Marketing your business online is becoming increasingly important. It’s a good way to connect with your target audience, attract new customers, and grow your business.
But what does online marketing mean for your business’ legals? When you market your business, products or services online, it is important you know what your legal obligations are. There are a few major areas that you may want to review to make sure your processes are up to scratch.
In this article, we’ll run through a checklist of everything you need to know when it comes to online marketing:
- Your responsibilities and obligations when it comes to advertising
- How to protect your customers’ personal information
- Avoiding spam when sending out electronic communications
- How to properly use and protect your business’ intellectual property (IP) and make sure you don’t infringe someone else’s IP
Navigating The World Of Advertising
Online advertising can be an extremely effective and useful way to promote your business. Done well, you can grab the attention of potential customers and encourage them to buy your products or services. It can also help to promote your business by creating brand awareness with people that might be interested in what you have to offer.
But there are limits on the ways in which you can go about advertising your business. It’s important for you to understand these restrictions so you can avoid breaching the law and subsequently facing hefty penalties or fines.
Avoid False Or Misleading Statements
When promoting your business, it is crucial that the information shared — whether it’s a statement, quote, representation, or other communication — is true, accurate, and can be substantiated.
The Australian Consumer Law (ACL) makes it illegal for your business to make false or misleading statements about the standard, quality, value, age, nature or price of your goods or services. This applies even if you include fine print or disclaimers.
For example, ABC Coffee sells coffee beans that come from several sources. They falsely advertise in large print that their coffee beans come from a single origin, but include a disclaimer in fine print stating that the beans are a blend. It is unlikely that ABC Coffee will be able to rely on this disclaimer to claim their conduct is not misleading. Rather, the advertisement could constitute a false or misleading statement in breach of the ACL.
Managing Online Reviews
Conducting research into a business often helps consumers decide whether they should purchase a product or to work out if a service is right for them. In this way, online reviews can be a handy tool for your customers.
As a business owner, it’s your responsibility to manage and moderate these reviews to make sure that consumers are not misled. If you are aware of any fake reviews relating to your business, products, or services, it is important that you remove them. Not doing so will likely breach consumer protection laws.
Here are a couple tips for spotting fake or misleading reviews:
1. Look at who wrote it
Reviews about your business (including a product or service you offer) that have been written by the following people are likely to be fake or misleading:
- You or one of your employees
- A competing business owner or one of their employees
- Someone that has been paid to write a review without having used the product or service
- A person that has used the product or service, but has been offered a benefit (whether financial or non-financial) to make it seem better than it was
If your family members or friends write a review, they should disclose their personal connection with your business. This will help minimise the risk of the Australian Competition and Consumer Commission (ACCC) finding the review to be misleading.
2. Look into the appearance of similar accounts or similar language
Reviews may be fake if the accounts of the individuals writing them have similar identities, such as email addresses, usernames, or IP addresses.
Additionally, if there are a number of reviews for your business (including a product or service you offer) that adopt similar language or turns of phrase, they may be fake. This may also be the case if the language adopted is overly positive or uses marketing lingo.
Can You Offer Incentives In Exchange For A Review?
Yes, but it must comply with the guidelines established by the ACCC. The incentive offered should be available to customers regardless of whether the review is positive or negative. This should be made clear to the reviewer when the offer is made. If you only offer incentives for positive reviews, you risk breaching consumer protection laws by misleading consumers.
What If Your Business Has A Commercial Relationship With A Review Platform?
In this case, it is a good idea to disclose this relationship as it can have an impact on how your business appears to consumers.
For example, some review sites may push positive reviews to the top of the list, while others may prevent negative reviews from being published automatically. These processes can create the impression that your overall rating is better than it actually is.
By letting consumers know about your relationship with a review platform, they can make more informed purchasing decisions and you can minimise your risk of deceptive or misleading conduct.
You can read more about what you can and can’t do with online reviews here
Using Social Media To Advertise
Using social media is a great way for businesses of all sizes to interact and engage with customers.
The same consumer protection laws apply to social media as with other channels or forms of advertising. This means that you have a responsibility not to make any false or misleading claims. You should also keep in mind that you can be held responsible for posts and comments made by other people on your business pages.
For example, a customer posts a comment on your Facebook page about one of your products. You know the comment is untrue, but it’s gaining a lot of traction and more people are buying your products so you decide not to remove the comment. This is likely to breach consumer protection laws as it is false and likely to mislead consumers.
While using social media to advertise your business may look and feel more casual, don’t forget that consumer protection laws still apply. It’s best to avoid making statements on your social media pages that you wouldn’t make if using another form of advertising.
Stay on top of your social media pages and profiles, making sure to remove any posts that could be false or misleading as soon as possible.
Offering Prizes & Giveaways On Social Media
It’s common to see brands offering prizes and giveaways, particularly on social media, in order to increase their audience reach. If this is something you are considering for your business, it is important to understand your obligations.
In particular, it is unlawful to mislead your audience about what items you are offering or their chances of winning or receiving the items. Additionally, if there are certain conditions that entrants need to meet in order to claim a prize, they must be disclosed at the outset of the promotion.
Safeguarding Customer Information & Privacy
It’s important to make sure that you are protecting your customers’ privacy.
What Is The GDPR?
As the internet has no real borders when it comes to where your business operates, you will also need to be aware of your obligations outside of Australia.
The General Data Protection Regulation (GDPR) is a European Union (EU) law that can impact businesses all around the world. It is a set of data protection requirements that applies to any data collected from an individual in the EU, even if the data is processed elsewhere. Essentially, if your business has customers — whether existing or potential — in the EU, you will need to be aware of your responsibilities and obligations under the GDPR.
