I am honoured to be invited to talk here this
morning on the subject of "Product
Promotion-Advertising. Media, Legal Requirements". I
am honoured because I have been invited to speak
about a subject about which it could be argued, that
I am not qualified. You see, I am certainly not
trained in the business of Law. On the other hand,
after nearly 20 years in the advertising business in
five countries, I have had some practical experience
relating to the legal requirements of advertising.
 
In every country I know of, there are laws, rules of
the media and codes of ethics controlling
advertising in various manners and in varying
degrees. There are also different techniques used by
governing bodies.
 
But whatever the situation, and whatever the
conclusions in my paper on the subject, I believe
that there must be controls on advertising.
 
From this, comes, in my view, the most important
question related to the subject. I shall ask it now,
and I shall ask again at the end of this talks.
There are two basic ways in which advertising can be
controlled:
 
1. By legislation.
 
2. By self-government by the industry.
 
Which is the most desirable to industry?
 
Although there are many ordinances related to
product promotion and advertising in Malaysia, in
practice the current situation seems to be one of
self-government by the advertising industry to a
Code of Ethics. One rarely hears of court cases and
prosecutions in this country, even though there are
occasional breaches of the Malaysian Code of Ethics.
This, by and large is similar to the British system
which is also basically self-governing.
 
So, whilst often many of us in the advertising and
marketing business in Malaysia are heard complaining
bitterly about rules and regulations and what they
can and cannot do, we will find that we are actually
not too badly off.
 
Let us take a brief look at two other countries
where the advertising industry is very
developed-Australia and the U.S.A.
 
In either of those countries, if you break the rules
blatantly, there are quick and severe punishments
which include:
 
* immediate banning of your company's advertising.
 
* embarrassing court cases, often resulting in large
fines.
 
* jail sentences for the advertiser and possibly his
agency.
 
In Australia:
 
There are three main bodies that control legal and
moral aspects of advertising and promotions:
 
1. Federal Trude Practices Commission: Set up under
The Trade Practices Act. Its power is limited to
incorporated companies or interstate traders. It has
no jurisdiction over small local businesses.
 
Fines for misleading advertising are very severe.
For example, a major Japanese electronics company
was recently fined A$100,000 for a breach of code.
The law also allows for jail sentences for
offenders. The Advertiser is normally responsible,
but the agency can also be liable.
 
2. State Industrial Law: This covers most local
cases. Fines are not as heavy as Federal Trade
Practices Act. Often companies are exonerated by
printing apologies. For example, if there were
shortfalls of products advertised.
 
3. Combined Media and Agency Body: Now headed by
Justice Kerby - the previous head of the Industrial
Court. This body controls the Advertising Standards
Authority (a similar body to that in Malaysia}.
 
 
In addition to the above there is another body
called the Press Council, but this is not normally
involved in advertising per se. It is more closely
involved in breaches of press publicity, adverse
reports, etc.
 
In the U.S.A.:
 
F.T.C. - Federal Trade Commission. A very powerful
body backing the Advertising Standards Authority.
 
F.T.C. has many powers, including:
 
1. Ordering of corrective advertising immediately.
1.
 
2. Order to stop advertising.
 
3. Heavy fines for offenders
 
4. Heavy legal costs for offenders, and very often
heavy costs involved in answering F.T.C.'s
questions. For example, F.T.C. might ask an
advertiser for very detailed information about the
history of the product and advertising and technical
details about the product. This can often involve
considerable cost in research just to answer the
initial questions.
 
In Australia and U.S.A., the most common offenders
are used car dealers and land agents. Car offenders
frequently break the code by advertising bargains
that are not available (sold just before the
customer walks into the showroom, and he is then
high pressured into a more expensive vehicle).
 
Land agents have frequently been prosecuted for
misleading advertising. There was a recent example
in Florida where many consumers were tricked by
false advertising into buying land which was
actually below the low tide mark, under water. Large
corporations rarely break the rules knowingly but it
can happen. . . only last Wednesday I noted an
article in the Malaysian press where it was reported
that a U.S. Federal Trade Commission judge ruled
that Sterling Drugs, makers of Bayer aspirin in the
States, had "touted their products with a series of
misleading claims". This particular case was
expected to be appealed.
 
And in the less developed countries there are also
rules and regulations. On February 2nd I noted an
article in the Malaysian press reporting that in
China, some advertisers have been accused by
government of "giving away state secrets in their
sales pitches!"
 
The same article reported that the "People's Daily"
had brought up the question of Truth in Advertising.
One case was where high-performance products had
been advertised, but the factory had not even been
built yet. Another case cited was of a factory that
could make toothpaste that could prevent influenza!
The article did not say what the punishment was.
 
That is all very interesting, but let us get back to
Malaysia, and examine how advertising is regulated
here.
 
We have two main codes under which we govern and
control the content, ethics, morals and truth in
advertising.
 
a) Malaysian Code of Advertising (Advertising
Standards Authority).
 
b) Advertising Code-Ministry of Information
(Angkasapuri).
 
