Connell.

An advert for budget airline Ryanair was banned by the UK's advertising watchdog last week after it made misleading and unfair comparisons with online travel agent Lastminute.com because the watchdog ruled that it broke the rules on truthfulness and comparative advertising.

The ad appeared in the national press, headlined "Robbed by Lastminute.com?" It showed a picture of a burglar with "online agent" written on his top. Lastminute.com complained to the Advertising Standards Authority (ASA) that the ad was misleading and, together with the cartoon robber, "denigrated and discredited" its business.

Ryanair's response to the watchdog's ruling was to call the ASA "bogus" and label the regulator "Absolutely Stupid Asses". That incensed the ASA, which issued the airline with a warning it will take it to the Office of Fair Trading for breaching advertising standards for the fourth time in five months and the fifth time in a year.

But if Ryanair had run that ad in the Republic, it could be facing a criminal prosecution. That's because under the Consumer Protection Act (CPA), which came into effect earlier this year, it is now a criminal offence to create false and misleading advertising.

The CPA is a broad piece of legislation that the Government has enacted to comply with an EU directive. While previous legislation existed in the Republic protecting various aspects of consumers' rights, this is the first time there is a codified system of rules relating to unfair commercial practices.

Until now, if a consumer had a complaint about an ad, they could complain to the Broadcasting Commission of Ireland (BCI) or the Advertising Standards Authority of Ireland (ASAI), a self-regulatory body set up and financed by the advertising industry to promote better standards in advertising and sales promotion. They can still complain to the BCI and the ASAI, but they can now also complain to the National Consumer Agency (NCA)

Under the CPA, the agency has powers of civil and criminal enforcement against advertising agencies and clients and can force an infringing advertiser to pay damages, prosecute them and order the payment of fines.

The new law shifts the onus away from the traditional "let the buyer beware" philosophy. Ad agencies and clients are now defined as traders who must act in good faith towards consumers, and must not impair the ability of a consumer to make an informed choice about a product or to lead a consumer to make a decision they would not otherwise make.

Among the key areas of consumer concern addressed in the legislation are: making false claims about a product or service; "baiting" customers by advertising for sale products that are not available; pyramid selling; prize draw scams, certain types of advertising directed at children and persistent and unwanted cold calling.

Promotions, advertisements and product information must be clear and accurate, all relevant information must be included and the information provided must not lead a consumer to confuse the product being offered with a competing one.

For example, claiming a product has been discounted by €100, when in fact it was never offered at the higher price, or claiming a product is friendly to the environment without having objective evidence to back up the claim, is now unlawful.

Consumers can get a prohibition order by complaining to the NCA and businesses can complain to the agency about a competitor's advertisement. The maximum fine is €60,000. Businesses can also take private actions against their competitors, though they have no right to damages.

But is this all really necessary? Says Alistair Payne, solicitor in Matheson Ormsby Prentice: "When I arrived in Ireland from Australia three years ago, I thought I had come to the wild west of advertising. I talk to ad agencies about this new legislation and they tell me they already feel bogged down in legislation. But I tell them this is only the beginning. Once businesses and consumers understand the implications of the Act, everybody will have to raise their game to comply. One of the most revolutionary elements of this Act is the right for businesses to take private actions to prevent competitors from running advertisements or promotions which contravene the Act."

Payne added: "Businesses will have to set up training programmes for all sales and marketing employees to ensure that they understand their obligations and the standards set by the Act and they will have to appoint an internal compliance officer to review all advertisements due to be published by that business, with a view to ensuring they conform to the standards expected."

siobhan@businessplus.ie