If your business already complies with Australian privacy laws, this is a great start for compliance with the GDPR and you may only need to make a few minor changes — be sure to check with a lawyer.
Direct Marketing And Electronic Communications
As a general rule, your business cannot lawfully use personal information to directly market to individuals unless an exemption applies under the Australian Privacy Principle 7, which forms part of the Privacy Act.
One of these exceptions applies if your business directly collects the personal information from the individual and they expect it to be used for direct marketing.
If you choose to contact customers directly using electronic communications (such as via email, SMS or MMS), it is important that you are aware of your obligations under the Spam Act 2003 (Cth).
Do You Have Consent?
Before you send someone marketing messages or emails, you will need to make sure you have their permission. This is often done through an email signup form or by asking individuals to tick a box next to a statement that gives their consent for that business to send them direct messages.
You should keep a record of when and how a person has given consent to electronic marketing communications.
What Does Your Message Need To Include?
Under the Spam Act, your business must be easily identifiable in any direct communication you send.
For emails, this involves having your business’ name in the ‘from’ field or subject line, as well as in the body of the email. Additionally, emails sent should include your business’ website and contact details.
Similarly with SMS and MMS marketing, it is important to ensure that your business’ identity is clearly identifiable to customers when they look at the message’s sender information.
Is There A Way To Opt Out?
You will need to include an easy way to opt out or unsubscribe from receiving electronic communications in every commercial message you send.
Some ways you may be familiar with include:
- A link at the bottom of EDMs that direct you to unsubscribe from the mailing list
- A sentence included in SMS or MMS marketing messages that prompt customers to “reply STOP to opt out”
These options to unsubscribe or opt out from further communications should be functional for at least 30 days after the message is sent.
If a person chooses to unsubscribe from marketing messages, you will need to honour their request within 5 working days.
Quick tip: If your customers haven’t given you permission to send them marketing emails, it’s more likely that they will mark your emails as spam. The more this happens, the more likely it is that email systems will flag your emails as spam or block emails you send, meaning that they won’t reach your customers.
Want to know more about the difference between direct marketing and spam? Check out our in-depth article here or get in touch to chat to one of our lawyers.
What About Cold Calling?
If customers provide you with their number, then you are able to call them for marketing purposes. Prior to engaging in this, it’s important to check if there are customers whose phone numbers are on the ‘Do Not Call Register’.
Calling a number that is on the ‘Do Not Call Register’ can result in fines, so it’s crucial to be thorough when doing this. There’s always the option to get the numbers washed and checked through a subscription – that way, you can be sure.
For numbers that are not on the register, it’s safe to call them to promote your brand. However, they can only be called between certain times and on particular days. A customer should only be cold called:
- Between 9am and 8pm on a weekday
- Between 9am and 5pm on a Saturday
- Never on Sundays and public holidays
Posting flyers is a more traditional marketing tool that many businesses still like to use. Flyers can be a great way to grab the attention of potential customers. However, there are certain rules that need to be followed to make sure flyers are being distributed correctly.
Firstly, flyers should only go directly into people’s mailboxes. Anywhere else such as the windscreens of cars, fences or outside of someone’s front doorstep is considered littering and you could be fined accordingly.
Secondly, avoid placing flyers in mailboxes that have a ‘no junk mail sign’ as this is against the distribution industry’s code of practice. It’s also a waste of resources to deliver flyers to anyone who clearly doesn’t consent to receiving them.
Intellectual Property Considerations
Intellectual property (IP) is valuable to any business. Things such as your business name and logo are important marketing assets that can help give you an edge over and stand out from your competitors.
As a business owner, you wouldn’t want anyone to misuse, or infringe on, your IP. So it’s not only important to make sure you protect your business’ IP, but also that you use other peoples’ IP in the correct way.
Protecting Your Business Name, Logo And Other Branding Assets
The protection of your business’ IP is important as it provides you with exclusive rights to use those assets and prevents others from using it without your permission.
In Australia, copyright laws automatically protect unique ideas that have been expressed in some material form, such as in writing, a video, or software code. Because copyright protection is automatic, you don’t need to register copyright in Australia.
Unlike copyright, trade marks will need to be registered in Australia. Trade marks are usually something that can identify a business, product, or service. This includes things such as your business name, logo, catchphrase or even colour!
Read more about the differences between copyright and trade marks.
It’s a good idea to register your own trade marks so that no other business can use it in the same way. A registered trade mark gives you exclusive rights to use it for up to 10 years in Australia.
But before you do this, you will need to make sure that you’re not using a trade mark that has already been registered under a business and infringing their IP. You can check this by doing a quick search on IP Australia.
Quick tip: You are responsible for managing and protecting your business’ IP. This means it’s up to you to monitor whether someone else is infringing your IP and enforcing your rights.
What About Your Website Domain?
Another thing to think about is protecting your website domain. When you set up a website for your online business, you’ll need to choose a domain name. This will often be the same as your business name. If it isn’t, it should still be easily recognisable and connected to your business.
In Australia, domain names are leased for a period of time. Once this period is up, the domain name becomes publicly accessible. If you don’t renew your domain name in time, someone else may lease or purchase it. You will lose access to the domain name with which you have built up your business’ reputation and your customers may be confused or have trouble finding your website.
One way to minimise this risk is by registering your business’ trade marks. If someone else tries to register a domain name that is substantially identical or deceptively similar to your trade mark, you may be able to object to its use.
Can You Use Music In Your Marketing Activities?
When it comes to using music, such as in advertisements, you will need to get a licence from APRA AMCOS. APRA AMCOS is a music rights organisation that oversees licensing in relation to playing, performing, copying, and recording the music of its members.
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