ARCON Act and the Digital Age: Analyzing a Landmark Judgment on Social Media Advertising

WHAT HAPPENED?

Betway, a popular betting company, made some social media posts on Instagram of some of its offerings in March 2024. During a routine enforcement drive on social media, the Advertising Regulatory Council of Nigeria, ARCON, came across the Betway’s social media posts, and it issued a Violation Notice, requesting that Betway pay a fine of N1,000,000.00 [One million naira] per post for failing to secure the prior approval of the Standards Panel for the social media posts in accordance with the ARCON Act.

Betway then commenced a lawsuit against ARCON, requesting that the Federal High Court declare the provisions of the ARCON Act unconstitutional for seeking to regulate the private posts or social media posts of Betway, amongst other reliefs

The provision of the ARCON Act, in question [S.54]

“Any person including sponsor or beneficiary of an advertisement, body corporate, organisation or agency which creates or places for publication or exposure of an advertisement in any medium directed at or targeting the Nigerian market without the prior approval of Standards Panel commits an offence and is liable to such fine as stated in the Nigerian Code of Advertising Practice.”

While the Court agreed with Betway that ARCON lacked the power to impose a fine on it for breaching the provisions of the ARCON Act because an award of a fine was a judicial act, which could only be imposed by a competent court or a Tribunal upon conviction. Accordingly, the Court declared the fine as unconstitutional and void.

Finally, the Federal High Court held that ARCON had the power to regulate social media posts because it had a duty to protect Nigerian citizens from unregulated and “potentially dangerous commercial messaging.

I do not agree that ARCON is infringing on freedom of expression of the plaintiffs. Rather, I feel it is protecting Nigerian citizens from the unregulated, potentially dangerous commercial messaging. Section 45 of the Constitution validates this restriction as reasonably justifiable in a democratic society. Betting companies are not above the law, and Instagram is not a lawless space. Every promotional message directed at the Nigerian public, regardless of the medium falls within ARCON’s legitimate regulatory reach and mandate within the scope and interpretation of the ARCON Act of 2022.”

Our thoughts on the law and the judgment

The Federal High Court’s judgment on the ARCON Act has set a significant legal precedent for the regulation of advertising in Nigeria, particularly in the digital space, yet presents another critical conundrum, which may go all the way to the Supreme Court, like the Nigerian Press Council Act currently at the Supreme Court [SC/CV715/2016:  Mallam Ismaila Isa & Ors  VS   President of the Federal Republic of Nigeria & Ors] for a definitive judicial position.

1. Constitutional Validity of the ARCON Act: The court’s decision that the National Assembly has the power to legislate on advertising is a crucial finding. The court’s reasoning, that advertising is “incidental to, connected with, or associated with Trade and Commerce” under Item 62 of the exclusive legislative list, is a strong legal argument. This links the regulation of advertising directly to a constitutional power of the federal government. The reference to the case of Yabatech v. M.C.d Ltd further strengthens this position, by demonstrating that federal legislative authority over advertising, even on physical infrastructure like highways, has a precedent. This confirms that the National Assembly has the legal basis to create a comprehensive regulatory framework for advertising, irrespective of the medium.
2. Regulation of Social Media Posts: The court’s holding that ARCON has the power to regulate social media posts is a direct response to the evolving nature of advertising. By asserting that “every promotional message directed at the Nigerian public, regardless of the medium falls within ARCON’s legitimate regulatory reach,” the court effectively brings digital advertising under the same level of scrutiny as traditional media. This aligns with the stated purpose of protecting citizens from unregulated and potentially dangerous commercial messaging. The judgment validates ARCON’s mandate to ensure ethical and responsible advertising in an age where social media platforms are a primary source of information and commercial influence.
3. The “Fine” vs. “Judicial Act” Distinction: This is a key point where the court sided with the plaintiffs. The court’s ruling that ARCON cannot directly impose a fine is a crucial check on the agency’s power. It upholds the principle of the separation of powers and ensures that the power to levy a punitive fine—a judicial act—remains with a competent court or a specially constituted tribunal. This prevents ARCON from acting as both the judge, jury and executioner, thereby protecting the rights of individuals and companies.
4. The Flawed Definition of “Private” vs. “Public” Posts: The court’s attempt to distinguish between “private” and “public” social media posts is problematic. The judgment suggests that a post is public if it is not set to private, allowing anyone (including ARCON) to view it. This interpretation is legally and technologically simplistic. A post’s visibility setting on a platform like Instagram is not the only factor that determines its public or private nature. A post can be viewable by the public, but its content and intent may not be commercial or promotional. Furthermore, the court’s reliance on the fact that ARCON could view the posts as proof of their “public” nature is a circular argument. A more robust legal definition is needed to differentiate between genuine commercial advertising and personal, non-commercial content, regardless of the user’s privacy settings. The court’s definition risks over-regulation of non-commercial content.

