Legal & Ethical Issues   

INTERNET ADVERTISING & PROMO COMM

CLASS 11

INTERNET ADVERTISING & PROMO COMM

CLASS 11

Featuring Today …. 

• Spamming

• Consumer Privacy

• Deceptive & Offensive Advertising• Copy Right Issues

Spamming (Junk or unsolicited commercial e-mail)

• “indiscriminately sending large amount of unsolicited e-mail meant to promote a product or services” 

• various industry guidelines (such as the one by IAB), and statewide regulation failed to curve the use of e-mail spamming

• The effectiveness of the federal regulation, for the most part, remains to be seen.

 • In early 2000s, spamming became outlawed in

over 30 states in the US • US Federal spamming law -- Reduction in

Distribution of Spam Act of 2003; Can-Spam Act of 2004

• No global regulation is available• To summarize statewide anti-spam laws in the

past;

– Subject lines should begin with”ADV” and “ADV:ADLT” for adult content

– A toll-free telephone number or a valid return address is required so that recipients can opt out

Statewide anti-spam laws (continued)

– some states proposed no-spam registry (a list of people who do register not to receive unsolicited email); unsolicited senders are required to update their lists within 30 days of the start of every calendar year 

– In California, it is unlawful to send unsolicited e-mail ads without opt-in or a verifiable business relationship  

– consumers/individuals are granted appropriate right of action.

Federal legislation: Reduction in Distribution of Spam Act, 2003

• requires e-mail marketers to disclose their online and physical addresses,

• bans them from using false or misleading header

information,

• requires them to label pornographic e-mail as such,

• requires them to comply with consumer requests to be removed from mailing lists.

Federal legislation: Reduction in Distribution of Spam Act of 2003

• prohibits them from harvesting e-mail addresses from sources that promise not to resell customer information.

• does not permit lawsuits to be brought by individuals or through class action suits.

• allows marketers to evade provisions if they have a “commercial relationship” with consumers.

Federal legislation: Can-Spam Act of 2004

(Controlling the Assault of Non-Solicited Pornography and Marketing Act)

• Bans false or misleading header information (from, to, routing-domain, email address)

• Prohibits deceptive subject lines • Requires that your email give recipients an opt-out

method• Requires that commercial email be identified as an

advertisement and include the sender’s valid physical postal address

• Penalties: fines up to $11,000; subject to deceptive advertising laws

Federal legislation: Can-Spam Act of 2004 (continues..)

• Additional fines to commercial emailers that – Harvest email addresses from Web sites or Web

services where such a practice is prohibited– Generate email addresses using a “dictionary

attack”– Relay emails through a computer or network

without permissionEtc.– Read more about this at

http://www.ftc.gov/bcp/conline/pubs/buspubs/canspam.htm

Federal legislation:

Did it work? – Read more about legal issues at

cnet.com or at other online sources

Problems & Challenges in Regulating Spam

Jurisdiction Problems:

• Who has the jurisdiction over spammers if they come from outside a country?

• Obtaining jurisdiction over them for enforcement of

the law will be difficult, if not impossible. • Global nature of the medium calls for global scale

solution to this problem.

 

Implementation Challenges:

• Will spammers actually abide by the law? Who will detect these spammers?

• How effective would the Fed law be? • Does the fed government have enough resources to do

any more enforcement than are being done now? • Reduction in Distribution of Spam Act allows marketers

to evade provisions if they have a “commercial relationship” with consumers. How do we define “having a commercial relationship”?

Problems & Challenges in Regulating Spam

Some Thoughts about Possible Solutions 

• Close open relay system worldwideOpen relays allow third parties to route their e-

mail through servers of other organizations in order to disguise the real origin of the e-mail.

