Download Environment and Marketing

Marketing and the Law
What is Marketing?
Children and Marketing
Discrimination in Marketing
Health and Marketing
Go Green Or Is it Just A Hoax?
LLD Pertti Virtanen
University of Lapland
Faculty of Law
E-mail: [email protected]
New ICC-rules!
• The International Chamber of Commerce (ICC) has publish a new
code in September 2011.
– This code is not very different from the old version.
– The main differences are (as stated in the code):
• The applicability of rules on digital interactive marketing communications is integrated in the
rules.
– This includes: Responsibility for the use of online behavioural targeting in the delivery of
advertisements.
• The rules on environmental claims in chapter E have been updated.
– “The chapter was adapted to address claims related to behaviour and lifestyle.”
• The use of the ICC-code is promoted.
– The access to these codes is now easier:
• See: www.codescentre.com
Marketing and the Law
• In Finland marketing is regulated by two different, but rather similar
laws:
– Consumer Protection Act (or CPA)
• This law safeguards the rights of consumers on many issues of which marketing is one.
– Unfair Trade Practices Law (or UTL)
• This law forbids unfair trade practices when these are at least potentially harmful for other
enterprises.
– With regard to marketing the interpretation of these laws is almost identical.
• A consumer is supposed to know less so marketing standards towards consumers are higher.
• In many cases marketing that is harmful for consumers is also harmful for competitors as
misleading advertisements etc. can cause buyers to switch to the advertisers products.
• In Germany marketing is regulated by Gesetz gegen unlautere
Wettbewerb (UWG).
– This law is similar to both PCA and UTL (and governs both consumer and
business marketing).
• In UK there is no general law against unfair trade practices. For
consumer marketing there is a new law since 2008.
– This is called The Consumer Protection from Unfair Trading Regulations 2008
What is Marketing?
• Marketing is any kind of business activity that has the following
characteristics:
– It is a message to consumers or other businesses in which
– A company, its products or its services is promoted by
– Any media available.
• Private conversations, messages or other non-business communication
are not marketing.
– Even businesses can have “private” type of messages.
• For example: Is the yearly general report of a public limited company “private” or is it
marketing?
• What if it is used just like any advertisement?
• A message to investors can be marketing if the aim is to promote a sale of stock.
– The question is today: how to draw the line?
• If you tell your friend that Nokia is good or Nokia sucks, this is not marketing.
• Even if a group of consumers is discussing Nokia on the web, in facebook or by twitter, this is
not marketing.
• What if Motorola’s employees would take part in the discussion?
• What if Motorola’s marketing department etc. would take part in the discussion?
What is Marketing?
– How should one react to marketing like material that is made by consumers
themselves?
• If it done without any help, payment etc. by Nike, is it a Nike add when their products are
displayed in a video clip?
• If Nike gives a small sum for the winner of a video clip –competition but doesn’t influence the
video’s, is this marketing when Nike’s products are displayed?
• If Nike gives a small reward (a new pair of shoes) for the video makers, is this marketing?
• What if Nike insist that their products are used in the two scenarios above?
• The law doesn’t really say anything very clearly.
– Rather interestingly the ICC rules purpose is to be:
• “… an instrument of self-regulation for commercial communications; however, its provisions
may also be useful in regulating other, non-commercial forms of advertising and
communication…”
– These rules also accept that payment might not be necessary:
• “…the term “advertising” or “advertisement” means any form of marketing
communication carried by the media, usually in return for payment or other valuable
consideration;…”
– This must be read in conjunction with:
• “… the term “marketing communication" includes advertising as well as other techniques, such
as promotions, sponsorships, and direct marketing, and should be interpreted broadly to mean
any form of communication produced directly by or on behalf of marketers intended primarily
to promote products or to influence consumer behaviour.”
What is Marketing?
– The ICC rules use the term “any form of communication”.
• This means that any type communication used today or in the future can be marketing.
• The limitation is “by or on behalf”
– This means that the message must be from or at least instigated by the marketer.
– The Finnish CPA has no definition for marketing whatsoever.
• It simply forbids any inappropriate or otherwise unfair commercial practices and marketing.
