ARCON Act Section 54: Beyond emotion and propaganda, By Adams Atata

An opinion piece; ‘ARCON Act Section 54: A new threat to business growth in Nigeria’ by one Saheed Akinola caught my attention in The Nation newspapers of Wednesday 23, October and I immediately developed an urge to respond to some of the issues raised by the author.

To start with, I think it will be necessary to state that I’m not an advertising practitioner but a Lawyer and a Sociologist. Strangely, it wasn’t the legal interpretation of the referenced section of the ARCON Act that provoked my curiosity but my knowledge and experience as Sociology Lecturer for many years before veering into Law. And as a Nigerian consumer, I’m equally affected by issues related to advertising and marketing. Many times, I or members of my family have fallen victims to deceitful campaigns.

One of the questions Sociology scholars battle to answer is question appurtenant to social order, and in this context is the regulation of advertisement and the protection of the consuming public from the vicious consequences of the Macdonaldisation of our society through a microcosm beaming of searchlight on the nexus between advertising and individual well-being as it affects the collective conscience of the society. Can advertisers be blamed for the negative perception of consumers? What is the place of regulation in promoting sanity in the marketing communication? Who bears the burden of deceitful campaign; the advertiser, the regulator or the consumer. The questions are endless but the last question gives a straight forward answer; the advertiser sells and smiles to the bank, the regulator faces criticism while the consumer looses money or suffers serious health challenges due to consumption of substandard products.

To this end, I see the need for stakeholders to lay to bear the issues around Section 54 of the ARCON Act once and for all, because it speaks to the core of advertising regulation. Unfortunately, like Akinola’s article in The Nation on Saturday, many of such articles have been sponsored by some individuals within the corporate Nigeria because they feel the section is hampering their unbridled use as advertisers to lure in consumers.

As rightly pointed out by the writer of the misleading article, Section 54 of the Advertising Regulatory Council of Nigeria (ARCON) mandates that no person, corporate entity, or agency can advertise products or services without obtaining prior approval from the Standards Panel.

Though Akinola admitted that the law intends to regulate advertising practices and ensure standards, he yielded to emotion when he concluded that the far-reaching scope and the heavy penalties attached raise several concerns about its impact on business operations, especially for small and medium enterprises (SMEs).

Perhaps a second look at the section may be necessarily recommended to the gentleman for him to properly deeply decipher the message therein; “Any person including sponsor or beneficiary of an advertisement, body corporate, organisation or agency which creates or places for publication or exposure of an advertisement in any medium directed at or targeting the Nigerian market without the prior approval of Standards Panel commits an offence and is liable to such fine as stated in the Nigerian Code of Advertising Practice.”

Looking at the argument of Mr Akinola, perhaps a legal practitioner, and his concern about the penalties attached to breaking advertising law makes me sick because an elementary student of Jurisprudence is knowledgeable enough to know that there will be no enforcement without sanction.

The legal term “sanction” had come into existence after Austin’s ‘theory of sovereignty’ where he described “sanction” as one of the important elements of the law. According to this theory, any force that is applied by the State in order to administer justice could be termed as a sanction. They are blunt diplomatic tools that have been measured into the guidelines we know of today. The term “sanctions” in the field of law and legal theory, are deemed to be penalties or any other means of law enforcement tool that is used to provide an incentive to the obedience of the law, or any regulation or any other set of management or rules as provided by the State. A sanction may be defined as an element that is associated with accountability that corresponds to the consequences which result from the justification of the realization of such accountability.

In the current scenario, it’s obvious that the writer of the article under review knows but little about advertising and its regulation. Rather than dismissing ARCON Act section 54 as nothing but a distraction to businesses, he should have availed himself with literature about advertising ethics as well as report on campaign vetting and approval in different markets of the world.

In Nigeria and all over the world, communication materials are daily being subjected to legal scrutiny to be sure they don’t run against the principle of natural justice and public interest. In other words, the principle of nemo judex incausa sua and audi alterem pattem must not be overlooked.

It is on this note that the issue of false or misleading representations and deceptive marketing practices under the Competition Act becomes necessary for healthy advertising practice. The Competition Act contains provisions addressing false or misleading representations and deceptive marketing practices in promoting the supply or use of a product or any business interest. All representations, in any form whatsoever, that are false or misleading in a material respect are subject to the Act. If a representation could influence a consumer to buy or use the product or service advertised, it is material. To determine whether a representation is false or misleading, the courts consider the “general impression” it conveys, as well as its literal meaning.

