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05 June 2019

The "average consumer" test is analysed by the High Court

The High Court has upheld the Advertising Standards Authority’s (ASA) decision which concluded that the use of the term “fibre” in broadband advertisements for part-fibre services was unlikely to mislead the average consumer.

Background

In November 2017, the ASA announced the conclusion of its review of ‘fibre’ broadband and in particular the current use of the term ‘fibre’ in advertising to describe both part-fibre and full-fibre broadband services. As part of its review process, the ASA had consulted a number of key stakeholders, received a range of responses from providers of part-fibre and full-fibre broadband services, consumer organisations and other regulators and commissioned independent consumer research.

In light of the research and evidence obtained, the ASA concluded that the term “fibre” was not one of the priorities identified by consumers when choosing a broadband package, was not a key differentiator and that once educated about the meaning of fibre, participants did not believe they would change their previous purchasing decision. The ASA therefore did not think that the word ‘fibre’ should be changed in part-fibre advertisements.

CityFibre, a full-fibre broadband provider, argued that “full-fibre”, where data is transmitted via optical fibre cables directly into subscribers’ premises, is objectively superior to “part-fibre”, where such cables terminate at street cabinets and are transferred to the subscribers’ premises via a copper cable. Accordingly, a provider of part-fibre services should not be able to advertise its broadband service using the word “fibre” without making it clear in the advertisement that the broadband service is part-fibre – as this would be materially misleading.

To establish a successful judicial review of the ASA’s decision, CityFibre had to prove that the ASA had made an error of law and/or been irrational. CityFibre claimed was that the ASA had erred in law because in reaching the decision, it applied the wrong test for determining the meaning of the "average consumer" under the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277).

The Decision

Under the above regulations, the average consumer is assumed to be reasonably well-informed, reasonably observant and circumspect. The issue for the judge was: how well-informed must the average consumer be to be "reasonably well-informed"?

The judge rejected CityFibre's argument that the average consumer is reasonably well-informed about the specific features and/or characteristics of the relevant product or service in the advert - in this case, having the requisite level of knowledge to be able to distinguish between full-fibre and part-fibre. Instead, the judge said that it was “not sensible” to expect the average consumer to have this level of understanding and instead that the average consumer is only to be considered reasonably well-informed about the product or service more generally.

The judge also explained that it was important to consider the average consumer as a “particular population of actual persons”, this being the target audience of the advert. In this instance, the judge found that the ASA were right to take into account results from surveys from this target audience together with independent research when making its decision of whether the advert would mislead that audience.

The judge said that it was clear that the ASA had neither made an error of law, nor acted irrationally and therefore the claim was dismissed. Cityfibre is considering an appeal.

Cityfibre Ltd, R (On the Application Of) v The Advertising Standards Authority Ltd & Anor [2019] EWHC 950


For more information please contact Lydia Zakrewski on +44 (0)20 7438 2104 or at Lydia.Zakrzewski@crsblaw.com.

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