– The UK CPR uses the definition of commercial practices:
• “commercial practice” means any act, omission, course of conduct, representation or
commercial communication (including advertising and marketing) by a trader, which is directly
connected with the promotion, sale or supply of a product to or from consumers, whether
occurring before, during or after a commercial transaction (if any) in relation to a product.
• Thus the English law seems to be more connected to what a trader is doing directly and other
situations would not be covered by this law.
– In the German UWG two definitions are used:
• 1. Geschäftliche Handlung
• 2. Nachricht
• There is no general description or rule for marketing (or Werbung in German) in UWG.
• General starting point legally must be that the concept of marketing is
interpreted widely.
– What the aim for the message is, is not relevant.
What is Marketing?
• What matters is how the target group for the message understands it.
– If it is in their opinion marketing (and thus might affect what they buy etc.) then even a
message that should only have been general information for the stock holders is
marketing and will be treated as such.
– Even with wide interpretation messages that have nothing to do with a company
cannot be held to be marketing by this company.
• For example a boycott by a consumer group against the products of Neste would not be
marketing by Shell.
• What if Shell supplies some of the materials used in the campaign?
– Any type of payment in any form whatsoever can turn a message that would be
private into a commercial message.
•
•
•
•
See UK Case Law (OFT case “Handpicked Media”).
This would simply mean that the message is “on behalf” of the marketer.
Payment could be money, products, free services etc.
What if the payment is very small?
– For example a school could receive some money for prices and the resulting (featuring
the products of the company) music videos are posted on the school web-site. Marketing
or not?
– If the grant of money includes a stipulation by which the videos should include the
products of the company, it is marketing even if the prices are small (it is on behalf…).
– As already said the form of communication is not relevant.
• In Finnish case-law e-mail signatures were held to be adverts.
What is Marketing?
• Even promoting goods or services at someone’s home is usually
marketing.
– What about “Tupperware-parties” or such? Are they marketing?
• Yes, they are, if the promotional materials are delivered from a business.
• No, they are not, if it is totally privately organized and the promotional material is gathered
from the internet etc.
– What if for example a website promotes “parties” with their goods or services as a theme?
– In my opinion the marketing materials are always marketing in these cases, but what a consumer says in such a party is
not.
• How about “black marketing” – messages just simply imply that the
goods offered by a competitor are worthless or competing company
has criminal ties, pollutes the environment etc.?
– All this is clearly marketing and usually is unfair.
• What if the campaign is started by a consumer group?
– See ICC-rules article 12:
• “Marketing communications should not denigrate any person or group of persons, firm,
organization, industrial or commercial activity, profession or product, or seek to bring it or
them into public contempt or ridicule.”
– Again it must be a marketing message.
– A boycott by a consumer group is not however marketing.
• If it is paid by a competitor – then it is!
What is Marketing?
• Legislation demands that marketing should be identifiable.
– This is also included in the ICC rules:
• See Article 9 and 10
– Finnish CPA 2:4 §, German UWG (Anhang zu § 3 Absatz 3) punkt 10 and UK
CPR (Schedule 1) 11.
• The English and German definitions are similar: “11. Using editorial content in the media to
promote a product where a trader has paid for the promotion without making that clear in the
content or by images or sounds clearly identifiable by the consumer (advertorial).”
• The Finnish requirement is more general demanding that advertising and marketing must
always be pointed out as such.
– What does this mean?
• If there is a possibility that any text, video or other material can be regarded as marketing, this
should always be clear from the material itself.
– ICC rules and Finnish Law are very clear on this viewpoint.
– The legal position is similar also in Germany and UK (as I have understood).
• The needs for identification differ.
– At times it is clear that it is marketing.
• An advertisement in a newspaper or during “commercial break” on TV.
What is Marketing?
– At times it is harder.
• An article that clearly favors certain producer.
– This is the “advertorial” mentioned above.
– Some situations are different.
• Product placement?
– The program should include a notification of this. Not every product in the program.
• Sponsoring?
– Can be done by stating “sponsored by” when necessary. A sponsored advertisement on a
sportsman or –woman is clearly marketing.
