Liability without Borders:
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Many people joke that there ought to be a law against running so many commercials during their favorite TV show; the fact is that there are many laws, regulations, and self-regulatory policies governing the content, presentation, and target for advertising. In the U.S., most advertising is governed by the Federal Trade Commission, state legislation, attorneys general, and the courts. Advertiser-supported self-control groups include the National Advertising Division of the Council of Better Business Bureaus or the NAD, whose procedures can be found online at www.bbb.org/advertising/nadproc.html. Most advertisers and media outlets are aware of these bodies and their standards, and probably have internal guidelines to comply with the relevant standards bodies. Unfortunately for companies that have until now been U.S. only, and have crafted their advertising accordingly, the Internet once again poses new and perhaps serious challenges. It opens the possibility that authorities all over the world will review and prosecute based upon advertising placed within a Web site. Remember that prohibitions on false or misleading advertising and other advertising-related laws, like many other consumer-protection efforts, are usually local, since the crime is deemed to occur where the victims are. As a result, prosecutors and legislators from Munich to Minsk could decide that your advertisement is illegal under local laws, and seek to penalize you for it. What kind of advertising can run afoul of foreign law? Here are a few general examples: -Comparative advertising of your products versus other named products is illegal in a number of countries, and sharply limited in others; -For heavily regulated products and services from insurance to pharmaceuticals, you can anticipate disclosure requirements, limitations on claims, prohibitions on the sale of certain products, and similar issues; -Laws, especially those related to intellectual property, and local artists’ guild regulations can affect which photos, videos, and sounds are permissible in advertising, and whether compensation is due the artist, publisher, or talent for the use. Obviously, if you put a banner ad or a reproduction of a print or broadcast advertisement on your Web site, advertising regulation will come into play. But advertising is in the eye of the beholder. Even if you have nothing you’d recognize as an ad on your site, the mere fact that you have created the site for your company might make it a very large ad in the opinion of a local law-enforcement or artists’-guild official. Either way, researching and navigating foreign jurisdictions’ advertising laws can be costly and time-consuming. Is it likely you’ll unintentionally violate foreign law? If your business is entirely local, and you will never solicit or accept either suppliers or customers or establish offices outside the U.S, the power of foreign regulators is probably limited. Of course, criminal activity could subject you to an extradition effort, but few advertisements rise to that level. On the other hand, if you are international, or foresee establishing strong international ties in the future, you must pay attention to issues such as foreign advertising law. Your Web site could cause legal complications for your company, one of your affiliates, or customers. What can you do to prevent international advertising-related problems? To some extent, the best approach is a conservative one, both in the elements you include in your Web site and the claims that you make within it. You may leave in a controversial element because you believe your target audience will respond positively, but make an informed decision. |