Part 2: Codes and Legislation

By the end of this lesson you will be able to:

Explain the structure and core principles of the CAP Code, including key sections relevant to promotional marketing, pricing, harm and offence, children, data use, and sector-specific rules.

Distinguish between lawful prize promotions and illegal lotteries, applying the Gambling Act 2005 to determine when payment to enter is permitted and when a free-entry route is required.
Apply key legislative requirements including the UK GDPR, Data Protection Act 2018, DMCCA 2024 and HFSS restrictions — to ensure promotional marketing campaigns are compliant, fair and transparent.

2.1 – The CAP Code

We are currently on the 12th edition which came into force in September 2010. The Code is updated periodically as legislation or consultations on marketing practices or products require, and the website has a section which records the changes since 2010. In April 2025 there was a significant update to reflect the Digital Markets, Competition and Consumers Act 2024 (DMCCA) to bring advertising in line with the consumer protection legislation and broadly replaced the Consumer Protection from Unfair Trading Regulations 2008.

This sets out the overriding principle that marketing communications should be “legal, decent, honest and truthful”. Importantly, it clarifies that the “primary responsibility for observing the code falls on marketers”.  Marketers means the brand in this context.  Agencies are also obliged to comply with the Code but the brand holds ultimate responsibility.

This can include ads or banners that are not clearly identified as ads.

This section states that marketing communications must be identifiable as marketing communications. The sender must be clear that they are acting commercially and have to label advertorials as “advertisement features”.

 

This covers the content of the marketing communications. This section contains a list of specific information required where advertising a price promotion, when a product can be called “free”, and details price comparisons and the use of endorsements and testimonials. This section also lists three things that cannot be claimed:

  1. That the product helps winning games of chance,
  2. That the sender’s job is at risk if the intended purchaser doesn’t purchase the product, and
  3. No marketing communication can promote a pyramid scheme.

This section also covers when it’s permissible to say “subject to availability”. For more detail on price comparisons see later under the DMCCA.

“Particular care must be taken to avoid causing offence on the grounds of: age; disability; gender; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion or belief; sex; and sexual orientation. Compliance will be judged on the context, medium, audience, product and prevailing standards.”

This draws in references to minors, drinking and driving as well as an obligation to take care to use visual effects which might trigger photosensitive epilepsy in the audience.

Recent cases with the ASA (three upheld over Summer 2025) have seen complaints upheld for causing harm or offence by trivialising violence against women (and specifically here, making the ad available on a platform with an age-rating of 4+ which breached other Code sections) and including harmful gender stereotypes.

One case from 2023, with one complainant, was upheld for being harmful or offensive to children within section 4 and separately within section 5.

Childre, defined as under 16. Interestingly, the privacy legislation and the legal definition of an adult are both different ages (and different from each other) so there are some murky areas.

“Marketing communications addressed to, targeted directly at or featuring children must contain nothing that is likely to result in their physical, mental or moral harm”.

Children can’t be depicted doing hazardous activities and children may not be subjected to any attempts to pressure them to purchase the product. This section contains very specific information for prize promotions aimed at children (section 5.6) which need to be read in conjunction with section 8.

In 2022 an advert for a food popular with children was eaten in an unsafe manner (Dairylea). The Promoter had researched the audience, and the segment had an Ex-Kids restriction (“scheduled away from programming commissioned for, principally directed at, or likely to appeal to children under 16 years of age”). Despite this, the ASA upheld breaches of various breaches of section 5 amongst others:

This covers identifying people or their views approval without consent, this includes the Royal Family. See DPA/GDPA.

This section covers political adverts.

Promotional Marketing. This covers “promotions (e.g. competitions, prize draws, instant wins, front page flashes, charity promotions etc) and incentive schemes. The rules cover the administration of the promotion, as well as the publicity.”

It’s important to understand the different ways of awarding prizes or rewards to a limited number or percentage of entrants. Prize Draws may seem similar to lotteries but no-one can run a lottery without a licence from the Gambling Commission. A person running an unlicenced lottery is a committing a criminal offence under the Gambling Act 2005 and sanctions can include imprisonment and a fine (not to mention the reputational issues).

There’s a small list of types of lottery that can be run without a licence but these are not usually appropriate.