• Finnish Case law:
– MAO:18/03 it was forbidden to send marketing letters that looked like bills.
• The consumer could understand the letter wrongly and think that he/she had a contract with the
company and must pay the bill.
– MAO:33/03 a message asking to contact a competing service provider was
clearly marketing.
• The company claimed that they only tried to safeguard people using a service that might not be
available after a certain date.
– MAO:204/04 even the use of a legally registered company name can be
marketing and the use of the name can be forbidden.
• In this case the name was “ALE” (which means “sales” or “promotion” in English).
Marketing and Children
• Children are regarded as a group that can be more easily influenced by
marketing.
– They don’t have same knowledge and information as adults.
• For example small children could more easily mix fantasy and reality.
– And if they believed that an advertisement is truth, they might try to do something that is
dangerous.
– Thus every marketer has a duty to ensure that marketing is not harmful for
children.
• Any marketing that can be observed by children should follow ICC –rules and national rules.
• ICC –rules Article 18 governs marketing and children. The basic demand on marketing are:
– “Such communications should not undermine positive social behaviour, lifestyles and
attitudes.”
– “Products unsuitable for children or young people should not be advertised in media
targeted to them”
• In Finnish case law the Market Court held that a company should have insured that marketing
would not target anybody underage (MAO:80/03).
• It is no excuse that parents should guard what their children see as the Finnish Board for
Ethical Marketing (FBEM) stated in FBEM 18/2010.
– In Finland the law did not include special rules on marketing and children before
2008.
• In case law the demands of ICC Rules were followed as action contrary to these rules was
regarded as inappropriate and thus against the more general rules in CPA 2 Chapter.
Marketing and Children
• Who are children in this case?
– The ICC rules leaves this question to the national legislation.
• Thus the age might be different from country to country.
– As in all cases where children are mentioned in the legislation the limit is
usually maturity or coming to legal age.
• Legal age in Finland is 18 years.
– Children of different ages and development stages understand things differently.
• Thus one limit is not enough.
• In the Finnish Law it is clearly stated that one must take into account the age and development
level of any children that marketing might generally reach.
• Usually on separates the small children (up to school age), pre-teen agers (up to 12 years old),
young teen agers (up to 15 years old) and 15 years olds to maturity.
– One must take most care in advertising for small children and pre-teens in medias /
programs this group might see or hear.
» This also means that non-suitable advertisements shouldn’t be shown before young
children are supposed to go to bed (before 21.00).
» If a program is specially interesting for small children, it should not include
unsuitable ads even though it is shown after 21.00.
» FBEM found in statement 18/2008 that an advertisement for a future program on the
lives of prostitutes was inappropriate even though it was shown after 21.00. The
program it was included in was “Amazing Race, Family Edition” which according
to FBEM was interesting for children too.
Marketing and Children
– Marketing for young teen agers can include more “scary” material than for younger
children.
» The FBEM approved add for language courses might be acceptable for this ager
group.
» Excessively sexual or violent material is not allowed.
– Over 15 year olds have probably seen and also experienced much of the same things that
adults have. They are almost mature and can thus receive almost same marketing material
than adults can.
» The FBEM found in statement 6/2009 that marketing for over 15 year olds could
include “A Test for Flirting” in a language course advertisement.
• Even marketing aimed at adults should take into account that children
might be interested in the product in question.
– In this case marketing might be inappropriate even if would be acceptable for
adults.
• Advertising sweets using animation technique and strip tease bar was unacceptable for this
reason (FBEM 12/2009).
• A sexual oriented scene including a poodle and a rocking horse in an advertisement for potato
chips was also unacceptable (FBEM 15/2010).
• Marketing for children should not exploit their inexperience or
credulity.
– See article 18 ICC rules.
Marketing and Children
• There should not be any elements that might harm children and their
development.
– Violence, sex and too fearful material must be avoided.
• If it is not really scary for children it is allowed (FBEM 10/2009, an advertisement for “scary
movie”).
• Marketing on bill-boards that included pornographic material was inappropriate for children
(FBEM 30/2009).
– This advertisement was for Sexhibition – Erotic Event which as an event is quite legal.
• A condom advertisement was allowed as it was aimed to young adults (FBEM 25/2009).