The former is probably the most detailed of the two,
and contains in detail all the relevant "no-no's".
It also goes into great detail on a number of main
topics covering all media.
 
The latest Code of Ethics was issued in June 1977
and is still basically valid except for a few
additional restrictions which have been instituted
in the past year or so.
 
The Angkasapuri Advertising Code is basically
compatible with that of the Advertising Standards
Authority, but is much more specifically related to
the Film and Radio media.
 
I cannot assume that everyone in this room is
completely familiar with either document, but on the
other hand, we do not have the time to go through
all the details contained in them.
 
However, it is important for you to have an
understanding of the basic regulations, so, here is
a summary of the contents of the Malaysian Code of
Advertising:
 
I. The Advertising Control System
 
The code represents the Advertising Standards
Authority of Malaysia, whose members are drawn from:
 
a) Federation of Malaysian Consumers' Association.
 
b) Malaysian Newspapers' Publishers Association.
 
c) Association of Accredited Advertising Agents.
 
d) Malaysian Advertisers Association.
 
The responsibility for observing the code rests
primarily with the advertiser, but it also applies
to the advertising agency, or in some instances with
the medium involved in publishing an advertisement.
The main sanction is simply the withholding of
advertising space or time from the advertiser. This
is wielded by the Advertising Standards Authority
and applied by the media. To this can be added the
sanction of adverse publicity against the offender,
by the publishing of regular details of
investigations.
 
Complaints against alleged misleading advertising,
untrue statements, or other breaches of the codes
can be made by members of the public, or by
companies. All that is necessary is a letter
indicating the basis of the complaint. This is
normally accompanied by examples of, or copies of
the offending material.
 
Investigations are not initiated without written
confirmation from the complainant.
 
Normally, in Malaysia, the advertiser or agency is
then contacted and asked to substantiate their
claims, or answer the question against them if the
complaint is related to an ethical or moral matter.
If they cannot substantiate the advertising
campaign, then it is withdrawn immediately. If the
advertisement is also breaking the normal laws of
the land, for example;
 
* slandering or liable to persons of companies, or
 
* guilty of breaking the gambling or lotteries laws,
then normal prosecution action may result.
 
The introductory section of the code covers these
points which are in fact the foundation:
 
a) Advertisements must project the Malaysian
Identity, reflect the multiracial character of the
country, and advocate the philosophy of
"RUKUNEGARA".
 
b) They must not identify or type-cast each
particular racial group.
 
c) They must pay attention to the Trade Descriptions
Act.
 
d) They must comply with the Law, common or statute.
Advertising must not propagate fraudulent trade
practices.
 
e) They shall be legal, decent, honest and truthful.
 
 
f) They shall be prepared with a sense of
responsibility to the consumer.
 
g) They shall conform to the principles of fair
competition.
 
h) No advertisement shall bring advertising into
disrepute or reduce confidence in advertising as a
service to industry and the public.
 
The Scope: The primary objective of the Code is
regulation of commercial advertising-hopefully
self-regulation by understanding and appreciation of
the Code in the spirit of its meaning as well as to
the letter.
 
 
II. General Principles include details of:
 
Decency
 
Honesty
 
Fear, Superstition, Violence, Illegality
 
Truthful Presentation
 
Comparisons
 
Denigration
 
Exploitation of name or goodwill
 
Imitation
 
Testimonials
 
Protection of privacy and exploitation of the
individual
 
Identification of advertisements
 
Safety
 
Children and Young People
 
Guarantees
 
Money-back undertakings
 
Stridency
 
Sensitivities
 
Subliminal advertising
 
Outdoor advertising
 
All of these subjects are very interesting and
covered in detail. We would spend a lot of time
discussing them, but time does not permit. I would
recommend that everybody in advertising or marketing
has a copy of the code and reads or refers to it
regularly.
 
 
III. Specific Categories of Advertisements
 
The previous regulations cover all products, but
there are certain product types that require
additional regulations:
 
Alcoholic drinks-not only the drinks themselves, but
including breath-testing devices and related
products. It is of note that alcoholic drinks have
now been banned completely from television and will
soon be banned in some areas in outdoor advertising.
 
Artificial sweeteners and monosodium glutamate
 
Charitable Causes
 
Claims to "Chartered" status
 
Smoking deterrents
 
Commemorative and other items produced in limited
editions
 
Employment and instructional classes
 
Financial advertising
 
Franchise schemes
 
Inclusive tours
 
Mail-order advertising
 
Property advertising
 
"Sales" advertisements
 
Sales promotions
 
Self-defence courses
 
TV & Radio sets and other domestic appliances on
rental.
 
 
IV. Unacceptable practices connected with
advertising
 
a) Switch selling
 
b) Unsolicited Home Visits
 
c) Inertia Selling
 
d) Non-Availability of products advertised.
 
