Marketing and Advertising Law
Marketing and advertising laws do apply! And the Federal Trade Commission (FTC) does a comprehensive job of ensuring the country's companies -- and any brand that advertises to U.S. citizens -- follow the rules.
The Federal Trade Commission (FTC) is the country's primary advertising and marketing regulator. State attorneys general can also file promotional violation claims.
Truth-in-advertising principles, primarily codified in Section 5 of the FTC Act, are the core of U.S. promotional guidelines. Advertisers are also confined to intellectual property, competition,
trade libel, and decency laws.
23 Marketing and Advertising "DON'Ts"
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- » Don't be careless with user data. Comply with privacy parameters outlined in the Children's Online Privacy Protection Act, Consumer Review Fairness Act, Gramm-Leach-Bliley Act, Fair Credit Reporting Act, Health Insurance
Portability and Accountability Ac, and Restore Online Shopper's Confidence Act.
- » Do not make false claims.
- » Don't make unsubstantiated claims -- especially scientific ones (i.e., "this product will cure/reduce [insert disease or condition]!).
- » Comply with the Nutrition Labeling and Education Act and the Dietary Supplement Health and Education Act.
- » Don't frame atypical product results as typical.
- » Don't use fake news or phony review sites to promote products or services.
- » Don't pay for online reviews or use contract gag clauses in an attempt to prevent negative reviews.
- » Don't use negative-option tactics that to trick people into signing up for recurring billing scams without sufficient warning.
- » Don't make advertisements look like content.
- » Don't give away or sell customer data in exchange for material compensation without first securing permission.
- » Don't charge credit cards without getting billing addresses.
- » Don't send advertorial text messages without advanced permission. (Comply with the Can-SPAM and TCPA Acts.)
- » Don't forget to disclose material relationships in advertisements and promotional materials.
- » Don't use pop-up disclosures that can be blocked by ad-blocker software.
- » Don't hide text disclosures or links to disclosures.
- » Don't forget to use #paid, #ad, #spon hashtags when promoting on social media.
- » Don't let incentivized reviewers not disclose their status. (NOTE: Amazon changed its rules; incentivized reviews are no longer allowed on the platform.)
- » Don't let affiliate marketers that are pushing your brand use underhanded tactics -- you are responsible for affiliates that promote your products and services.
- » Don't start a multi-level marketing scheme.
- » Don't abandon a crowdsourced project, and then fail to make amends with investors.
- » Don't use price anchoring tactics (i.e., advertise an inflated original sales price to give the impression of a deal).
- » Don't neglect your website's security; in some cases, the FTC can fine businesses for getting hacked.
FTC Marketing Rules: News and Views
The FTC let Zuck Off the Hook
After the 16-month investigation, the FTC and Facebook have reached a $5-billion-dollar deal. Interestingly, the FTC decided not to blame Zuckerberg.
SEC is Scrutinizing Crypto MLM Companies
The SEC accused a crypto-backed, multi-level-marketing company of absconding with millions of dollars. Jump in to learn more about this case.
Is it legal to Buy Fake "Likes"?
Is it illegal to buy fake likes? The answer now is "yes," and Facebook is suing a company for engaging in the practice. Click for "like" legalities.
Can You Be Sued For “Fictitious Pricing”
E-commerce Law Topic: Can you be sued for keeping an item on sale permanently. Believe it or not, you can! And it happens more than you think.
FTC Negative Option Lawsuits: Example Case
The FTC regularly files legal actions against companies that use negative option checkout procedures to enroll people in recurring billing unwittingly.
The Legal Low Down on Paid Reviews
As e-commerce booms, the paid, fake review business is also booming. Jump in for a legal overview of online reviews. What is legal and what isn't?