– The Board did stress that this kind of marketing material should not be on any internetsite that younger children might visit.
– As even very young children are computer literate, the Boards statement might be false.
» This advertisement included a game “Sultan Sexercise” and any kind of game tends
to be interesting to children.
» If it is on a site big brother or sister might visit – should it be allowed?
• Violence including the bloody face of an ice-hockey player was allowed (FBEM 22/2009).
– The Board stated that violence is part of the game and it was not overly shown in the
advertisement.
– If only the “bloody part” of a sport is shown, the marketing might be inappropriate.
– Any situation in marketing material which could cause bodily harm to a child is
to be avoided.
Marketing and Children
• The Swedish Marketing Ombudsman (SMO) stated (Ärende 1009-79) that an advertisement where
children hid inside different furniture items was acceptable as the furniture they hid in wasn’t
dangerous (they could have had enough air).
• The social development of children should not be impaired.
– The ICC rules in article 18 clearly state this:
• Marketing communication should not suggest that possession or use of the promoted product will give
a child or young person physical, psychological or social advantages over other children or young
people, or that not possessing the product will have the opposite effect.
– Advertisement shouldn’t state that you are a looser if you don’t own a Playstation etc.
– Advertisement shouldn’t state that you are in the “in-crowd” if you have “Virtanen-jeans”.
• There should be no pressure on the children to have them persuade their parents to buy a certain
product for them.
– This rule is close to impossibility as any marketing directed at children wants them to buy and it
is usually the parents that “buy”.
• Marketing should not undermine the position of parents in any way.
– Marketing message that says that parents are unfit or bad(if you don’t get X) is clearly
prohibited.
• In the new ICC-rules it is pointed out that children must be taken into
account even when promoting products.
– Promoting = selling things for reduced price etc. (See ICC-rules section A).
– ICC Article A5 “…in particular take reasonable steps to prevent unsuitable or
inappropriate materials from reaching children.”
Discrimination in Marketing
• Marketing must naturally follow the values of the society. This is even
required by the law.
– A special case is made against discrimination on any grounds.
• The Finnish CPA 2:2 § point 2 forbids discrimination on the grounds of sex, age, ethnic or
national background, language, state of health, sexual orientation and other personal reasons.
• The UK CPR doesn’t include this kind of rule.
– In my opinion discrimination must be forbidden even in UK as it is a more general
principle.
• The situation is similar in Germany as GWB has no discrimination rules either.
• The most common reason for complaint is discrimination because of
sex.
– This has evolved in “ethical” case law in Finland and Sweden where
advertisement can be for bidden if it is:
• too sexist
• Women or men are used provocatively and this is unrelated to the production or service in
question
– Examples of case law in Finland and Sweden:
• Women’s but in a camera advertisement (FBEM 16/2003). Discriminatory!
• Women’s breasts in an advertisement for “Oktober Fest” (FBEM 2/2009). Discriminatory!
Discrimination in Marketing
• Naked diva (Karita Mattila) in a newspaper “front page” advertisement. The picture was from
the opera Salome where she undressed in the opera (FBEM 4/2009). Allowed -> Nakedness as
such is not forbidden.
• Women’s butt and thighs in a Reebok shoe advertisement (FBEM 12/2010). Allowed -> The
images were connected with the product.
• A boy and a girl play house. The girl makes decisions because she is “mother”. The boy says
“next time I’ll be mother” (FBEM 3/2009). Allowed -> Humor and didn’t unethically stress the
images what man or woman should do.
• Women in tight and revealing clothing or black tights in an advertisement for lamps etc. (SMO
1011-238). Discriminatory -> No connection with the products.
• “Tips for what to buy” for different relatives etc. (SMO 1011-245). Allowed -> Women and
men not shown in discriminatory or despicable roles.
• Compare to an advertisement for computers – different computers for woman and for men
(SMO 1009-177). Discrimatory.
• Children’s clothing was advertised separately for girls and for boys. The advertisement should
have given the impression that girls can use Michael Jackson – T-shirts and boys can use
“flowery” clothing (SMOB 1007-140). Discriminatory as it strengthened old-fashioned views
of the roles of men and woman in society.
