In this article, Dr Maria Anassutzi, intellectual property expert, discusses the potential legal pitfalls of marketing (both online and offline) and gives some helpful tips on what to do to stay legal.
Marketing is one single word that has many different meanings. It means creating a valuable brand, creating goodwill and, of course, advertising. How a business can conduct marketing varies. It depends on the budget, the industry of the company. Generally speaking, it is recognised that nowadays, marketing activities will include social media activity and online or web marketing.
Although social media and online advertising activities have several advantages, such as minimum or no cost, a great audience and reaching a potential even greater market, if something goes wrong, the negative consequences could be as wide and far-reaching, including (i) bad publicity, loss of reputation and brand damage; (ii) scrutiny and possible sanctions from regulatory bodies, such as the Advertising Standards Authority and the Office of Fair Trading (iii) legal action by competitors or consumers (iv) costly recall of advertising material (and products)l and reprinting of advertising, wasted media space and ultimately (v) disappointed consumers and loss of consumer confidence in the organisation.
The main legislation relating to advertising is the Consumer Protection from Unfair Trading Regulations 2008, which are enforced by trading standards authorities and the Office of Communications for television and radio advertising. The regulations prohibit unfair and misleading commercial practices generally, including advertising. So attention must be exercise when claims are made regarding (i) the existence, nature or characteristics of the product (ii) the extent of the trader’s commitments, their motives, sales process and any statements or symbols used for sponsorship or approval of the product including ambush marketing, (iii) the price (including how it is set) (iv) the status and qualifications, (v) the consumer’s rights.
Generally speaking, advertising must be legal, decent, honest and truthful. It is imperative to avoid causing offence on race, religion, sex, sexual orientation and disability.
If you are advertising online, you may need to consider the Electronic Commerce (EC Directive) Regulations 2002 and the Consumer Protection (Distance Selling) Regulations 2000. These impose information requirements on those trading, including distributing content online and via SMS and provide cancellation rights for orders made at a distance. More information on direct marketing. Note also that the Advertising Standards Authority’s remit from 1 March 2011 was extended with effect to cover organisations’ own website content and to marketing on social networking sites.
Online advertisers in Europe do not have free rein about their own websites’ content or arrangement. Certain details concerning the business or the relevant product or service must be provided on the site in an easily accessible manner. These information obligations range from identification data to consumer protection requirements. Identification obligations may apply to both websites and e-mails. In most countries, general company legislation will be applied by analogy to companies operating in an online environment. However, some countries such as France have specifically imposed information requirements on online communications.
Besides, if you advertise via social media areas, you will need to consider the law relating to contract, passing off, trademark and copyright infringement, defamation and malicious falsehood. You can read more about the legal and intellectual property pitfalls of social media here. Similarly, employees’ use of social media can also be dangerous, as the UK Facebook case has proven.
You can find more guidance and information on social media here.
Therefore, it is important to ensure that you take advice regarding intellectual property rights, that your advertising proposition is based on what your product actually offers and that your advertising is not misleading. In an online context, it is important to remember that a website can usually be accessed from all over the world. The laws and regulations of non-domestic jurisdictions may also apply.
Here are some practical steps to consider:
· Advertising misleads potential customers about the true nature of the product or offer.
· Denigrating competitors unfairly – for example, criticising a competitor without good reason.
· Unfair comparisons – make sure you compare like with like.
· Pricing errors.
· Infringing other traders’ intellectual property rights – for example, using a competitor’s trademark.
· Offending decency.
· Producing advertising which is inappropriate for children to see.
Watch out for “greenwashing”. Many advertisers are keen to promote their eco-friendly credentials, especially in the light of the new duty for directors to consider the impact of their company’s operations on the community and the environment when promoting that company.
This article is for general purposes and guidance only and do not constitute legal or professional advice.