This section was removed in August 2015 as B2C distance selling contacts are covered by the Consumer Contracts (Information, Cancellation, and Additional Charges) Regulations 2013. The Data & Marketing Code of Practice is also applicable.

The use of data for marketing – this section starts with a reminder of the UK GDPR, DPA and PECR and ICO guidance which also apply.

The section has a lot of overlap with current privacy legislation.

It also includes, at 10.15 – 17, more detail on children. Where the personal data of a child under 13 is processed for online services and on the basis of consent, the parent’s verifiable consent usually has to be provided.

This section includes guidance on what claims must be based on or include, guidance on absolute and comparative claims, and states that marketing communications must not mislead in terms of significance of the environmental claims.

The remaining sections of the code cover specific product areas which are frequently covered by legislation as well.

Section 12: Medicines, medical devices, health-related products and beauty products.

Section 13 covers weight control and slimming.

Section 14 covers financial products.

Section 15 is about food, food supplements and associated health or nutrition claims.

Section 16 covers gambling.

Section 17 is lotteries.

Section 18 is alcohol.

Section 19 covers motoring.

Section 20 is employment, homeworking schemes and business opportunities.

Section 21 is tobacco, rolling papers and filters.

Section 22 is electronic cigarettes.

Medicines: The ASA has previously issued guidance for prescription only medication and has now more recently issued guidance specifically on POGS (prescription only medication) where marketing communications concern weight loss drugs. We will look at HFSS separately in this course.

Price promotions: The general requirement is that consumers can’t be misled into thinking they are saving more than they are. There are rules to follow to calculate the “normal” price which must be applied when calculating a discount or a sale price. These are covered by legislation (DMCCA) and will be looked at in more detail.

2.2 – Legislation affecting promotions

The Gambling Act 2005 sets out what constitutes a lottery. You must not run a lottery! Lotteries require payment to enter, the award of prizes, and the allocation of the prizes by chance. Where a promotion is a game of skill, payment to enter is permitted.

Payment to Enter

Schedule 2(2) sets out that paying money for goods or services, where the prize is not increased to reflect the opportunity to participate, does NOT count as payment to enter. Schedule 2(5) sets out that standard rate post (first or second class but not special delivery)/telephone to participate is permitted provided it’s not inflated.

It used to be the case that Northern Ireland wasn’t aligned with the rest of the United Kingdom. Before 2022, although the law wasn’t enforced by the police, it was still not permitted to require purchase of a standard-priced item to participate in a prize promotion in Northern Ireland. The Betting, Gaming, Lotteries and Amusements (Amendment) Act (Northern Ireland) Act 2022 aligned Northern Ireland laws on payment to enter. Entrants from Northern Ireland no longer need to have the option of a “no purchase necessary” route to participate in a promotion that requires purchase.

ITV runs an online (or SMS, or phone entry) draw to win cash. There are charges to enter (a payment for entering online, or use of a premium SMS or phone line). There is also a postal entry route which, as it only requires the purchase of a standard-rate stamp, means that the promotion can be a lottery because the standard rate of post does not fall within “payment to enter”.

Omaze win a house promotions  – there are payment entry routes but also, at 5A2ii there’s a free entry route. The free entry route involves completing a hand-written entry and submitting by post with a maximum of one entry per envelope.

To avoid being classed as an illegal lottery, a prize promotion may select winners by chance but may NOT require payment to enter.

What if you want to charge people to enter a promotion to win prizes:

Then you may not select your winners by chance. Section 14(5)2 – The threshold to be perceived as a game of skill (and therefore NOT a lottery) is to ensure that the process of awarding any prizes by the use of skill, judgement or knowledge “cannot reasonably be expected to prevent a significant proportion of persons who participate in the arrangement of which the process forms part from receiving a prize, and the requirement cannot reasonably be expected to prevent a significant proportion of persons who wish to participate in that arrangement from doing so.”

The use of “reasonably” in the definition immediately introduces an element of subjectivity. Context is important. A question with a free-text answer (where there is only one correct answer): if the answer is written in the accompanying text, that’s not going to deter people from entering or getting the answer correct. A question about an obscure golf fact might mean many incorrect answers when in a travel magazine but might not deter the same amount of potential entrants, or result in as many incorrect responses, if it were in a golf magazine – so the same question might pass a game of skill test in one scenario but not in another.