• See also a case concerning toys (SMOB 1011-244).
Health and Advertising
• Another group of people that are in need of protection is those that are
ill.
– Especially those who suffer from a non-curable illness might “fall for” an
advertisement that promises cure.
– This field is so important that the European legislator has issued a regulation on
the subject.
• This regulation only covers foodstuffs.
– See EY N:o 1994/2006
• When marketing foodstuffs one can only use accepted health claims.
– The acceptance is EU-wide and the accepted claims are registered by the
Commission.
• Only by using the registration method can a new marketing claim be used.
– The system is more strict when it is claimed that the foodstuff will prevent or
cure sickness.
– In case of nutritional claims (like low energy food, no added sugar) the system is
slightly less strict.
• The difference is in the registration system. A claim for preventing or curing sickness can only
be accepted after “a statement method”. In case of nutritional claims the Commission can
accept the claim without asking for statements.
• In Finland the authority is Evira.
Health and Advertising
– Evira’s webpage is a good source of extra information. See also the Commission
webpage.
• There are also limitations on marketing for medicines.
– The Finnish Act on Medication forbids any marketing for prescribed medication
and recreational drugs.
– There are certain issues that must be included in the marketing.
• Information that is necessary for safe use of the medication.
• A request to read the instruction for the use of the drug.
– There are also forbidden marketing:
• Marketing for children
– Children’s medication can only be marketed to adults.
• Claim that drug A is better than drug B or that it is guaranteed that you’ll get better by using
drug A.
• The marketing for healthcare personnel is not as strictly regulated.
– This is natural as they should know better because of their schooling.
Green Ads – For and Against
• Advertising has two main purposes:
– Image marketing e.g.. what is company A?
• This kind of marketing tries to make us thing positive about a company
• For those that are “eco-friendly” company A would send a message of being GREEN.
• This can even be a hidden message – green, forested backgrounds or views of the sea.
– Product marketing e.g. company A is selling gadget x.
• This kind of marketing tries to make us thing that gadget x is better than gadget y.
• Being better includes environmental issues too!
– Marketing can be and often is mixed e.g. “green” company A is selling “green”
gadget x.
• This can make it hard to perceive the real “greenness” of a product.
• Advertising is:
– Information
• Without information how could you know about the new greener gadget x?
– Feelings, visions etc.
• You get the nice feeling of doing something good for environment…
– Propaganda
• If you don’t buy the green gadget x (and keep buying gadget y) – YOU ARE HARMING this
planet, flying squirrels next door, the life of your potential grand children etc.
Green Ads – For and Against
• Green marketing – why?
– Without any information on better (e.g. environmental friendly) products we
keep on buying the old more polluting, less sustainable etc. ones.
• This problem is similar to any new technology or products.
• New eco-friendly products can become common place or even be seen as a standard for all
production.
– A producer is willing to donate money to nature protection etc., if this means
increased sales.
• This usually includes even other commitments for the environment.
– Even disregarding climate change the mankind is overusing the available
resources – so even propaganda can be positive.
• This can also lead to more development – for example electric cars are a hit these days!
• If green is popular enough everyone will come to the bandwagon.
• Green marketing – is it really necessary?
– Isn’t it the job of governments and different organizations (like Luonto-Liitto in
Finland) to spread the message of conservation, eco-friendliness etc.?
• Does it really reach anybody else than those that already believe?
Green Ads – For and Against
– An organization not connected to a company can ask for donations and use them
all for nature protection.
• But how many will donate?
– Couldn’t we be forced to be more “green” by legislation?
• Yes, but does the legislator always know best?
• What is the role of market economy and efficiency?
– Doesn’t marketing in itself use resources?
• Marketing is – even though it can be somewhat green – mainly a message from a company. It’s
aim is only partially to increase eco-friendliness etc.
• Isn’t marketing cheap compared to overuse of resources because of old technology?
• Green marketing – why not?
– Information versus disinformation and lies.
• Marketing is done in the interest of the company selling gadget x. And money talks.
– Yes, it is green, but compared to what?
• Do we for example need “green formula one racing”?