Our take:

We propose the following positions and recommendations:

On Regulating Adverts in the Public Space:

We fully support the court’s and ARCON’s position on the necessity of regulating adverts in the public space. Public-facing commercial communications, by their nature, are designed to influence consumer behavior and must be subject to a regulatory framework. This is essential for:

• Consumer Protection: It is the government’s duty to protect citizens from misleading, fraudulent, or harmful advertising. This is particularly critical in the context of betting and other potentially addictive or risky products.
• Ethical Advertising: Regulation ensures a level playing field and promotes ethical standards within the industry, preventing unfair practices and ensuring that commercial messages are truthful and honest.
• National Interest: As the court rightly noted, advertising and marketing are incidental to trade and commerce. Regulating this space allows the government to foster a healthy, competitive, and secure economic environment.

Emphasis on the Protection of Citizens from Misleading AI Adverts:

We reflect on our article on Ai advertising, and opine that the rise of artificial intelligence presents a new and significant challenge to advertising regulation. AI can generate highly persuasive, personalised, and even deep-fake content that blurs the line between reality and commercial messaging. This portends a heightened risk of misinformation and manipulation. The court’s position on protecting citizens from “unregulated, potentially dangerous commercial messaging” is especially relevant here and leans into our recommendations in our article. We must emphasise the need for ARCON’s mandate to explicitly include the vetting of AI-generated advertising content to:

• Prevent Deepfake Fraud: to ensure that AI-generated imagery or videos used in advertising are clearly identifiable as such and do not mislead consumers into believing they are real endorsements from individuals or entities.
• Combat Algorithmic Bias:  from creating discriminatory or predatory advertising that targets vulnerable populations with misleading or harmful offers.
• Maintain Truthfulness: to guarantee to some extent that claims made in AI-generated adverts are truthful, verifiable, and not based on fabricated data or deceptive narratives.

Recommendations for the Vetting Process:

1. A formal application addressed to the Director General of the Advertising Regulatory Council of Nigeria (ARCON), ARCON House, National Theatre Annexe, Iganmu, Lagos.

2. A duly completed Standards Panel Form 001, which must be signed by a registered advertising practitioner not below the rank of an Associate Member.

3. Where advertisements relate to food, beverages, drugs, or other products requiring the approval of NAFDAC, a Certificate or evidence of approval from NAFDAC must be attached.

4. A letter of authorization from the Advertiser authorising agency/organisation to apply for vetting.

5. A copy of the material concept/version proposed to be advertised (television, radio, press, outdoor, poster, banner, flier, truck back, vehicle branding, tricycle branding, lamp pole, squeeze back, LED Board, online, digital, web-based, etc).

6. For commercials on motion pictures, the Applicant may be required to submit a clearly printed Commercial Script or Story Board (in coloured) for approval before production.

While we agree with the need for vetting, the process should not be a bureaucratic impediment to business as shown above. We recommend that the vetting process be re-engineered to be:

• Fast and Efficient: The current model of “prior approval” can stifle the agility required for digital marketing. A fast-track system is essential. This can be achieved through a digital portal with an automated or semi-automated review process for low-risk advertisements, allowing for approval within minutes. More complex or sensitive campaigns would then be directed for manual review.
• Transparent and Standardized: ARCON should publish clear, comprehensive, and objective guidelines for what constitutes compliant advertising. This will allow businesses to self-regulate and submit materials that are likely to be approved, reducing the need for multiple revisions. The fee structure should also be transparent and reflective of the administrative costs, rather than serving as a barrier to entry.

Defining “Public” vs. “Private” Posts:

The court’s definition of “public” and “private” posts based on visibility settings is impractical. A more effective and legally sound definition would be based on the intent and nature of the post, not just who can see it.

We propose that a “public post” for the purpose of ARCON regulation should be defined as:

“Any post, communication, or content, irrespective of its medium or platform, made by a business, organization, or individual with the primary objective of promoting, soliciting, or selling a product, service, or idea for commercial gain, and which is exposed or directed at the Nigerian market.”

This definition shifts the focus from the technical setting of a social media account to the core function of the communication itself. It would apply to:

• Posts made by a company’s official account.
• Sponsored content or paid partnerships by influencers.
• Any post, regardless of who makes it, that clearly and explicitly serves a commercial purpose, such as announcing a product launch, a sale, or a promotional offer.

This approach would prevent the overreach of regulation into genuinely private, non-commercial content while ensuring that all commercial messaging directed at the Nigerian public, which is truly in the public space for commercial purposes, is properly managed. This new definition would provide a clearer and more practical basis for ARCON’s enforcement and would align with the spirit of protecting citizens from commercial messaging, not personal expression.