With the Government preparing to transpose the Unfair Commercial Practices Directive to UK, Philip Circus, the ISP’s director of legal services, explains how this is likely to impact on sales promotion.

Members may have heard that there will be major restrictions on the use of the word “free” in marketing. This will come about as a result of the implementation in the UK of the Unfair Commercial Practices Directive. The Regulations to implement the Directive in the UK were, we understand, being laid before Parliament today (March 3). We also understand that the implementation date has now been put back from April 6th to May 26th.

There has been much uncertainty about these Regulations and, as of writing, we have still not seen the final text as it is to be presented to Parliament. And we have not seen any official guidance, including guidance being prepared by the Office of Fair Trading.

On the issue of “free”, the Regulations will identify a number of commercial practices which will in all circumstances be considered unfair. These include “describing a product as “gratis”, “free”, “without charge” or similar if the consumer has to pay anything other than the unavoidable cost of responding to the commercial practice and collecting or paying for delivery of the item”.

We believe that this will prevent the use of the word “free” in relation to free gifts with purchase. In doing so, it is bringing the UK into line with the rest of the European Union. The word “free” will only be possible in relation to free samples and any free gifts which do not require more than the unavoidable cost of a postage stamp or telephone call such as an absolutely free mail-in.

This does not stop any existing promotional mechanics. It simply means that the word “free” cannot be used in relation to them. For example, it would appear that “Buy One Get One Free” (BOGOF) will not be acceptable, but the mechanic will remain perfectly legal and will have to be described as something like “Two for the price of one”.

Clearly, this will have implications for other mechanics such as “Try Me Free” but we are in extensive discussions within the Committee of Advertising Practice Code Review on all the issues concerning the implementation of the Directive. It is vitally important that all industry bodies agree on how the new regulations should be interpreted and applied.

We will provide more comprehensive guidance in due course. In the meantime, the ISP does not believe there is any serious risk of any enforcement action against those running promotional marketing campaigns which are already running prior to the coming into force of the regulations and which also run beyond the implementation date. However, the ISP will be advising members from now on as to the requirements of the legislation.

If you have any legal queries, contact the ISP’s Legal Advisory Service on 020 7837 5340 or e-mail moragd@isp-las.co.uk.

For more background on the Unfair Commercial Practices Directive and other legal guidance, visit the ISP website at www.isp.org.uk.

ISP Legal Update: March 3, 2008