– Marketing aims increasing consumption so does it really help us manage global
resources better?
• By using an old gadget z to the end of its “lifetime” we can actually be more environmental
friendly than by buying new gadget x.
• Giving 1 or 2 cents per sale for nature protection can make considerable amount of money, but
increased sales can lead to worse use of resources, more pollution etc.
Green Ads – For and Against
• Green marketing – in balance:
– Nobody wants to get rid off marketing totally – so green issues in marketing can
be positive.
• But only if they are true!
– The mindset of consumers and companies cannot be changed overnight. Thus
we have to have more “green information”.
• Again only true information!
• Also how do the companies know what should be really put forward? Different scientist have
different opinions on what the real and most important issues are:
– Global warming?
– Population explosion?
– Over fishing?
– The Baltic Sea? Atlantic Ocean? Pacific Ocean? Amazon rainforest?
• Doing something is still better than doing nothing in most cases.
– How to get rid off the marketing that claims to be green but isn’t?
• Marketing always follows popular trends as that is the way to get the message trough.
• This is really where we need legislation and controls to keep us from being misled.
What is Green marketing in a nutshell?
• The International Chamber of Commerce states:
– “A “green” or “environmental” claim is any type of claim where explicit or implicit
reference is made to the environmental or ecological aspects relating to the
production, packaging, distribution, use/consumption or disposal of products.
Environmental claims can be made in any medium, including packaging, labeling,
package inserts, promotional and point of sales materials, product literature, radio
and television, as well as via digital or electronic media such as e-mail, telephone
and the Internet.”
•
•
•
•
As in all marketing the media used doesn’t matter.
Also “implicit”, hidden messages are marketing.
Marketing can cover any aspect of the product during its lifetime.
Green claim can cover just one aspect of the product which is green. Other aspects might be “black”
and this can be allowed (depending on whether marketing as a whole gives misleading picture or not).
• See also the new guidelines published in summer 2011.
– “A green claim can also communicate information about the environmental impact
of a company’s manufacturing practices, as well as the company’s mission and
values regarding its impact on the environment. Such claims may refer to a “carbon
neutral” production process, or a company’s efforts to make its administrative
functioning more environmentally “sustainable.” “Green” claims can include
pictures, colours and logos as well.”
• Green marketing also includes image marketing.
Green Marketing and the Law
• What are the rules on environment and marketing?
– There is nearly nothing direct in either CPA or UTL.
• According to CPA 2:2 § “marketing is contrary to general values of the society”, if it
approves action that could potential damage the environment and there is no acceptable
reason with regard to the product in question for this kind of marketing.
– It is possible to show for example how a oil-cleaning product works by pouring a little oil
on the ground or water in a controlled situation.
– This only came to force in 2008 so there is no court cases.
– To my knowledge there is nothing direct in Germany (not in UWG anyhow) or
UK (not in CPR anyhow).
– The reason for this “no show policy” is probably similar to ICC’s statement:
• “While some have termed false, deceptive or misleading environmental claims
“greenwashing,” they are no different from any other type of deceptive or misleading claim in
marketing communications.”
• Is this argumentation acceptable today?
– Everyone agrees that the importance of environment is growing in marketing. It contains
many types of claims which are very hard to understand for the consumer.
– But if the present system does work – why regulate more?
Green Marketing and the Law
• Starting point is that is must be marketing.
– Marketing is a message which is aimed at general public or even an individual
outside the company.
• So called “intern marketing” is marketing in legal sense.
– Is for example a text stating company’s green goals and achievements in this
field in its annual report marketing?
• Basic answer is no.
• This limit is usually not too tight as anything that can be given to customers (and even orally
given information) could be marketing.
• If an annual report is used in advertising – it is marketing material.
– An interview given by a CEO in TV or newspaper is not advertisement.
• If the media is up to its job, making false environmental claims in an interview should have
similar results to harakiri.
• Indirectly environmental issues are affected by marketing legislation
as the general demand of truthful marketing applies to these issues
too.
– This only concerns cases where a claim of certain environmental aspect has been
made.
Green Marketing and the Law
• These are so called “claims on facts” such as “our product a is bio-degradable”.
