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Topic Summary: Marketing Compliance
A vast array of laws and regulations governs how organizations are allowed to market their products and services. These laws and regulations touch on every aspect of the marketing process, including (1) what organizations may say about their products and services and how they may say it, (2) what organizations may say about competitors and their products, (3) whether and how often organizations can market to consumers by telephone, e-mail and use of the Internet, and (4) what information organizations are allowed to collect from consumers and what they may do with that information.
The fundamental rule is that all marketing communications must be truthful, current and accurate. A corollary to the rule requiring truthful marketing communications is that organizations may not use deceptive or unfair claims or statements in their marketing activities. Any material representation or omission that is likely to mislead or deceive is a deceptive claim. Organizations must be able to substantiate every representation they make in their marketing communications.
Marketing laws and regulations also govern specific marketing activities, including —
- Comparative claims;
- Special offers, such as offers of "free" products or services;
- Sweepstakes and contests;
- Negative-option marketing;
- Digital marketing;
- Marketing to children; and
- Collection and use of marketing data.
The costs of noncompliance with marketing laws can be significant. They typically include monetary fines and injunctions for violators.