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Advertising Laws and Regulations In-House Lawyers Should Know

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By Jonathan R. Tung, Esq. on December 07, 2015 12:59 PM

In-house counsel may be tempted simply to apply a common sense approach to marketing and advertising issues you may encounter. After all, operating on good-faith and honest disclosure works well-enough for general law practice, right?

Well, you'd be wrong. Advertising and marketing are actually subject to numerous federal, state, and local laws and regulations. Keeping track of which laws govern which industries can be quite a chore. But it must be done.

Hidden Dangers

Advertising is governed by a range of federal, state, and local regulations. In light of this complexity, some inside counsel may elect to take a "common sense" approach to marketing and advertising issues, relying on the assumption that being truthful, ethical, and logical will insulate their company from liability. But advertising decisions involve more than truth, ethics, or logic. Instead, such decisions require in-depth knowledge of the numerous laws and regulations that govern specific industries and advertising practices. Failure to know the applicable laws can cost you.

  • Federal Trade Commission Act: The FTC is major federal agency that you must be wary of. If you assiduously abide by the truth-in-advertising rule, you ought to be in compliance with this law. The FTC Act requires that advertising must be truthful and not deceptive. Failure to abide by this rule can result in FTC consent orders which essentially place the watchful eye of the agency on your firm for a very long time -- sometimes 20 years. The Act also broadly requires that companies disclose all relationships that even could hint at a conflict of interest.
  • State Regulations: In-house lawyers also have to worry about state regulations which are almost more stringent than federal laws. Let's keep it simple by limiting business to a single state. For example, the state of California requires that before companies can collect consumer information for recurring and automatic billing, such transaction terms must be plainly and clearly disclosed to the consumer in plain, easy-to-read English.
  • Local Regulations: Finally, if that wasn't enough, local regulations must be followed. Let's consider Florida. Even though cruise ships are typically regulated by the International Maritime Organization, some ports in Florida are subject to local advertising regulations. Thus, compliance with federal regulations and state regulations might not be enough. You'll still subject your client to nasty fees and fines even if you operated under the reasonable assumption that the IMO had ultimate jurisdiction.
  • We hate to be harbingers of doom, but in-house lawyers are paid the big bucks to know these traps. You can guide your company through the forest of monsters that is marketing and advertising. Remember: a top-down approach is often the best.

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