As a small business owner in Western New York, you are subject to the same regulations as large corporations. Even if you’re starting out on a small level and planning to grow, you must comply with business laws and regulations from the day you open for business.
Understanding Advertising Law
You’ve got a great product or service to sell, and you’re anxious to begin promoting it to potential customers. To make sure the claims you make about your offerings are truthful and to protect consumers, all businesses have to comply with advertising and marketing laws. This article will help you understand the basic rules when it comes to advertising, labeling your products, and marketing online or over the phone.
Truth in Advertising
Advertising laws are aimed at protecting consumers by requiring advertisers to be truthful about their products and to be able to substantiate their claims. All businesses must comply with advertising and marketing laws, and failure to do so could result in costly lawsuits and civil penalties. So before you start an advertising campaign, it’s important you understand some basic rules.
The Federal Trade Commission (FTC) is the main federal agency that enforces advertising laws and regulations. Under the Federal Trade Commission Act:
- Advertising must be truthful and non-deceptive
- Advertisers must have evidence to back up their claims
- Advertisements cannot be unfair
Additional laws apply to ads for specialized products like consumer leases, credit, 900 telephone numbers, and products sold through mail order or telephone sales. State and local governments also regulate advertising, and enforcement is usually the responsibility of a state attorney general, a consumer protection agency or a local district attorney.
Product Labeling
Did you realize that the label and packaging on products you create or sell are forms of advertising?
Because of this, the claims that you make on product packaging must comply with some basic truth-in-packaging and labeling rules. These claims include descriptions of ingredients, package size and volume, and discount or lower price labeling. Under the Fair Packaging and Labeling Act (FPLA), the Federal Trade Commission (FTC) and the Food and Drug Administration (FDA) issue regulations requiring all consumer commodities be labeled to disclose net contents, identity of the product, and the name and place of business of the product’s manufacturer, packer or distributor.
Below are guidelines you need to know to comply with these regulations.
General Product Labeling Rules
Provides the basic requirements and exemptions under FPLA.
Offers a how-to guide and enforcement policy statement for making “Made in USA” claims on product labels.
Labeling Rules for Specific Products
Food Advertising and Labeling
Clarifies the requirements for product name placement, size, and prominence in labeling and advertising for human and animal prescription drugs and biological products.The FDA regulates food labeling in the United States and also has authority over the labeling of dietary supplements, cosmetics, drugs (both prescription and over-the-counter), medical devices, devices that emit radiation, animal foods, drugs and cosmetics. The FDA regulates both the nutritional labeling of food products, but also the advertising of food and drugs.
Explains how advertisers must comply with laws concerning unfair or deceptive practices and must be able to substantiate claims made for dietary supplements.
Appliances and Electronics
Covers Section 137 of the Energy Policy Act of 2005, which requires the FTC to examine the effectiveness of current energy efficiency labeling requirements for consumer products issued pursuant to the Energy Policy and Conservation Act.
Lists questions and answers to help manufacturers comply with the Appliance Labeling Rule.
Provides current energy efficiency labeling requirements for consumer products issued pursuant to the Energy Policy and Conservation Act.
Textiles
Explains several labeling acts, including the FPLA, Textile Fiber Identification Products Identification Act & Wool Products Labeling Act of 1939, Care Labeling Rule, Revised Leather Guides, generic fiber petitions, and Cashmere Labeling Conference.
Advertising Specific Products
The federal government regulates the advertising and labeling of a number of consumer products. If you manufacture or distribute one of the products below, you will need to comply with some specific requirements.
Alcohol Beverages
- Alcohol Advertising, Labeling, and Formulation
Details all regulations affecting the labeling, packaging and advertising of alcoholic beverages, including COLA requirements. - Alcohol Beverages Labeled With Organic Claims
Information regarding the National Organic Program and its standards for the production, handling, processing, labeling, and marketing of products labeled with organic claims. - Wine Appellations of Origin
Information about the appellations of origin requirements and lists of authorized appellations of origin in the United States and Chile. - Advertising Distilled Spirits Containing Ingredients Associated with Non-Alcohol Energy Drinks
Reminds members of the distilled spirits industry of their advertising requirements under the Federal Alcohol Administration Act. - Advertising Malt Beverages Containing Ingredients Associated with Non-Alcohol Energy Drinks
Reminds members of the alcohol industry of the advertising requirements for malt beverages. - Advertising Wines Containing Ingredients Associated with Non-Alcohol Energy Drinks
Reminds wine advertisers of their responsibilities under the Federal Alcohol Administration Act.
Automobiles
- A Dealer’s Guide to the Used Car Rule
Defines the requirements of the rule, explains how to prepare and display a Buyers Guide, and offers a compliance checklist. - Guidelines for Advertising NHTSA Crash Test Ratings for New Cars
Provides a guide for auto manufacturers and dealers on how to promote crash test ratings in advertising.
Computers and Internet Services
- Advertising and Marketing on the Internet: Rules of the Road
Explains Federal Trade Commission rules and guidelines that protect businesses and consumers, and helps maintain the credibility of the Internet as an advertising medium. - CAN-SPAM Act: Requirements for Commercial Entities
Covers the CAN-SPAM Act of 2003 (Controlling the Assault of Non-Solicited Pornography and Marketing Act), which establishes requirements for those who send commercial email. This Act spells out penalties for spammers and companies whose products are advertised in spam if they violate the law, and gives consumers the right to ask emailers to stop spamming them. - Dotcom Disclosures
Describes the information businesses should consider as they develop online ads to ensure that they comply with the law.
Health and Fitness Products
- FDA Guidance for Industry Consumer-Directed Broadcast Advertisements
Offers guidelines for the television and radio advertising of drugs and other pharmaceuticals. - Marketing of Refractive Eye Care Surgery: Guidance for Eye Care Providers
Provides guidance to eye care providers that market their professional services.
Housing and Real Estate
- Advertising Consumer Leases
Explains the requirements for advertising consumer leases, which must comply with the streamlined rules for lease advertising found in the Consumer Leasing Act (CLA) and Regulation M. - Fair Housing Advertising
Provides rules in advertising housing opportunities. The provisions of the Fair Housing Act make it unlawful to discriminate in the sale, rental, and financing of housing, and in the provision of brokerage and appraisal services, because of race, color, religion, sex, handicap, familial status or national origin.
Telephone Services
- Complying with the 900-Number Rule
Explains how you can comply with the FTC’s 900-Number Rule, if you operate a pay-per-call service or provide billing for a pay-per-call service. - Federal Trade Commission Guide to Marketing Telephone Services
Offers a guide to regulations and policy statements for providers of pay-per-call and other telephone services. - Joint FTC/FCC Guides on Long Distance Advertising
Covers regulations for the advertising of long-distance phone services to consumers.
The above information is an excerpt from an article entitled Understand Business Law & Regulations published by the U.S. Small Business Administration. The full article can be found here.