The Act provides two adjudicative regimes to address false or misleading representations and deceptive marketing practices. Under the criminal regime, the general provision prohibits all materially false or misleading representations made knowingly or recklessly. Other provisions specifically forbid deceptive telemarketing, deceptive notices of winning a prize, double ticketing, and schemes of pyramid selling. The multi level marketing provisions prohibit certain types of representations relating to compensation.

The classic case of Kim Kardashian scenario in the United States in 2022 is a good example of how sanctions are used to put advertisers on their toes. After all said and done and Kim Kardashian was found guilty of unhealthy practice, she agreed to pay a US$1.26 million (NZ$2.2 million) fine for advertising EthereumMax on her Instagram page.

The US Securities and Exchange Commission (SEC) said the reality TV star had received US$250,000 for advertising the cryptocurrency, without disclosing she had been paid to do so. She also agreed not to promote crypto asset securities for three years.

A similar case in Nigeria was the MMM and other Ponzi schemes which Nigeria’s Securities and Exchange Commission (SEC), also overruled in 2022. The SEC DG, Lamido Yuguda had stated that the Commission would continuously collaborate and engage relevant agencies to eliminate completely all Ponzi schemes operations in the capital market. He said the SEC has been fighting a serious war against Ponzi schemes, and has been engaging and alerting Nigerians on the need to only deal with operators that are registered with the Commission.

Then last year, Nollywood Actress, Olutoyin Abraham, had no choice but to terminate her contract with RevolutionPlus Property Development Company Limited as a brand ambassador when she started receiving a lot of allegations and complaints from investors who claimed that the company had not allocated lands nor refunded them their monies.

Coming to ARCON, many controversial campaigns would have resulted in anarchy and unrest in the society if the regulatory body had not acted fast and nipped the crisis in the bud.

Last year, FrieslandCampina WAMCO, owners of the Peak Milk brand, was marked out for sanction by the apex advertising regulatory body for releasing to the public a creative material that was not vetted by it. The Christian Association of Nigeria (CAN) had condemned the makers of Peak Milk, over an offensive Easter advert that was said to have sparked outrage among Christians in the country.

Closely related was the furore generated by the Easter day advert of Sterling Bank which also brought to the fore the banana peel that often confronts the business of creatives anywhere in the world. In the said copy, which was published in major dailies on Sunday, 17 April, 2022, the bank had likened the resurrection of the Lord Jesus Christ to ‘Agege Bread’, a popular brand of bread that is very common in Agege, a suburb of Lagos.

As expected, many adherents of the Christian faith saw the copy as not just being offensive and insensitive; they also felt it was a denigration of the status of Jesus Christ, the symbol of the Christian faith all over the world. Again, ARCON rose to the occasion and saved the country from unnecessary religious unrest.

Going back to the Section 54 of the ARCON act which Akinola views as placing undue burdens on smaller enterprises that may lack the resources to navigate complex regulatory processes is an illogical conclusion. In a sane environment, the government regulates advertising materials, not only to promote healthy living but to protect businesses. By allowing advertisers to operate unrestrained, caution is most times thrown into the air as business owners would churn out deceptive materials to deceive the public. Under such circumstances, responsible businesses that play by the rule may be at a disadvantage while those with deceiving campaigns will be smiling to the bank at the expense of innocent consumers.

On the argument that subjecting businesses that rely on frequent advertising updates, such as those in the tech and retail sectors into missing marketing opportunities and hinder their ability to compete effectively, this is a baseless argument considering the framework of the current advertising regulatory system, which has put in place a measure that would fast track vetting and approval. Besides, APCON has decentralised its operations to address issues related to vetting as quickly as possible.

Finally, rather than criminalising ARCON on regulation and presenting the regulatory body as the enemy of businesses, stakeholders should rather come together and abide by global best practice. To me the ongoing campaign of calumny is nothing but emotional blackmail to set the body against the government and those who know but little about its operations. To build Nigeria, we need to promote the Rule of Law.

Adams Atata, a Lawyer, writes from Lagos.