FROM THE ARCHIVE: Lessons in regulation from ASA

From New Power in September 2019:
This week The Advertising Standards Authority took a good look at claims that smart meters have environmental benefits. In response to complaints, it considered whether Smart Energy GB could stand up claims thata smart meter “helps build a smart grid for a greener future, as well as letting you track and reduce your energy.”

It investigated whether ”Smart meters don’t solve climate change on their own. But with the smarter, more efficient energy grid they help to create, they’re a start” among other claims. Did the ads gave a misleading impression of the environmental benefits of smart meters? No, said the ASA. The complains were not upheld.

In July, the ASA came down firmly on the side of Friends of the Earth, when the pressure group claimed on its website that “Fracking is incompatible with tackling climate change” and “Fracking risks contaminating groundwater”. In a lengthy examination of the issue, the ASA considered the views of the Climate Change Committee, and saw that the CCC thought the government had not met tests for making fracking climate-compliant. The ASA also decided that it was not misleading to claim there was a risk that fracking could contaminate groundwater and that groundwater could end up being used as drinking water. It had examined experience in the USA and how that differed from the UK situation.

In contrast, this week the ASA stopped supplier Outfox the Market from claiming it was the cheapest supplier. The ASA highlighted the shortcomings of price comparison websites, saying, “… energy providers who did not subscribe to or might chose not to be included in price comparison websites and, therefore, the evidence provided might not represent a full comparison of all energy providers in the UK… we considered that listings from comparison sites would be unlikely to constitute robust, comparative and representative data relevant to all consumers, as required to support absolute, whole market claims.”

There are more – see links below.

The ASA is not the energy regulator. But I am starting to wish it was. Energy company price claims,whether consumers really understand price comparison sites’ limitations, whether fracking could cause contamination – all these are real, important issues in the sector. They are not being addressed by the energy regulator. You have to wonder, in the debate over the future of regulation in utilities, whether the net should be spread a little wider. The regulator tends to dismiss suggestions that consumer regulation could be effective in a sector as ‘difficult’ as energy. The ASA seems to be answering that question.

Meanwhile, Ofgem and the CMA might pick up a hint: what are the limitations of price comparison websites?


Further reading

Outfox the Market told to moderate advertising claims – comparison sites ‘not proof’

Advertising watchdog dismisses challenge over Friends of the Earth claims on fracking’s climate and water fears

Not a watchdog

Public Accounts Committee: sector regulators are failing consumers

Is it time to re-examine the regulatory model?

BT Solar Ltd censured over misleading ad

E.On has to withdraw ’70-year history’ advert