Marketing Law Flashcards
THE MARKETING PRACTICES ACT
2017 edition
- Section 1 – scope
- Section 2 – definitions
- Section 3 – general clause (incl children and
young) - Sections 5 & 6 – false and misleading actions (incl
invitation to purchase) - Section 10 – unsolicited communication (incl
sales promotions) - Section 11 – children and young
- Section 14 – price information
- Section 22 – business identifiers
Section 1 of THE MARKETING PRACTICES ACT
Scope
Section 1
(1) This Act applies to private business activity and to public activity to the extent that products are offered in the market.
“Products” =
Section 2
(3) ‘product’ means any goods or service, including immovable property, rights and obligations;
–> Financial products and services are partly excluded from the scope of the marketing practices act and subject to specific sectoral regulation.
Section 3 of THE MARKETING PRACTICES ACT (GMP)
Section 3
(1) Traders shall exercise good marketing practice with reference to consumers, other traders and public interests […]
“good marketing practice” =
- Indeterminate principle of independent importance developed through case law, Executive Orders, and codes of conduct
- Provides for a dynamic development over time and with reference to different issues.
- It also injects uncertainty as to the demands for marketing practices.
BUSINESS-TO-CONSUMER
COMMERCIAL PRACTICES (section 5)
Misleading actions:
Section 5(1) A trader’s commercial practice must not contain false information or in any other way, including overall presentation, deceive or be likely to deceive the average consumer, even if the information is factually correct.
Section 6(1) A trader’s commercial practice must not be misleading by omitting or hiding material information or by providing material information in an unclear, unintelligible, unambiguous or untimely manner.
- Imposes on the market a false impression of the product that is likely to influence the consumer’s economic interest
- Could the information potentiall affect the supply and demand of that good or service?
- Subsection (2) contains a comprehensive list of examples
- Trade puffs (‘Probably the best beer in the world!’) are not considered false or misleading information.
SPECIFIC CLAUSES: B2B COMMERCIAL PRACTICES (Section 20)
Misleading or improper actions (section 20)
(1) The commercial practices of a trader must not be likely to mislead so that these may be assumed to affect other traders’ economic behaviour or harm a competitor.
(2) In the assessment of whether the commercial practices of a trader are misleading under subsection (1), the overall commercial practices concerned shall be taken into account, including information about the following matters: 1) characteristics of the product; 2) the price or the manner in which the price is calculated, and the conditions for delivery of
products; and 3) status, attributes and rights of the advertiser.
(3) A trader’s business-to-business commercial practices must not be misleading or improper.
- Tougher standard compared with business-to-consumer marketing communications
- As a professional you are expected to know more and make relevant inquiries.
THE GENERAL CLAUSE section 3
- Disloyal market displacement: intentional imitation of external distinctive features of a product legally marketed by a competitor with the purpose of crowding the competitor out of the relevant market.
- General decency: marketing should be legal, decent, honest and truthful; and must not incite or condone discrimiation based upon race, national origion, relgiion , gender, or age.; or deprave humnan dignity.
- Unfair contract terms: typically implying a power imbalance.
- Pyramid selling
- Hidden advertising
CONSUMER’S ECONOMIC BEHAVIOUR Section 8
Section 8
(1) To be in conflict with sections 4-7, the commercial practices must materially distort or be likely to materially distort the economic behaviour of the average consumer, or of the average member
of the group when the commercial practices are directed to a particular group of consumers.
(2) Commercial practices which are likely to materially distort the economic behaviour only of a clearly identifiable group of consumers who are particularly vulnerable to this practice or the underlying product, including because of their mental or physical infirmity, age or credulity, which the trader could reasonably foresee, shall be assessed from the perspective of the average member of this group
Section 22 of THE MARKETING PRACTICES ACT
Traders must not use business identifiers and similar devices that do not belong to them, nor use their own business identifiers in a manner that is likely to cause confusion with those of others.
Section 12 - Labeling and packaging
Following negotiation with representatives of consumers and relevant trade and industry organisations, the Minister for Business and Growth may lay down provisions to the effect that certain trade names or symbols are reserved for or shall be used for products that fulfil certain detailed stipulations, and that certain products may be sold or offered for sale only if such products or their packaging provide information about the products’ content and composition, shelf life and other characteristics
Section 10 of THE MARKETING PRACTICES ACT
Section 10
(1) A trader must not approach anyone by means of electronic mail, an automated calling system or a facsimile machine (fax) for the purposes of direct marketing unless the party concerned has given his prior consent. The trader must allow free and easy revocation of consent.
