UK Law and Practice Contributed by: Huw Morris, Dominic Bray, Nick Swimer and Rebecca Coleman, Lee & Thompson LLP
transparency: consumers should know when they are interacting with AI systems and if content is generated using AI, which must be clearly stated. Post-Brexit, EU legislation does not have direct effect in the UK, but those principles may be reflected in UK AI leg - islation. The government has indicated its desire to create an AI-friendly business environment and has received considerable criticism from content owner rights bodies. Debate is ongoing. 8.3 Chatbots There are no special rules or guidance related to the use of chatbots in advertising, but the general prin - ciples of transparency and fairness under the CAP Code apply. Advertisers must ensure that consumers understand they are interacting with a chatbot rather than a human, particularly when the chatbot is used for promotional purposes. Chatbots that collect per - sonal data must comply with the UK GDPR, ensuring that users are informed about how their data will be used and stored. 9. Web 3.0 9.1 Cryptocurrency and Non-Fungible Tokens (NFTs) The advertising, marketing and sale of cryptocurrency and NFTs in the UK are subject to regulation by both the FCA and the ASA. Most fungible crypto-assets now fall within the FCA’s financial promotion regime pursuant to the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (FPO), with strict requirements on prominent risk warnings, a 24-hour cooling-off period for first-time investors, and bans on incentives such as “refer-a-friend”, as these products are often considered high-risk invest - ments. The CAP Code continues to apply alongside FCA oversight, especially to brand presentation and non-qualifying crypto-assets. NFT advertising remains primarily within the ASA’s remit, unless the NFT is itself a regulated investment. CAP Code Rule 3.3 requires that ads must not omit or hide material information that the consumer needs in order to make an informed decision, nor present it in an unclear, unintelligible, ambiguous or untimely man -
ner, and the ASA has adjudicated against companies that fail to meet these requirements. 9.2 Metaverse There are currently no specific regulations governing advertising within the metaverse, but general adver - tising rules under the CAP Code remain the primary framework. All the usual standards regarding the truthfulness, transparency and clear labelling of ads therefore apply whether an ad appears on a VR head - set, inside a 3D game world or on a traditional screen. Whilst the initial metaverse buzz may have cooled since its peak in 2022, immersive tech is increasingly being adopted for brand activations and shopping experiences. The ASA has indicated that it will con - tinue to monitor how ads are presented in this virtual space, to ensure they meet the same standards, with special attention to targeting ads to children or mis - leading consumers with virtual promotions. For now, however, there are no proposals to supplement the existing codes with specific metaverse provisions. Certain products are subject to stricter advertising regulations in the UK, such as food, drugs, medical devices, alcohol, vaping/tobacco products and can - nabis. Most of these regulations emanate from EU leg - islation, and since Brexit the UK has generally adopted its own versions of EU legislation. For example, since 1 January 2021, post-Brexit, only authorised health and nutrition claims listed in the Great Britain Nutri - tion and Health Claims Register may be used in the UK (the EU Register previously applied). The phased ban on paid-for HFSS advertising online and on TV before 9pm is confirmed to start on 5 January 2026, but many in the industry have voluntarily agreed to enact the ban from 1 October 2025. 10. Product Compliance 10.1 Regulated Products Advertisements for medicinal products are regulated by the MHRA under the Medicines Act 1968. Vap - ing and tobacco products are subject to strict legis - lated advertising restrictions under the Tobacco and Related Products Regulations 2016, as well as under the CAP Code, particularly in relation to protecting
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