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 ) “indiscriminately sending large amount of unsolicited 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 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 ); 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 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 marketers to disclose their online and physical addresses, bans them from using false or misleading header information, requires them to label pornographic 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 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, address) Prohibits deceptive subject lines Requires that your give recipients an opt-out method Requires that commercial 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 ers that –Harvest addresses from Web sites or Web services where such a practice is prohibited –Generate addresses using a “dictionary attack” –Relay s through a computer or network without permission Etc. –Read more about this at spam.htm spam.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 worldwide Open relays allow third parties to route their through servers of other organizations in order to disguise the real origin of the . Concerted efforts are necessary to develop technical solutions Develop global measures e.g., International Consumer Protection Enforcement Act (ICPEA)

Wireless Spam The 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 2001 websites 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 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 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 or 00.html 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

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 and