A multiple-choice question might involve more skill (again, context will be relevant) but there must be some not completely off-the-wall options to pass the skills threshold. Both these options envisage an initial selection based on skill to weed out a significant proportion of participants, then subsequent stages on chance (to select winners from the correct responses). It’s important to retain the calculations assessing the level of skill, judgement or knowledge for awarding prizes when running a game of skill.

Still Unsure?

In the event payment is required to enter and you’re not confident the skills test has been passed – supply a free-entry route as well (and publicise the “no purchase necessary” route as much as the purchase required route).
Different types of prize promotions:

Gift

Can be physical and collected at the time of purchase or can require proof online and gift sent. The important point is that everyone who participates, can receive. Promoters must calculate an amount of gifts to provide to cover projected demand. “Subject to availability” doesn’t protect the promoter if calculations were wildly undercooked. If rewards are in store, the promoter needs to ensure the distribution to individual stores reflects potential demand in the store.

Games of Chance

These include prize draws, instant wins, golden tickets. All can be linked to purchase if required.

Prize Draws

Everyone who participates is submitted into the prize draw.  There can be one prize draw at the end of the promotion, or the draws can be split out during the promotion period.

Instant Wins

Enter online to find out immediately if and what you have won. These can be winning moments (where an amount of specific times is pre-set and the entrants on, or first after, the winning moment, is the winner). Some promotions have winning moments that are only “open” for a certain period of time. In most winning moment promotions, the winning moment is “open” until someone enters and wins.

Explanations of the “winning moment” need to be clearly made. In this case, the third step on the customer journey (top of front, bottom of front, back of pack) mentioned winning moments (and that winning moments were only “open” for 30 seconds). This was deemed too far from the participant and could be deemed to cause unnecessary disappointment.

Algorithms can be used to set the chance of winning, often by setting the number of promotional packs against the number of prizes so each entrant faces the same odds. However, these mechanics are more likely not to award the full prize pool. If promoting “Win 1 of 100”, promoters must provide enough information about the odds so consumers can properly evaluate the claim and are not misled.
Physical instant wins (e.g., golden corks or win messages inside products) identify winners directly within purchased items. If inserted at production stage, there is a risk they may not sell during the promotional period. Seeding directly into stores can reduce this risk, but fairness must be considered — sufficient decoy items should be distributed and the prize-to-decoy ratio carefully managed to reduce security risks and ensure equitable distribution.
Games of skill may involve free-text responses, photo submissions, or knowledge-based questions. Judged entries must follow CAP Code Section 8 requirements. Increasingly, promoters use knowledge-based speed mechanics to reduce judging complexity. However, the level of difficulty must genuinely discourage a significant proportion of entrants. If the audience is more knowledgeable than anticipated, the promotion may fail the legal “skill” threshold and risk being classified as a lottery.

2.3 – The UK General Data Protection Regulations 2018, and the Data Protection Act 2018

The UK General Data Protection Regulations 2018, and the Data Protection Act 2018 protect residents of the UK and impose obligations upon anyone collecting their personal data.

image-gen (2) Personal Data Processing Data Controller Data Processor

How does it work?

  • Opt-in

    It’s a requirement to positively opt-in to marketing communications by email. This may NOT be a requirement to participate in the promotion – a separate check-box for opting in to marketing communications is required, and a separate opt-in for each entity that wishes to obtain the personal data. If Brand A is running a promotion and giving away a prize supplied by Brand B, both Brand A and Brand B needs to have separate opt-ins. This is on top of the opt-in to data processing for the purposes of the promotion as set out above.

  • Transfers of personal data outside the UK

    Confirm where the data will be transferred through and stored. Some jurisdictions don’t have sufficiently high levels of data privacy compliance legislation and additional contracts or assessments need to be in place.

  • Transfers of personal data to different entities

    When considering processing personal data, brands sometimes want to share with other group entities – this needs to be clear.

  • Non-compliance with the UK GDPR

    Data controllers are responsible for their compliance and for that of their data processors. Data processors can be liable too.  Any damage as a result of processing that infringes the UK GDPR is the responsibility of the data controller – and damages or compensation can be required.