• In the English law a commercial practice is misleading: “if it contains false information and is
therefore untruthful”
• In the German UWG the starting point is similar: “Eine geschäftliche Handlung ist irreführend,
wenn sie unwahre Angaben enthält oder sonstige zur Täuschung geeignete Angaben …
enthält“.
• For example Firm A’s advertisement claims that their product is 100 % recyclable.
– One problematic area is general claims as they might not deemed to be factual
claims at all.
• For example “superlative” claims (e.g. “our product a is the best”) can at times be accepted as
“merchant talk” which everyone knows is just boasting. This is not deemed to be a claim on
facts.
– Should this be accepted for any “green claims” like “the greenest company around”?
• If a claim is clearly made on a fact, then it is only misleading if it is too vague.
• In ICC Code these are forbidden.
– An interesting comparison is food.
• Any statement that food has medical properties or specially good nutritional capabilities is
illegal, if the statement is not mentioned in an EU wide list kept by the Commission.
Green Marketing and the Law
• If “green” aspects are used only to give a good feeling, they aren’t
claiming anything about any facts on the product to be marketed.
– Pure image marketing could thus be green even though the company in question
is rather black.
• However, if this gives a misleading picture of the company and its products, it can be illegal.
– Also the backgrounds of adverts are not “false information” even though their
impact might lead to false conclusions.
• For example in most TV-ads for cars they cruise along country lanes with nice green views all
around.
– Could this lead to the conclusion that the car is somehow “green”?
– If consumers tend to make wrong conclusions because of the add, then it could be
misleading.
– The demands of ICC Code are again stricter.
– As soon as it is a question of statement of the product which can be measured on
scale “truth – false” it is a claim on facts and must be truth.
• The truth can never be only in the eye of the beholder!
– Every statement of the facts must be able to be proven to be truth.
• Remember, even half truths can be misleading.
Green Marketing and the Law
– If for example company A states that its new car model is the most eco-friendly car the
company has ever manufactured, can this be allowed when the car in fact is worst polluter
in its class?
– The deciding point is what is the message altogether. Company A’s “green add” surely
implies that the car is really green.
– The law doesn’t demand outside proof, so even a company’s own research can
be enough.
• Outside and non-partial proof by research or testing should be the rule though.
• Any tests should be recorded and available even to the public so everyone can verify.
– The material should be in a form that everyone can understand. Otherwise these test
results could in themselves be misleading marketing.
– Business secrets can naturally be kept out.
• The above mentioned demand for “truth” applies to comparative
marketing, but there is a difference.
– For example Firm A claims that product x has a longer lifecycle than Firm B’s
product y.
• The problem from environmental viewpoint is that x can have a very short lifecycle and if it is
still better than y, then A is telling the truth.
– For a comparison to be acceptable it must be done against current and similar
products and also on issues that are really relevant for consumers.
• Against an old product any new product is probably very “green”.
GM: Finnish Case Law
• Market Court Case MAO:73/03:
– This case dealt with insulation material. In a brochure the seller used statements
like ”safes the nature” and that production of wood based insulation material
consumes least amount of energy compared to other insulation material
production.
– The Court stated that this products impact to nature was less than most of the
competing products, but like any industrially produced product it had an impact
on nature. There wasn’t enough proof from the producers on the issue of energy
consumption in the production to show that their claims were truth. The
marketing was contrary to good business practices.
– An open claim like “safes the nature” can only be proven if the products impact
on nature is neutral or positive. It is possible that the Court followed an older
ICC Code even though it is not said so in the judgement.
• Market Court Case MAO:239/03
– A company used expression ”eco-wood” for certain decorative detail parts in a
car even though the material used was plastics.
GM: Finnish Case Law
– The Court stated that the expression “eco” has different meanings in different
circumstances. In most cases “eco” means ecological and this normally means
natural. In this case “eco” meant the material that was used for the decorative
parts. The Court accepted that impressions can be important for something like
the decorative car parts in question. In the brochure in question the term “ecowood” was used for a plastic part that looked like real wood.
– In the Courts opinion the advertisement aimed at making the decorative parts to
look more valuable than they were. The marketing was contrary to good
business practices.