• Concerted efforts are necessary to develop technical solutions

• Develop global measurese.g., International Consumer Protection

Enforcement Act (ICPEA)

Wireless SpamThe September 2000 guidelines by the Wireless

Advertising Association (WAA) 

• Wireless spam -any content sent by or on behalf of advertisers and marketers to a wireless mobile device at a time other than when the subscriber initiates a request

• Do not send wireless push advertising or spam without explicit subscriber permission (opt-in)

• Confirmed opt-in required• Subscriber permission (opt-in) is not transferable to

third parties without explicit permission from the subscriber

• Clear instructions to unsubscribe (opt-out) must be made readily available and be honored

Consumer Privacy

• To date, most of the regulation from the US federal government concerns consumer privacy

• Consumer Internet Privacy Protection Act of 2000 makes it illegal to make public personal information without written consent

• Online Privacy Protection Act of 2001websites are required to give a ‘clear and

conspicuous’ privacy policy

• Children’s Online Privacy Act: (COPPA) of 2000:protects children’s privacy by giving parents the

tools to control what information is collected from their children online

Under the COPPA,  

operators of commercial websites and online services directed to or knowingly collecting personal information from children under 13 must

• notify parents of their information practices; • obtain verifiable parental consent before collecting a

child’s personal information; • give parents a choice as to whether their child’s

information will be disclosed to third parties; • provide parents access to their child’s information;• let parents prevent further use of collected information;• not require a child to provide more information.

Penalties of Non-Compliance: 

• orders to cease and desist, with fines up to $11,000 per violation

• injunctions by federal district courts

• in some instances, refunds to consumers for actual damages in civil lawsuits

Deceptive and Misleading and Offensive Claims:

Read article at www.ftc.gov/bcp/conline/pubs/buspubs/dotcom/index.shtm for

more specific information on US’s rules & guides on this topic  

 Advertising

a) must tell the truth and not mislead consumers,

b) claims must be substantiated

• To ensure the truth in advertising, IAB recommends:– Disclaimers and disclosures must be clear and

conspicuous and positioned prominently – Demonstration of the product should be under normal

use. – Refunds must be made to dissatisfied consumers, if

promised

• For the requirement of substantiated ad claims, – Advertising agencies or website designers and

catalog marketers are responsible for reviewing the information used to substantiate ad claims

Examples of Online Advertising Deception 

Case #1:• Mars candy bars, a pop-up ad with “Chocollect”

promotion on August 2003• “Collect codes for 3,000,000 rewards” … “70

wrappers = Xbox” But the actual reward was %-off of the Xbox price

• The verdict by the UK’s non-broadcast regulator, the Advertising Standard Authority (ASA):

• Your verdict??

 

Case #2:• Dinseyland.com for Disneyland.com, September 4,

2003• Truth in Domain Names Act of 2003: makes it a crime

to use a misleading Web address to direct children to pornographic Internet sites

• Domain names that slightly transposed well known commercial site names are deceptive and illegal

Examples of Online Advertising Deception 

Case #3:

• “FCUK Safely” • Violation of British Code of Advertising, Sales Promotion &

Direct Marketing (the CAP Code)

Case #4:

• 100 percent college funding promised for a fee of $895; but scholarship information delivered

 

Examples of Online Advertising Deception 

Copyright Issues

• What is acceptable use? Viewing pages vs. completely unlimited?

• Difficult area – debates over copyright infringement vs. acceptable use of online material (information and artwork) still continue

• Public posting of private e-mail messages is generally seen as absolutely inappropriate anywhere

• Ask the site administrator if you are in doubt• To protect your material, make it password-protected

A Few Thoughts on Internet Advertising Ethics

 

• The long term cost of damage to a brand’s reputation may be much greater than the immediate, short-term gain obtained from an irresponsible, unethical advertising and marketing communication practice 

• Abiding by laws and industry-wide guidelines concerning the proper use of the Internet as advertising and marketing communication tool is critical to ensure that this valuable new marketing channel remains viable

Resources:

• To be kept up to date on the status of pending legislation, visit http://thomas.loc.gov, www.iab.net or http://www.access.gpo.gov/nara/cfr/cfrhtml_00/Title_16/16cfrv1_00.html

• To file online fraud complaints, go to the Internet Fraud Complaint Center (IFCC)

• To learn more about the FTC efforts in the International Consumer Protection Enforcement Act (ICPEA)

• For general offers and claims, products, and services protecting consumer’s privacy online and laws enforced by the FTC, visit http://www.ftc.gov/bcp/conline/pubs/buspubs/ruleroad.htm

Resources:

• To lean more about children's advertising, refer to the guidelines published by The Children's Advertising Review Unit (CARU) of the Council of Better Business Bureaus

• For more information on this act and other Children’s Privacy issues, visit www.ftc.gov/privacy/privacyinitiatives/childrens.html and www.ftc.gov/kidzprivacy