FC Barcelona has been rapped by the UK’s ad watchdog after a paid for Google search result advertising a non-fungible token for the club being sold at Sotheby’s was deemed misleading.
The Advertising Standards Authority (ASA) ruled that the July 2022 ad omitted material information surrounding the risks of investment into NFTs and that they were an unregulated cryptoasset.
The ad, featuring the text, “The first NFT Masterpiece of FC Barcelona. Premiere July 29th. Johan Cruyff’s “impossible goal” in 1973. Immortalised and offered as an exclusive NFT”, received a complaint for not making clear the risks associated with NFTs, or that fees and taxes applied.
It also did not highlight the restrictions on ownership rights, the complainant alleged.
NFTs “not financial products”
The football club argued that NFTs were not financial products and so not defined as restricted activities by the UK’s Financial Conduct Authority.
It said that the NFT in question was being offered as a collectible rather than an investment, and that all risks regarding the NFT – including premiums and limits to ownership rights – were outlined in the auction house’s sale conditions. The club’s website also ran further explanations around the ownership rights of the NFT.
The ASA noted FC Barcelona’s comments that the NFT was a collectible and not a financial product, but noted that even if not marketed as such, NFTs can be bought, held and sold as an investment, and that their value can go down as well as up.
It said: “For some consumers the primary motivation might be to collect NFTs that fulfilled their personal interests. Consumers might also purchase NFTs to fulfil both personal interests and to acquire something that had a store of value that they hoped would hold or increase in value over time and for other consumers the motivation might be purely to acquire NFTs as an investment opportunity.
“For many consumers the motivation to purchase an NFT would fulfil a number of these aims at the same time.”
The watchdog added that NFTs were an unregulated cryptoasset with complexities and risks, that required their owners to open and maintain a cryptowallet. It judged that this was material information that consumers would want to know.
Google ads “not the correct medium for promoting NFTs”
The ASA noted that buying the NFT meant consumers were subject to paying Sotheby’s a buyer’s premium, sales tax, an overhead premium and a gas free to transfer the NFT to a digital wallet. The NFT’s “owner” also had no intellectual property rights for the image. FC Barcelona also told the ASA that the ad itself only ran for just over a week and has not been shown since. Character restrictions of Google ads meant it showed the minimum information possible, and FC Barcelona argued that it could see how any further information could be included.
“While we acknowledged Barcelona’s comment that paid for Google ads did not contain sufficient space to include the requisite warnings, we understood that if such ads did not have the necessary space then they were not the correct medium for promoting this particular NFT,” it said.