Competitor lawsuits and advertising complaints are hardly ever good for business, especially if the legal battle is between a small company and a major industry player.
(Also read our article: Ellies CEO says Wonderplug accusations 'a baseless smear campaign')
The Advertising Standards Authority of South Africa (ASASA) charges a flat fee for all competitor appeals, irrespective of the size or turnover of an organisation.
Lindsay from Somerset West, who owns a local business supplying IV sets to the medical sector, says he cannot afford to defend himself against an international company that recently lodged a complaint against his business.
To lodge an appeal will cost an upfront fee of R90 000 and ASASA, a self-regulatory association, says it relies on industry guidelines to set the functions and fees of the complaints.
According to ASASA CEO, Thembi Msibi, the appeal expenses cover services including legal representation and skilled industry adjudicators.
Unfortunately somebody has to pay for the fee; small companies and big corporations alike all have to pay the same amount. This was decided by the industry.— Thembi Msibi, ASASA CEO
Some small businesses may struggle to defend themselves as the costs of lodging an appeal are too high.
Listen to the full conversation from CapeTalk's Breakfast with Kieno Kammies: