Open season for snake oil salesmen?

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Posted 23 November 2015

This article written by patent attorney, Hans Muhlberg, is reproduced here with permission from the author.

Open season for snake oil salesmen?

Does the Advertising Standards Authority of South Africa  (ASA) have the jurisdiction to rule on adverts placed by companies that aren’t members of the ASA?

If you’re involved in ASA matters, you’ll know that it’s not uncommon for the ASA to rule on such ads. You’ll also know that these rulings tend to be effective, despite the fact that the ASA is a voluntary body, whose rulings are only binding on its members. The reason is simple –  the SA media companies (electronic, TV, print, billboard) belong to the ASA, which means that as soon as the ASA rules that an ad contravenes the ASA Code (by making unsubstantiated claims for example), the media companies refuse to touch the ad. So the ad’s dead in the water.

Is that all about to change?  The decision of Acting Judge Dippenaar to grant an urgent interim interdict (injunction) in the case of Medical Nutrition Institute (Pty) Ltd v The Advertising Standards Authority (Gauteng, 18 September 2015 ) suggests that it might.

Judge Dippenaar’s decision will certainly be welcomed in the world  of quackery – those companies that dupe the stupid and the vulnerable into buying ridiculous potions that are guaranteed to lead to extraordinary weight-loss, a  miraculous end to nicotine addiction, record-breaking erections and what-not. Because, as Harris Steinmann and the other activists who try to stop these abuses will tell you, the reason why they take these essentially medical matters to the ASA is not because they think that the ASA is the best forum for them. They go to the ASA because it’s the only forum that does anything. That’s because, thanks to the general atrophy that we now accept as the norm, the relevant medical authority, the Medicines Control Council, apparently doesn’t offer any solutions.

What happened in this case is that MNI, a company that does not belong to the ASA,  sells a product called AntaGolin. Its advertising material promises that it ‘combats insulin and assists in weight loss’. This claim was challenged at the ASA by Steinmann, and MNI was unable to substantiate the claim. So the ASA ruled against the advert, issuing  an Ad Alert. MNI applied to the High Court for an urgent interdict, pending the institution of full trial proceedings. In the words of the judge, MNI was saying that the ASA ‘is unlawful in purporting to be the regulator of the advertising industry and .. cannot arrogate to itself the right to control advertisements sought to be placed by non-members who do not subscribe to …(its) code.’ 

During the throw-whatever-stuff-you-can-think-of-into-the-mix process that’s such an integral part of legal proceedings,  MNI made various claims:  it had suffered damage because it was unable to shift its product (R25 million in damages nogal); the advertising of its product is not regulated by the ASA Code, but rather  by the Medicines Control Council under the Medicines Act, not to mention the Consumer Protection Act (CPA); and the ASA is not an accredited regulator under Section 97 of the CPA.

The ASA responded with claims of its own:  the ASA is officially recognised by Section 55 of the Electronic Communications and Transactions Act (ECTA); the ASA is an organ of state; this case should not be heard because there’s a similar case (Herbex) going on (lis pendens); this case shouldn’t proceed because Steinmann should’ve been joined in the proceedings; there’s no need for an interdict because damages would be an adequate remedy (in response MNI said no they bloody well wouldn’t, everyone knows the ASA’s broke – ouch!).

The judge found for MNI. She felt that Steinmann did not need to be part of the proceedings. She held that there are existing statutory regulators, being the Medicines Act and the CPA. She said that the ASA’s reliance on its apparent ECTA recognition was wrong, because ECTA regulates electronic communications and broadcast licensees rather than advertisers and, what’s more, it’s ICASA not ASA that’s concerned with complaints. She saw fit to mention that the ASA had not received accreditation under the CPA. She felt that it was relevant that the ASA had not disputed the expert evidence led by MNI in these proceedings, which said that the product is not harmful and does possess the qualities it claims to possess.

The MNI was entitled to an interdict – there was a prima facie right, the ASA ruling was defamatory and injurious,  the ruling also offended against the constitutional rights of freedom of association and speech,  MNI had a reasonable apprehension of harm, and the balance of convenience favoured it.

So the ASA was interdicted from imposing any sanctions (including Ad Alerts) on AntaGolin, and from stopping MNI from asserting in ads in any media that AntaGolin combats insulin resistance and assists with weight loss. The ASA was also required to remove the ruling against AntaGolin from its website. NMI was ordered to institute full trial proceedings within 20 days.

It’s important stuff!

[note note_color=”#fcf88a”]Editor’s note: Megan Power of the Sunday Times also focussed on this very important issue in the Sunday Times of the 15th November 2015. She makes the point that the Medicines Control Council DO see a role for the ASA in evaluating claims for these products.[/note] [note note_color=”#fcf88a”]

Although the judge “felt that it was relevant that the ASA had not disputed the expert evidence led by MNI in these proceedings, which said that the product is not harmful and does possess the qualities it claims to possess”, MNI’s expert evidence to the ASA was not so explicit. It is not clear what “expert evidence” the judge has access to.

The more senior and more experienced of Antagolin’s experts, according to the ASA ruling, stated that: “the small sample size prevents drawing a firm conclusion”; and “[t]he study had no informed consent and no ethical approval was obtained for it”; and “… should these data and this analysis be presented for registration purposes to the Medicines Control Council (MCC), serious barriers will arise at the regulator in this regard”. [my emphasis]

The judge further stated that “[f]or purposes of this application it must thus be accepted that the applicant’s assertions regarding the qualities of AntaGolin, viz that it combats insulin resistance and assists in weight loss are true.” paragraph 96.

It is hard to understand how the judge could make such a definitive statement in light of the expert opinion above, unless, of course, she was not provided with it; or the ASA ruling inaccurately reflected the senior expert’s evidence.

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