– The relatively funny aspect in this case was that the company in question
claimed that plastic is more eco-friendly than real (scarce) wood.
• Market Court MT:1994:12:
– The company had used “environmentally friendly” when marketing fireplaces.
There was no proof that these products had any less impact on environment and
that they thus were more environmentally friendly than other fireplaces. The
marketing was contrary good business practices.
GM: ICC Marketing Code
• ICC Codes are non-binding codes on the best practices for
undertakings in marketing.
– The environmental issues are governed mainly by “Advertising and Marketing
Communication Practice. Consilidated ICC Code.”
• Section E governs environmental issues.
• The Code main text demands responsibility:
– Art. 22 “Marketing communication should not appear to condone or encourage
actions which contravene the law, self-regulatory codes or generally accepted
standards of environmentally responsible behaviour.”
• What about the basic idea of marketing: Sell MORE! Can marketing be for example
“downsized” if it leads to overuse of natural resources?
• Is it responsible behaviour to advertise products as green on one aspect, if the production needs
oil-based materials (or similar materials that do not grow back)? What about energy levels?
– At the moment this is not the case as we have no real standards for what is in real terms
green.
– ICC Code doesn’t demand such overall “greenness”.
• Even here the basic requirement is the truth.
GM: ICC Marketing Code
– Article E1: “Marketing communication should not contain any statement or
visual treatment likely to mislead consumers in any way about the
environmental aspects or advantages of products, or about actions being taken
by the marketer in favour of the environment.”
• Misleading means here the demand for truthful statements.
• A claim of a company or industry being “green” should only be made,
if it is so.
– “Corporate communications may refer to specific products or activities, but
should not imply without justification that they extend to the whole performance
of a company, group or industry.”
• Under this Code image marketing that states that company A is green, environmentally friendly
etc. is forbidden, if the company cannot proof that it is all of the above.
• Rather interestingly the Code is very negative on vague claims:
– “In particular, claims such as “environmentally friendly” or “ecologically safe”,
implying that a product or an activity has no impact – or only a positive impact –
on the environment, should not be used unless a very high standard of proof is
available.”
GM: ICC Marketing Code
• This means that the whole lifecycle of the product or activity must be taken into account.
• “Environmentally friendly” could be seen as a statement that a company is and aims to be even
more environmentally friendly. It is unclear, if this kind of statement would be prohibited under
Finnish Law.
• What about products that are clearly more “green” than others on the market? Aren’t they
“environmentally friendly”?
– In my opinion the acceptability depends on how marketing is done and what is
the overall expression of it.
• If everyone understands that product x is simply a bit “greener” than other available products, I
would allow the company to label it “ecologically best available” or even “environmentally
friendly choice”, if it is clear that the company is committed to more and more greener
production.
• “The greenest product available” would perhaps be too far as it conveys a message of
something already very green.
• Another interesting point is sustainability:
– “As long as there are no definitive, generally accepted methods for measuring
sustainability or confirming its accomplishment, no claim to have achieved it
should be made.”
• As claims on extended life and recyclable etc. are accepted, it is not clear why sustainability is
not accepted as being the same as “ecologically safe”.
GM: ICC Marketing Code
– In a recent statement ICC says: “As with other types of environmental marketing
claims, avoiding vague and non-specific claims is key. Sustainability claims
pursuant to compliance with well-defined programs, backed by verification
procedures or audits, may meet this exacting standard.”
• So their position has not changed.
• ICC has also published a checklist.
– “This checklist is intended to assist advertisers and advertising agencies in
identifying when they are making an environmental claim, and offers guidance
on questions about such advertising.”
• See ICC website.
Guidelines for the Lecture
• Available options:
– An extra point for the test ”Commercial Law”
• Just one point to be counted with the results of the test. Not an automatic extra grade.
– A short essay (5 pages) about the topics addressed in the lecture gives 2 ECTScredits for “Commercial Law / Marketing Law” with grade 3 (the course will be
marked only as passed and thus everyone who passes receives the same grade).
• The essay should include:
– What is the law of marketing in your home country on the subjects discussed?
– What are your opinions on the subject?