Editor’s Note: For any issues or questions regarding the law, please contact an attorney.
Marketing can be extremely beneficial for your business. It consolidates already-existing client relationships and builds new ones.
However, there are several key legal issues you need to be aware of before you start contacting customers or potential customers. The three main legal areas you need to consider are privacy and data collection, intellectual property issues, and rules and regulations of the FTC and other consumer protection bodies.
Let’s begin by looking at privacy and the online collection and storage of data.
1. Privacy and Data Collection
It may seem simplistic to point out that before you can send marketing emails or messages, you need to collect the contact information of your customers or potential customers. Yet, the actual process of collecting the information is far more complex than it seems, particularly if you’re trying to collect it in a legally compliant manner.
Laws and Your Privacy Policy
Most jurisdictions around the world have privacy legislation in place that requires you to notify people before you collect their personal information. This includes someone who is already a customer, although the UK has some slightly more permissive laws for people who have already purchased something from you.
In the US, there is no overarching privacy law that applies to the collection of data, but California has a piece of legislation that covers online privacy – the California Online Privacy Protection Act (OPPA). It requires that you need to disclose:
- The kinds of information your website or online marketing tactics collect
- How the information may be shared
- The process your customers can follow to review and change the information you have about them
- Your policy’s effective date and a description of any changes since then
If you have an online store or if you’re marketing to people online in the US, you’re quite likely to have customers or potential customers in California, so you should take care to comply with this law.
The easiest way to comply is to set up a Privacy Policy on your website and require your customers or website users to agree to it when you collect information from them.
To make sure your customer’s or user’s agreement will stand up legally, use a clickwrap method. A clickwrap method is where your customer or user has to click “I Agree” to your Privacy Policy in some way. This could be when they sign up to receive your marketing messages or when they make a purchase on your website. Here’s an example of what a clickwrap method looks like:
In this example, the customer or user is required to tick the box to agree to the Terms of Service and Privacy Policy of The Weather Channel before they can receive the newsletter.
Security and Cloud Storage
It’s also important to reassure your customers that once you’ve collected their information, you will keep it secure. Your users need to feel they can trust you. You can show them you are trustworthy by informing them about how you will protect and store their information.
Take a look at this example from Google that lists the protection mechanisms they have in place:
One simple way to protect customer privacy when you collect information is to use security mechanisms such as SSL. SSL means that the connection between your website and the user’s browser is secure when data is transmitted. Ensure that any websites you use with your customers have SSL enabled.
Another potential security issue is the storage of customer data. A popular way for many online businesses and marketing companies to store data is to use cloud storage providers. To reassure your customers that you are keeping their data safe, always choose a reputable provider.
And, preferably, choose a reputable provider within your own jurisdiction. This is because some jurisdictions have legal requirements that data should either not be transferred out (or must be accessible even if it is stored overseas) or should be transferred only to jurisdictions with similar legal protections for the data in place. If you overlook this fact and store data with a cloud storage provider in another jurisdiction that has inadequate protections, you may be in breach of your local laws.
If you use a cloud storage provider, you need to ensure that your Privacy Policy and/or your website Terms of Use cover the situation in which a cloud storage provider has a privacy breach and your customer data is released. Here’s an example from Amazon of that type of clause:
You can see that the clause limits Amazon’s liability and includes no liability for loss to any files. You want to ensure that you are not liable if a third party (the cloud storage provider) has a data leak. To maintain customer trust, use only reputable providers and be transparent about whom your customer data is stored with.
How to Comply
- Set up a Privacy Policy on your website
- Require your customers or website users to agree to it when you collect information from them
- Once you’ve collected the data, keep it with a reputable cloud storage provider
- Protect yourself from liability in the case of data loss
2. Intellectual Property Issues
The next legal issue to consider as a marketer is intellectual property. First, you want to protect your own intellectual property, such as trademarks and copyright. Second, you want to ensure that you don’t infringe on the intellectual property of others. Let’s take a look at the main types of intellectual property protection you may need.
Trademark
If you are sending out marketing emails or contacting people with flyers or advertisements, the first thing you will need to protect is your brand or logo.
Registering a trademark gives you the exclusive right to use a specific word or words, name, design, or logo in connection with specific goods or services. It is valid for 10 years and is renewable if certain requirements are met.
Before you register yours, check that you are not infringing on anyone else’s trademark and that your logo is not too similar to someone else’s. The easiest way to do this is to have your lawyer check whether your proposed mark is similar to any other marks. The lawyer will search an intellectual property register, namely the US Trademark Database. They may also search international registers or registers in other jurisdictions, depending on how broadly you plan to market using your mark.
