Internet Advertising Law

Increased Internet commercialization has fostered the growth of advertisements and commercial sponsorship on the Web.  In a typical online advertising arrangement, the advertiser or sponsor pays the Web site owner to display its business name and/or logo on the site, and provide a direct link to the advertiser or sponsor.  Advertisers and sponsors typically target Web sites that relate to the areas of interest most similar to the advertiser’s or sponsor’s line of business or particular industry.

Federal Trade Commission

The primary agency responsible for controlling deceptive ads is the Federal Trade Commission (FTC).  The agency works to regulate unfair competition and protect consumers.  An advertisement or business practice will be deemed unfair if it is injurious to consumers, if it violates public policy or if it is considered to be unethical.  In weighing whether or not an advertisement should be considered deceptive, the FTC will consider whether the ad contains any representation, omission, or practice likely to be misleading to consumers, how a consumer under the particular circumstances is likely to interpret an advertisement and the depth of the ad’s deception.

False Advertising and State Law

Each of the states has consumer protection laws in place to safeguard against unfair and deceptive business practices.  These state laws may be used by consumers who are the victims of false advertising to recover damages, or alternatively, they may be enforced by state attorneys general.

Email Marketing and “Spam”

The term “Spam” refers to the sending of unsolicited commercial email (UCE) that may or may not constitute an unlawful business practice.  When conducted properly, UCE may be perfectly legal.  the CAN-SPAM Act of 2003 forbids the harvesting of emails, demands commercial emails be labeled advertisements, requires an opt-out provision, requires a return email address as well as a host of other requirements that must be complied with in order to ensure no legal enforcement action will be undertaken by the FTC, state attorneys general and/or Internet Service Providers.  If you are involved in email marketing, you need effective counsel to guide your business and help make sure you always remain on the right side of the law.

Behavioral Marketing

Behavioral marketing is a marketing practice that targets consumers by tracking their behavior and movements online.  The FTC has disclosed guidelines concerning behavioral marketing that suggest: i) companies should require consumer’s consent before using data in way different from that promised when it was obtained; ii) every Web site where data is collected for behavioral advertising should provide a statement that data is being collected for behavioral marketing purposes and giving users an choice whether or not to have their information collected; iii) companies should only collect sensitive data if they get content to receive such advertising; and iv) any company collecting or storing data for behavioral advertising should ensure its security retention only for so long as necessary to fulfill a business need.

Hypertext Links

Whether you are a Web site owner or the advertiser or sponsor you must ensure that the hypertext links from the Web site to the advertiser’s or sponsor’s own page are intact.  If you are an advertiser or sponsor you need to make sure that the link is functioning properly and ensure that the Web site owner will update it immediately upon notice of any change in your URL.  You will also want to ensure the link will be accessible from text messages and graphics.

If you are the Web site owner, you must ensure the advertiser’s or sponsor’s links will not give rise to any third party liability claims and that the advertiser or sponsor will inform you immediately of any changes so that you do not end up carrying any dead links that could diminish the credibility of your Web site.

Intellectual Property

If you are an advertiser or sponsor you must specify the extent of the rights the Web site owner will have to use your trademarks on the Web and ensure they are used according to your specified guidelines.

Similarly, if you are the owner of the hosting Web site, you must ensure you will be indemnified and otherwise protected against third party claims arising out of the use of the advertiser’s or sponsor’s marks online, particularly in light of the Internet’s global reach.

If you are a business engaged in advertising or marketing, you need experienced counsel to ensure you are in compliance with the law, in-the-know on current trends and industry insight, and up to speed for efficient and effective advertising and marketing business practices.