 
V. Medicinal & related products and advertisements
containing health claims.
 
Special care must be taken by advertisers in
observing these regulations. Approval must be
obtained from the Health Department prior to
publication of advertising.
 
This is not only a legal requirement, but
particularly important as a human responsibility on
behalf of all advertisers promoting these types of
products, services, or treatments.
 
The scope of these additional regulations cover
medicines, medical, surgical treatments, appliances,
some toiletry products, or any other product that
may be advertised on the basis that it may improve,
restore, or maintain the user's health or his
physical or mental condition.
 
With food products, there can never be any
suggestion that such a product is recommended by the
medical profession, prescribed, or approved by
medical practitioners.
 
Claims of medical or other professional support must
be clearly and carefully substantiated and not
exaggerated in any way.
 
The medical code also contains sections dealing with
safety and protection of children/unacceptable
general terms/unacceptable claims (including
particular products)/diseases to which no reference
(or limited reference) can be made.
 
In addition to all this, the Code carries appendices
detailing all the Ordinances which are applicable
under the law to advertising and promotion of
products. They have a wide range from Ordinances
such as those covering food and drugs, to dangerous
drugs, to emblems and names, to indecent ordinances,
to moneylenders to copyright and even those covering
gambling.
 
The second Advertising Code to which I referred
earlier in this talk is that of the Ministry of
Information-Angkasapuri. This advertising code, is
naturally, much more specifically related to the
film media, and covers requirements for. TV Cinema
and Radio.
 
The biggest difference between it and the Malaysian
Code of Advertising Practice is that it is enforced
from the very start of the campaign. All scripts,
storyboards and films must be approved at each stage
by Angkasapuri before they are allowed on air.
Whilst this can be argued as being restrictive, it
can also be a safeguard for many advertisers who may
later have otherwise had to withdraw their
advertising.
 
The Angkasapuri Code also contains a considerable
amount of technical requirements, which are not
really related to this talk. The Angkasapuri Code
basically reflects the spirit of the Malaysian Code
of Advertising Practice, but is less detailed and
specific. It covers these major issues:
 
* Space farming, testimonials, trade marks and
contests.
 
* Advertising and children.
 
* Advertising of medicine and testimonials.
 
* Non-acceptable medical advertising.
 
* Women in advertisements.
 
* Men in advertisements.
 
* Technical requirements.
 
* Rules-Made-in-Malaysia films.
 
* Contracts-terms and conditions.
 
* Laws affecting advertising.
 
The general preamble of this code is similar to the
first, the basic additions being:
 
a) "Application of a product to certain parts of the
body such as armpits is not allowed".
 
b) "Adaptation or projections of foreign culture
either in the form of clothings, activity or
behaviour is not allowed".
 
c) "Clothings with imprinted words or symbols which
could convey undesired messages or impressions will
not be allowed".
 
d) "Advertisements must not discredit or attack
unfairly other products, services, or advertisements
directly or by implication".
 
e) The rules relating to the use of children in
advertising are more strict. "The use of children
should be discouraged unless the products advertised
have a direct bearing on them.  Telecast time of
advertisements featuring children will be limited
 
f) Unacceptable products for advertising on
television are similar except for the deletion of
liquor and alcoholic beverages; pork or pork
products; speculative finance advertising; death
notices, funeral arrangements, congratulatory
messages; fortune tellers and the like; matrimonial
agencies, etc.; betting agencies, etc.
 
g) The use of women in advertising is more
restricted, particularly in relation to standards of
dress and behaviour. These are more strict than the
standards allowed for entertainment programming, as
well as advertising in other media.
 
So, there you have it. . . after all that, you may
think we are heavily restricted by rules and
regulations. That may be, but these restrictions are
not nearly as complex or difficult as those in
America and Australia. Nor is the average advertiser
likely to risk serious legal action as in those
countries. In practice, the system in Malaysia is
more or less self-governing, and if there are
breaches, then the offenders are normally prevented
from publishing their advertising whilst the
questions are sorted out.
 
There is a further degree of protection in this
country in that, for film, we must get approval of
the scripts first. This particularly applies to
tobacco products -for which there is a separate code
of ethics and practice.
 
And, of course, if an advertiser produces an
advertisement that is clearly in danger of breaking
the law, then very often the medium (or publication)
will not accept it. In extreme cases, he too, can be
prosecuted.
 
That brings us to question time. I think I've
outlined the basic situation in Malaysia, and how it
compares with some other situations. And at times I
have given my personal view. But before you ask me
any questions, let me finish by posing what I think
are the most important issues for discussion:
 
1. Is the Malaysian public adequately protected from
unscrupulous advertisers?
 
2. Is industry unfairly discriminated against, or
over-controlled?
 
3. Is misleading, untruthful or unethical
advertising a problem in Malaysia? . . . or likely
to become one?
 
4. Which is the best system. . . self-government of
standards by observing the Code? OR
 
. . . strict legal control by legislation?