A Tweet may represent a mere 140-characters; however a recent
investigation in the UK is exposing that those 140-characters can
represent big money. In July, 2010, the Office of
Fair Trading (UK) (OFT) launched an investigation
on its own initiative into Handpicked Media (Handpicked), a
self-described "Collective of independent sites and blogs with
a focus on publishers", due to suspicion that it was engaging
and paying individuals for online promotional activity in
circumstances where such remuneration was not clearly disclosed to
consumers. It was the OFT's view that Handpicked was operating
in breach of the Consumer Protection from Unfair Trading
Regulations 2008 (CPUTR) which prohibits the use
of editorial content in the media, including Twitter, blogs and
other social networking websites, for the purpose of product
promotion where the promoter has been paid, unless such payment is
clearly identifiable to the consumer.
Sections 5(1) and
5(2)(a) of the CPUTR state that "A commercial
practice is a misleading action if it ... causes or is likely to
cause the average consumer to take a transactional decision he
would have not taken otherwise" and such action is prohibited.
The regulations also include prohibitions against "misleading
omissions" which may be triggered where a
Tweeter, Blogger or the like fails to indicate that he or she has
been paid to publish their opinion of a particular product. The OFT
investigation into Handpicked's practices was closed on
December 13, 2010. Handpicked was forced to sign undertakings
prohibiting it from engaging in any future promotion without
clearly identifying that the promotion has been paid for or
The UK is not alone in its crusade against misleading marketing
practices through digital media. In Canada, the Competition
Act (the Act) contains provisions addressing
false or misleading material representations and deceptive
marketing practices in promoting the supply or use of a product.
Representations are considered to be material where the statement
would affect a consumer's decision to buy or use a particular
product or service. The Act provides for both criminal and civil
adjudication of misleading representations, with penalties
including fines and imprisonment. Online marketing, including the
use of Twitter, is captured under the Act.
In the United States, the Federal Trade Commission (FTC) has
also recently revised its Endorsement Guides
(the Guides) so as to reflect modern truth-in-advertising
principles. The Guides, which were originally written in 1980, were
revised to address new social media, although the FTC states that
the legal principles have not changed. The general principle is
that if there is a connection between the endorser of a product and
its manufacturer/marketer that would affect how consumers evaluate
the endorsement, such connection should be disclosed in the
Companies should exercise caution to ensure that they do not
accidentally violate any of these laws or regulations.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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In less than nine months, on July 1, 2017, persons affected by a contravention of Canada's anti-spam legislation will be able to invoke a private right of action to sue for compensation and potentially substantial statutory damages.
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