You can search the US Trademark Database yourself, but an intellectual property lawyer will have a better idea of what you need to search for. Sometimes you need to search for the same trademark in multiple categories of goods; for example, a trademark that you want to register for marketing relating to a supermarket roadshow may come under categories relating to food, alcohol, other beverages, supermarkets and retail stores, marketing, and many more.
When you’re ready to file your trademark application online, in the US, you can use the Trademark Electronic Application System.
Copyright
If you use original marketing language on your website or text in emails, you may want to copyright that text. Copyright relates to authorship of original works, including literary, dramatic, musical, artistic, architectural, and a broad range of other works.
If you work with any third parties who write your marketing copy or text for you, ensure that their work is checked for plagiarism. You don’t want to infringe on someone else’s copyrighted work when sending out your emails or newsletters.
Here’s an example from Ads Direct of what you might include in your Terms of Service to protect your intellectual property:
You can see that they list a number of different types of intellectual property (names, graphics, logos, etc.) and that they also claim they do not own any third-party names, trademarks, or service marks that may appear on their website. If you partner with any other organizations or use quality assurance marks on your marketing materials, this may also be worth covering in your clause.
How to Comply
- Check that your proposed branding is not infringing on anyone else’s
- Get your intellectual property registered
- Hire a lawyer if you need help
- Set out your intellectual property use expectations clearly in your Terms of Service
Rules and Regulations of the FTC and Other Consumer Protection Bodies
The Federal Trade Commission (FTC) has dominion over several key areas relevant to marketers: privacy, anti-spam legislation, and truth in advertising. We’ve already covered privacy above, so let’s take a look at some of the FTC’s rules on advertising and anti-spam practices.
3. Advertising
The FTC requires that advertisements and marketing messages must not mislead consumers or unfairly affect consumers’ behavior or decisions about the product or service. Unfair or deceptive advertising is prohibited, which means that any marketing must tell the truth and not leave out any relevant information that a consumer would be interested in.
Be careful with any comparative advertising or marketing. If you don’t compare products fairly and transparently, you may be breaching advertising standards. Check the wording of your marketing messages carefully and ensure that someone outside of your marketing team (such as someone from your legal team) has a quick look at what your message is saying. A fresh pair of eyes may notice claims that aren’t quite true or descriptions that overemphasize a product’s abilities.
Other regulators on the advertising front that you may need to keep in mind are the Advertising Self-Regulatory Council, which governs the National Advertising Review Board and the Children’s Advertising Review Unit (CARU). If any of your marketing is targeted at children, ensure that you are fully aware of CARU’s guidelines.
Anti-Spam Law
The main anti-spam law in the US is called CAN-SPAM. The FTC enforces CAN-SPAM and has issued guidance on how to comply.
We’ve covered this previously. To recap, CAN-SPAM requires that you:
- Don’t use false or misleading header information
- Don’t use deceptive subject lines
- Identify the message as an ad
- Tell recipients where you’re located
- Tell recipients how to opt out of receiving future email from you
- Honor opt-out requests promptly
- Monitor what others are doing on your behalf
The FTC also has a great guide that provides a checklist and guidelines to help you make your business “consumer friendly” overall for international ecommerce. Before you begin marketing your business, be sure that you’ve incorporated some consumer friendly business tips so that you don’t run into trouble further down the line.
If you get into trouble with the FTC or any other consumer protection body, be prompt and clear in your communication with them. Aim to work together toward a solution right away, as it may help you avoid prosecution.
How to Comply
- Be aware of what regulations and laws the FTC and other regulators cover
- Educate yourself on what you need to do to comply
- If you get into hot water with any regulator, work with them to solve the problem
Conclusion
To comply with the law, the key things to remember are: get consent to send your marketing material; ensure that your customers are aware of and sign up to your Privacy Policy when you originally obtain their information; protect your intellectual property and don’t infringe on that of others; be honest and clear with all marketing messages; and allow your customers to opt out of your messages if they wish.
As a marketer, you may be wary of legal pitfalls, but by keeping the issues of privacy and data protection, intellectual property, and consumer protection laws and regulations in the forefront of your mind, you can ensure that you won’t run into any problems.
About the Author: Leah Hamilton is a qualified Solicitor and writer working at TermsFeed, where businesses can create their Privacy Policies and Terms and Conditions in minutes.
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