Unfair Word-of-Mouth Marketing Can Put You In Jail
The European Union (EU) Unfair Commercial Practices Directive (UCPD) was adopted three years ago. On May 26, 2008, the United Kingdom’s Department for Business Enterprise and Regulatory Reform (BERR) is implementing this directive through Consumer Protection from Unfair Trading Regulations.
If you’re doing word-of-mouth marketing, you should be concerned with the directive and the regulations promulgated to enforce it.
Why?
Your new duties include not to treat consumers “unfairly.” And if you do treat them unfairly, you can end up paying fines or even going to prison.
Here’s one unfair practice that is going to land many Internet marketers in hot water:
“Falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer.”
Do you think that creating consumer review sites without disclosing affiliate status will be considered unfair under this provision? I do.
Here’s another one.
“the commercial practice fails to identify its commercial intent, unless this is already apparent from the context”
How many e-mails sent to Internet marketing lists would violate this provision? Every day, you get swamped with affiliate e-mails piking the latest guru product or service but never disclosing that the recommendations are made at least in part because of the affiliate commissions the sender hopes to receive.
You might think that you have nothing to worry about because you don’t live in the United Kingdom.
However, do any of the consumers who visit your website live there? What about those on your e-mail list? Chances are you’ve got United Kingdom visitors who are protected by these new regulations. And more importantly, you have no idea whether you’ll be prosecuted for violating the law.
You can also expect the U.S. Congress and the Federal Trade Commission (FTC) within the next few years to create new laws and implement similar regulations as part of cleaning up Internet marketing under the guise of protecting consumers.
You can learn more about the United Kingdom regulations by reading the Draft Statutory Instrument: Consumer Protection from Unfair Trading Regulations 2008.
About the Author
With an advanced international law degree from Georgetown University and more than 14 years of real world legal experience, Attorney Mike Young shows entrepreneurs how to protect and grow their businesses online. He's the author of "Internet Marketing
Legal Secrets Revealed," "How to Create Your Own Internet Business Without a Lawyer for Under $175," and the creator of Website
Legal Forms GeneratorTM. Not just a lawyer who focuses exclusively on Internet and marketing law, Mike’s been working with computers for more than 27 years (his first computer was an Atari 400 with 8 KiB RAM) and started representing Internet businesses back in 1996.
Chris | May 12, 2008 | Reply
Just how does the UK expect to enforce this against people outside its jurisdiction?
““the commercial practice fails to identify its commercial intent, unless this is already apparent from the context”
With most email from affiliates the context IS apparent. You’re offering something for sale, so it should be assumed you stand to make money from that, just like when stores run ads.
I would think “unfair” would be something like stating you don’t earn commissions when you do.
What next?
Mike Young | May 12, 2008 | Reply
Chris,
That’s a good question. First, we don’t know know the scope of enforcement. At a minimum, probably all EU member states.
Second, if enforcement is sought beyond the UK’s borders, it will probably be per treaty or other agreement entered into between the UK and other countries. This is a common practice.
Best wishes,
-Mike