Starting on December 1, 2009 the Federal Trade Commission’s new guidelines for testimonials by bloggers, Tweeters, Facebook-ers and others will take effect. These guidelines are set to help determine whether or not paid testimonials or endorsements are covered by the FTC Act. Bloggers who are paid by a company in exchange for a positive review of its products are making endorsements and may have to disclose any financial ties to that company.
Google, Yahoo! and others offer advertising services that can pluck words from a web page to create customized advertisements. Contextual Advertising as its called, is a really cool feature but there are some potential problems that companies considering online advertising campaigns should consider.
1. They can make you look bad.
See this Business Insider story about the worst Google Ads ever. The ad in question appeared with a news story about terrorists and offered a Terrorist Certification program. Probably not what the advertiser had in mind. I hope. This isn’t necessarily a legal problem, but it can be embarrassing and costly to correct. If you are using an algorithm to create your ads, you need to be aware of what that algorithm could create as output.
2. It could violate privacy laws
AOL was recently sued for its contextual advertising program because it was allegedly gathering private information in order to better target the ads. Many times the information gathered by these services are not tied back to any one particular user, but it is something to be aware of. Wired magazine recently ran an article about how easy it becomes to identify someone just by collecting a few facts. Zip code, employer, car model. . . none of these would identify you by themselves, but put a few of them together and very quickly you can have an individual identified.
3. It could be trademark infringement
Keyword based advertising is big business for search engines like Yahoo! and Google. Its also been a hot topic in trademark law. If you select a trademark to trigger your advertising, you could be infringing. Its even more certain that you would be infringing if you have that trademark appear in the text of your ad. Just about any word could be a trademark so context is important.
4. It could be false advertising
False advertising laws vary from state to state but can include anything that creates a misunderstanding with a consumer. If your ads are designed to grab words from web pages be sure you offer goods or services that you are now claiming to offer.
Contextual Advertising is a powerful tool and I think we will see much more of it rather than less. But like any powerful tool it should be handled carefully.
I saw this article on Slashdot which was a bit troubling even for an attorney who has been on the plaintiff’s side of copyright disputes. Basically, the proposed “three strikes” law in the UK as well as similar ones in France and elsewhere would kick people off the internet if they are accused of infringing copyrights three times. That’s right even when simply accused.
This of course is a serious free speech issue which I don’t doubt others have picked up on already. The French law may be unconstitutional, and if a similar law were proposed in the US it would no doubt face First Amendment challenges.
The problem with efforts like the “three strikes” laws for the copyright holders is that its bad for business. Whatever business model overtakes distribution of physical copies in the future, the internet will be a major part of it. What those models will be is still uncertain. But it makes no sense to remove your customer base from the channels of commerce. It will be difficult to sell subscription services to people who cant access them.
This is an interesting story especially because the amount of damages awarded are so high. The ISP was a host to a number of sites that were selling counterfeit fashion goods like Louis Vuitton handbags. The ISP had claimed an exemption under the DMCA, however the court correctly concluded that that only applied to copyright not to trademark infringement. Something for any ISP or hosting service to keep in mind.
Here is the link.
Hat tip to @EvansIPLaw for posting a link to this article on Twitter.