2.4 – DMCCA

The Digital Markets Competition and Consumers Act 2024 is coming into force over 2025 and 2026. Part of Chapter 4 and Schedule 20 prohibit unfair practices and specifically include aggressive or misleading advertising.

Since 4 April 2025, the Competition and Markets Authority can now directly investigate and enforce consumer laws without needing to take businesses to court – and can impose fines of up to 10% of global turnover (or £300k, whichever is the higher) for breaches of consumer protection laws. The DMCCA replaces (with slight tweaks) the Consumer Protection from Unfair Trading Regulations 2008. Most of the existing banned practices are the same but there is now a prohibition on fake reviews with a few months’ grace for supporting compliance and the ending up with the review publishers needing to proactively take steps to ensure that reviews aren’t displayed deceptively (for example, removing negative reviews or moving them to a less easily seen location), and to ensure that reviews that are posted are not fake. There’s also a wider definition of “vulnerable” and a ban on drip pricing (although this is now in a re-consulting stage).

The DMCCA covers comparative advertising and price promotions.

Comparisons with identical products

The ASA has produced guidance on reference to prices, as any ads must not mislead by claiming a false price advantage. The ASA advises marketers not to use the manufacturer’s recommended retail price as set in stone for the RRP for cost-saving calculations, unless they can demonstrate the product was actually sold at that price. RRP should generally be used for identical products sold by other retailers, as opposed to similar products.

A competitor brought a case that a manufacturer was referring to percentage savings on RRPs but with no substantiation as the products weren’t sold elsewhere. The manufacturer said its RRP calculation was based on “prices of products of similar design and specification found on the high street or sold online by high-street retailers in their sector. They said they reviewed their RRPs regularly to ensure they were in line with the market and did not mislead consumers. They provided examples of similar products on which their RRP claims were based”.

 

The ASA upheld the complaint and said consumers would understand the RRP claims couldn’t be substantiated as there were no identical products for a price comparison. The marketer should have explained how they reached the RRP.

Price promotions

RRP claims can’t be made for a product which has only just launched (and has no RRP history). If the new model is a replacement of the model to which the RRP claim was to be made, instead use “now £xx, was £xx” instead of the RRP statement.

Depending on the sector, generally available for RRP purposes can vary. Larger items, such as furniture or one-off capital purchases might have a geographical range of a nationwide stores as well as local ones.

Where products are only available in one retailer, whether nationwide or otherwise, an RPP comparison using the manufacturer’s recommended retail price and the price at one nationwide retailer was NOT sufficient to demonstrate “generally sold at £xx” or “£RRP” claims.

2.5 – HFSS

HFSS stands for High Fat, Sugar, and Salt, referring to food and drink products that fall under restrictions in the UK’s Food (Promotion and Placement) (England) Regulations 2021. HFSS is also referred to as ‘less healthy food and drink’ (Advertising (Less Healthy Food Definitions and Exemptions) Regulations 2024. Various restrictions have been planned, are in place and are currently being reviewed. The categories of foods covered are listed at Schedule 1 of the 2021 Regulations.

Restrictions under the 2021 Regulations apply to the locations where physical retail stores are over 185.8 square metres (m2); and apply to medium and large businesses (with 50 employees or more).

The restrictions don’t apply to “out of home”. It is the retailer’s responsibility to ensure compliance with correct promotion of HFSS. 185.8m2 is about the size of an “average” retail shop(!) which is large enough to have a separate entrance, multiple aisles with aisle ends and a checkout area. Smaller retailers that open on Sundays subject to the Sunday Trading Act will be included. Here’s a nutrient profiling tool which can be used to assess if an item is HFSS or not.

Restrictions on where in a physical or online store HFSS items may be displayed have been in place since October 2023. HFSS items may not be displayed within:

2m of a checkout.

On or behind a checkout.

On end-of-aisle units

50cm from an end-of-aisle unit.

Within a certain distance of the shop entrance – where the distance is calculated based on floorspace.

Island displays are permitted generally.

Online stores are not permitted to display HFSS promotions in prominent positions on the website – examples are the home page, landing pages for food categories and the shopping basket or payment pages.

ACS advice on the HFSS location and volume guidance is available but it isn’t currently in force.

