iLegal – To Comply or Not to Comply…That is the Question

As a participant in the world of online advertising you are subjected to many laws, rules and regulations. State, Federal and local government agencies want you to comply, every time, all the time. Much is at stake. And yet, we all know people in this industry who are not in compliance, even with such fundamental legislation as the CAN SPAM Act.

Why is it that some work hard to comply and others don’t? Personally, I think failure to comply comes for many reasons. The following are some of the major ones:

Ignorance – Affiliates simply don’t know about the laws and regulations to which they are subject.

Willful Disregard – Some affiliates know about the laws, or at least some of them, and simply choose not to comply because they feel it is "too difficult," or "not profitable."

Too Expensive to Comply – Some affiliates feel that hiring counsel is beyond their means, and so they just ignore the risks they face by not understanding, and not complying with the law.

Let’s deal with each of these in turn.

Ignorance. As with anything you do in an organized society, Internet advertising is subject to a myriad of laws, regulations and rules which you must follow. Imagine the reaction of the police officer if you got pulled over doing 65 in a 35 zone, and said "But officer, I didn’t know the speed limit!" Not only would he be unhappy, but he’d still give you the ticket. Along with it you’d probably get a lecture about your responsibility to know the laws which regulate your ability to drive.

As with anything you do in an organized society, Internet advertising is subject to a myriad of laws, regulations and rules which you must follow. Imagine the reaction of the police officer if you got pulled over doing 65 in a 35 zone, and said "But officer, I didn’t know the speed limit!" Not only would he be unhappy, but he’d still give you the ticket. Along with it you’d probably get a lecture about your responsibility to know the laws which regulate your ability to drive.

The same is absolutely true in regard to the laws surrounding Internet advertising. You simply have to know. When you get notice of an enforcement action by the FTC, or of an investigation by a state Attorney General, the fact that you "didn’t know" your behavior was illegal, not only won’t get you out of the situation, but it’s likely to make it worse.

Bottom line, like it or not, you have a responsibility to know the rules of the road for Internet advertising. Not sure where to start? Try the FTC’s Dot.com Disclosures, located here: http://www.ftc.gov/bcp/conline/pubs/buspubs/dotcom/index.shtml.

Willful Disregard. Interestingly, I have spoken with quite a few affiliates who are aware of the laws, but simply choose not to comply. They tell me things like, "I’m a small guy; no one will ever come after me." Or, "If I do that, then the offer won’t convert as well and my revenue will decrease." This is dangerous territory.

Interestingly, I have spoken with quite a few affiliates who are aware of the laws, but simply choose not to comply. They tell me things like, "I’m a small guy; no one will ever come after me." Or, "If I do that, then the offer won’t convert as well and my revenue will decrease." This is dangerous territory.

First of all, the FTC does like to go after the "small guy." We’re seeing more and more enforcement actions against small guys, because they make easy pickings for the FTC. If the FTC can make the same point by going after a bad guy who can’t afford the legal defense that a major player would pursue, it makes sense for them to go after the small guy. After all, precedent is precedent, and if the FTC is able to make law by prosecuting the small guy, then the big guys get the point. Don’t think you’re too small to get noticed. That’s a huge mistake that could land you in jail, wondering "why me?"

On the second point, that sometimes compliance can make offers perform less well, the reality is that it’s sometimes true. But ask yourself this; if you have to violate the law to make money, what does that make you? In every textbook I’ve ever read, it makes you a criminal. Clean operators follow the law, and find ways to make their offers perform within the parameters set by the FTC.

Too Expensive to Comply. This is simply not true for the smaller affiliates. If you can’t afford to spend money on compliance because you’re a small operation, the odds are you don’t need to. Compliance takes time and effort, but not necessarily money. Simply review the FTC website and follow their guidance. It will take you a long way in your compliance efforts. Also, here are links to a couple of great articles on CAN SPAM compliance.

This is simply not true for the smaller affiliatesIf you can’t afford to spend money on compliance because you’re a small operation, the odds are you don’t need to.Compliance takes time and effort, but not necessarily money. Simply review the FTC website and follow their guidance. It will take you a long way in your compliance efforts. Also, here are links to a couple of great articles on CAN SPAM compliance.

Symantec: http://www.symantec.com/smb/library/article.jsp?aid=can_spam

Email Labs: http://www.emaillabs.com/best-practices/can-spam-compliance.html

If you’re a larger operation, then compliance will cost you some money. You need to be on top of your game and monitoring your company’s activities (and possibly those of its affiliates) all of the time. You’ll probably even need to hire serious Internet counsel. So you’re going to spend some money. But like insurance, it’s an investment well worth making. And like insurance, it’s too late to consider after the catastrophic event has taken place.

_____________________________________________________________

Come back to the iLegal column every week as we get specific about the rules, regulations, laws and trends that affect the online advertising industry. Each week we discuss important legal issues, talk about how to avoid the pitfalls, and cover the breaking legal and regulatory advertising industry news.

Legal Disclaimer: Information conveyed in this column is provided for informational purposes only and does not constitute legal advice. These materials do not necessarily reflect the opinions of Digital Moses, and is not guaranteed to be complete, correct, or up-to-date. The column is provided for "information purposes" only and should not be relied upon as "legal advice." This information is not intended to substitute for obtaining legal advice from an attorney. No person should act or rely on any information in this column without seeking the advice of an attorney.

Mark Meckler is the General Counsel for UniqueLeads.com, Inc., and Unique Lists, Inc. Mark sits on the eCommerce and Technology Committee of the Association of Corporate Counsel, and is a member of the International Association of Privacy Professionals.

Copyright 2007 Mark J. Meckler