In what was billed as a David vs Goliath battle, a soap and detergent manufacturer took its competitor Colgate-Palmolive and the Advertising Regulatory Board to the South Gauteng High Court – and won.
The board’s memorandum of incorporation is binding on its members, who control the print, digital, and broadcast media in South Africa. Its MOI and the code allow the board to make rulings and orders against non-members. Thus, if a non-member refuses to comply with an ARB ruling, the members of the ARB are required to refuse the non-member’s advertising after an “ad alert” – a notice to members – has been issued. The advertiser cannot advertise unless it complies with the ruling.
It alleged Bliss had violated clauses of the ARB code, which deal with “exploitation of advertising goodwill” and “imitation” in advertising, raising legal issues to do with contraventions of copyright law and trademark infringement. Fisher upheld the complaint that the ARB sought to exercise judicial authority, when it was not a court, in contravention of section 165 of the Constitution.
“We believe the judgment, which ruled on an issue that was not actually raised by the parties in their original papers, is deeply flawed. This is … mostly because it will leave the consumer completely exposed when it comes to unscrupulous advertisers and claims, with no affordable recourse. The consumer, not the competitors, are the real losers if this judgment stands.”
Colgate-Palmolive “claimed we were trading on their marketing goodwill and advertising architecture. We went through the motions with the ARB and they ruled against us. They said we must change the packaging architecture. Although we did not agree with the merits of the ruling, we made a commercial decision to comply. We don’t have massive resources to fight it.
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