The UK CAP Code currently prohibits advertisements for HFSS products in non-broadcast media directed at under 16s or where more than 25% of the audience is under the age of 16, whereas the UK BCAP Code prohibits advertisements for HFSS products in or adjacent to programmes commissioned for, principally directed at or likely to appeal particularly to audiences below the age of 16. Where non-broadcast or television advertisements for HFSS products target pre-school or primary school children, they cannot include promotions, or licensed characters or celebrities popular with children.

In addition to the location restrictions as set out above, the 2021 Regulations set out restrictions on volume price promotions which have been in force since 1 Oct 2025. Retailers covered by the 2021 Regulations may not offer a multibuy offer where there’s a financial incentive to buy more (the unit price is reduced). This can include offers of loyalty points where purchase of more than one item receives a bonus of loyalty points. Buy One Get One Free offers are not permitted on HFSS items either, neither are offers implying any part of the product is free.

Multipacks of HFSS items aren’t caught under the Regulations unless they compare the savings (5 packs for the price of 4, or 20% free), and they are treated as individual items for the purposes of BOGOF deals.

Effect of the moves towards restricting HFSS advertising has led brands to reformulate certain products to ensure that they no longer fall within the HFSS definitions. (Kellanova has reconstructed cereals and breakfast bars to fall outside the HFSS definition)

The Health and Care Act 2022 amended the Communications Act 2003 and introduced UK-wide restrictions on advertising HFSS products on TV and Ofcom-regulated on-demand programme services between 5:30am and 9pm, as well as a ban on all paid-for online advertising of HFSS products. These restrictions were initially due to become effective on 1 October 2025. The industry has committed to compliance by October as planned.

However the government is still developing the exceptions from the Regulations – to be called the Advertising (Less Healthy Food) (Brand Advertising Exemption) Regulations 2025 – so has committed to complete its review and confirmed 5 January 2026 as the start date for the restrictions (although as said the industry is aiming for compliance before). The exemptions will include pure brand advertising (i.e. the promotion of a brand where there are no HFSS products featured in the ads)

Initially the advert would be assessed against the “identifiability test”. If an advertisement might be considered by the regulator to be for an identifiable less healthy food or drink product, it would potentially be restricted. If it is not considered to be an advertisement for an identifiable less healthy food or drink product, it would not be restricted. Which would seem to exclude pure brand advertising however there’s a second stage of assessment.

Where the regulator considers that an advertisement may have the effect of leading a person to reasonably identify the advertisement as being for an HFSS item product, it will then consider whether the advertisement falls under the definition of a ‘brand advertisement’ set out in the draft regulations – which are not yet finalised.

The draft Regulations provide objective criteria for their application. A ‘brand advertisement’ is defined as an advertisement that promotes a brand, including the brand of a range of products. This only applies if the content of the advertisement does not depict a specific less healthy food or drink product or show a photographic image of a food or drink product that is visually indistinguishable from a specific less healthy food or drink product. The draft regulations make clear that the exemption is concerned with the ‘content’ of brand advertisements so that contextual factors, such as the perception of a brand or its association with less healthy food or drink products, do not form part of an advertisement’s assessment. This aligns with the policy intention that brand advertisements that do not identify a specific less healthy food or drink product are not in scope of the restrictions. The consultation ends on 6 August.  CAP and BCAP will be able to review their draft implementation guidance with a view to the restrictions coming into force from 5 January 2026.

BUT the Labour party has implied it will repeal the volume and multibuy restrictions.  and go with “smarter regulation”, with a more strict nutrient model which will cover more products than currently fall within the HFSS definition. The plan includes statements of intent to repeal the location and volume promotion restriction whilst promoting mandatory reporting requirements regarding the sales of healthier food with an ultimate requirement that brands reduce sales of less healthy foods.

2.6 – Summary

In this section, we explored the structure and application of the CAP Code alongside the key legislation that governs promotional marketing. We examined how prize mechanics must be carefully structured to avoid illegal lotteries, how data protection obligations apply whenever personal data is collected, and how evolving regulations such as the DMCCA and HFSS restrictions continue to shape marketing practice. The key message is that compliance is not a single rule to follow, but a framework of interconnected legal and regulatory requirements that must be considered at every stage of a promotion.

Learning Outcomes

Course: Private: IPM Legal Code Certification