Nicola Mawson
As the South African marketplace becomes increasingly cutthroat amid economic challenges, a concerning trend is emerging: companies are increasingly adopting unethical marketing practices to gain a competitive edge.
Recent findings by the Advertising Regulatory Board (ARB) alongside court decisions reveal a disconcerting rise in the imitation of established brands, along with a slew of misleading advertising tactics.
ARB CEO Gail Schimmel told Business Report last week that the body was seeing a slight increase in complaints about imitation and exploitation of goodwill.
This, she said, was partially due to more confidence in the Board, but also because there was a growing move towards unethical advertising in the marketplace.
“There does seem to be an increase of this behaviour in the marketplace. The increase in the marketplace is partly due to an increase in unethical marketers who enter the marketplace with the specific intention of imitating best sellers as close as they can, without actually infringing trademarks,” said Schimmel.
"This sort of behaviour flies under the radar in countries where there is no self-regulatory organisation protecting that grey space between ethical packaging and trademark infringement.“
Another issue, she said, was the concept of “dupes” that were popularised by social media platforms like TikTok.
“Some marketers are leaning into being a ‘dupe’ for a TikTok sensation product, and in doing so may end up in breach of the Code,” Schimmel noted.
This Code is based on the International Code of Advertising Practice prepared by the International Chamber of Commerce.
Schimmel explained that there were other areas of the law that overlapped, such as copyright, passing off, and trademark infringement.
“It is up to the party bringing the complaint to choose their forum – but the ARB is both cheaper and faster than the courts, although our teeth are less sharp,” she said.
The ARB is obliged to investigate if a complaint falls within its jurisdiction, has prima facie merit, and deals with advertising, Schimmel said. She added that the Board cannot brush the issue off by passing it along to another body.
One recent decision that ended up on appeal and went in favour of beauty product provider, L’Oréal South Africa, after Nutriwomen’s packaging of its Dermacare range was found to be using the same colour scheme, plastic packaging, and list of ingredients, among other similarities of L’Oréal’s CERAVE product range.
Moreover, Nutriwomen said during the hearing that it undertook extensive market research, which meant that it should have been aware of competitors’ packaging, making it questionable that these similarities were coincidental.
The ruling, handed down on 15 October, also highlighted the fact that the advertising agency, which had been operating for 21 years, should have known better.
Nutriwomen was found to have taken advantage of L’Oréal’s established goodwill, and breached the prohibition of the recognisable copying of another brand’s advertising or product concept.
“It was argued that the shift between the former packaging and Nutriwomen’s current packaging makes clear that Nutriwomen intended to copy the get up of CERAVE,” according to the ruling.
“The complainant submitted that it already had reports of consumers confusing its products with the Nutriwomen products on social media and elsewhere.”
Serge Sacre, L’Oreal South Africa country manager, last week said “the decision reinforces the importance of safeguarding brand identity and market integrity within the competitive landscape”.
Sacre added that the company welcomed the ARB Appeal Committee’s decision, which demonstrated a “commitment to upholding the rights of consumers, protecting intellectual property rights and preserving brand and product reputation”.
A numerous attempts by Business Report to elicit a response from Nutriwomen were unsuccessful but the company still has one avenue left for appeal against the ruling.
BUSINESS REPORT