(2) Notwithstanding subsection (1), a trader that has received a customer’s electronic contact details in connection with the sale of products may market own similar products to that customer by electronic mail, provided that the trader has clearly and distinctly given the customer the opportunity, free of charge and in an easy manner, of declining this both when giving his contact details to the trader and in all subsequent communications.
(3) Where a trader approaches anyone by electronic mail for the purposes of direct marketing, the following conditions must be met:
1) the marketing communications must be clearly identifiable as such;
2) the conditions for sales promotions must be easily accessible and be presented clearly and unambiguously;
3) the identity of the sender on whose behalf the marketing communication is made must not be disguised or concealed;
4) the recipient must not be encouraged to visit websites where the trader responsible for the website does not comply with the requirements set out in (i)-(iii); and
5) an address must be provided to which the recipient may send a request that communications cease.
Section 14 of THE MARKETING PRACTICES ACT
Prices
(1) In his commercial practices, a trader offering products for sale to consumers must clearly and distinctly provide information about the price of the products under the detailed regulations laid down by the Minister under subsection (2).
(2) […] the Minister for Business and Growth may lay down detailed regulations for the disclosure obligations under subsection (1), including
1) regulations specifying the procedure for providing price information and restrictions on the quantity of information provided;
2) regulations specifying that the unit price of the product and the use of units for individual product groups must be indicated;
3) regulations specifying that information indicating the net quantity must appear on pre -packaged retail products; and
4) ….
GPDR
GDPR relates to the collection, storage, processing, and destruction of data that underlies your direct marketing campaigns.
Generally, opt-in is needed for sending personalized information to customers unless the data was collected ‘in the context of the sale of a product or service’ (Art 13(3) ePrivacy Directive).
There are also exceptions to B2B marketing.
E-COMMERCE in the marketing act
- Scope. Covers internet access providers, email, advertising and online sale of goods and services, search engines. Complements Marketing Practices Act (also Contracts Act and Sales of Goods Act) to the extent that part of the transaction is not carried out online.
- Geographical application. The Act applies to commercial activities carried out by a Danish establishment irrespective the geographic market inside the EU.
- Marketing services. Section 9(1) All commercial communications that are part of or constitutes an information society service, shall be designed and be presented in such a way as to make it clear that it is commercial communications. It must be clearly stated on whose behalf the commercial communication is broadcast.
- Price information. Section 8 When the price of an information society service, the price shall be clearly stated. It shall: indicate whether the price includes tax, and delivery costs
- Electronic confirmation. Section 12 A service provider shall, without undue delay electronically acknowledge receipt of an electronic order.
ENFORCEMENT in the marketing act
- Sanctions. In as far as the violation of trade secrets and indecent advertising raises criminal liability, this may be
suggested by the Ombudsman. However, sanctions are usually lenient. - Injunctions. The market participant that is in violation with the rules of the Marketing Practices Act my be ordered to terminate practices, or take action to address certain shortcomings. Non -compliance with orders issued by the Ombudsman provide a separate course of action (section 30)
- Damages. Possible, yes! But difficult to calculate. Also, consumers damages are usually so small that judicial action is not an alternative. Yet, violations against the Act ought still be punished.
- Price information. Section 8 When the price of a information society service, the price shall be clearly stated. It shall: indicate whether the price includes tax, and delivery costs
- Electronic confirmation. Section 12 A service provider shall, without undue delay electronically acknowledge receipt of an electronic order.
- GDPR. Fines for non-compliance with GDPR are extremely high!
key take aways of marketing law
1) The 2017 version of the Marketing Practices Act differs significantly from the 2013 version in structure, although much of the substantive content remains the same.
2) Marketing practices that are likely to affect a consumer’s economic behaviour are regulated in Part 2 (sections 4-7), where marketing relates to taste, decency, quality or other intengible qualities the general clause will apply instead (or in parallel).
3) The Marketing Practices Act overlaps significantly with IP law, Contract law and the Law on the Sale of Goods.
4) The Act addresses both how marketing practices should be exercised, and which marketing practices are prohibited.
5) The GDPR has significanlty changed how marketing via electronic means can be implemented.
