April 1, 1999 | Response Magazine

Web Marketers Self-Regulation and Privacy

4 min

Previously published in Response magazine

They say that nature abhors a vacuum. Well, so does the government. And soon after the World Wide Web was created, the government began to fill the regulatory vacuum that existed for a brief time in cyberspace.

It's probably pure fantasy to think that the Web will ever be entirely free of intrusive government regulations. But meaningful self-regulation by Web marketers can result in less government interference in their business. Government agencies like the Federal Trade Commission have made it clear that they welcome responsible self-regulatory efforts.

One hot-button issue that is being addressed through industry self-regulation is online privacy. The FTC began beating the drums over the perceived misuse of personal data collected online by Web marketers a long time ago. Rather than issue command-and-control regulations to protect online privacy, officials at the FTC and other government departments held off in the hope that industry groups would come up with voluntary programs. And groups like the Council of Better Business Bureaus, the Direct Marketing Association, and the Online Privacy Alliance have stepped forward to fill the regulatory void by encouraging businesses to post online privacy policy disclosures and taking other steps to allay consumer concerns.

Of course, privacy is not the only consumer protection issue in cyberspace. The Electronic Retailing Association recently issued online marketing guidelines that represent the first attempt to come up with truly comprehensive self-regulatory standards for Internet marketers.

First Comprehensive Online Marketing Guidelines

Many of ERA's proposed guidelines apply not only to Web marketers, but also to marketers who use traditional media. For example, the guidelines prohibit deceptive or unsubstantiated advertising claims, and require marketers who offer money-back guarantees to honor their guarantees promptly when they receive requests for refunds -- which are principles that were around long before anyone had heard of the Internet.

The new guidelines also prohibit marketers from hitting their customers' credit cards or debiting their checking accounts if they have insufficient inventory on hand to fulfill those orders.

But other guidelines are directed specifically at Web marketing issues. As we reported last month, some FTC staffers have suggested that typicality ("Results will vary") or other legal disclosures must appear on the same screen as the claim that triggers them -- in other words, consumers shouldn't have to scroll down or click on a link to find such disclosures. The ERA's more flexible standards say that required legal disclosures must be readily noticeable, legible (or audible), and understandable -- in other words, they must be "easy to find, easy to read, and easy to understand" -- but do not prohibit the placement of disclosures on linked pages, or require marketers to make consumers click on an "I understand" button every time a legal disclosure is presented to them.

Guidelines Address E-Mail Advertisements

The ERA guidelines also include standards for e-mail advertisements. Web marketers can't send e-mail advertisements that purport to be something other than advertisements, and must not misrepresent their identities or e-mail addresses. And e-mail advertisements can be posted to newsgroups, listservs, chat rooms, or other online forums only when doing so is consistent with that forum's policies.

ERA hopes that its online marketing guidelines will encourage fair, ethical, and responsible marketing practices and promote consumer confidence in electronic commerce. Whether you're an ERA member or not, you're free to follow the principles set forth in those guidelines. (You can find the guidelines on ERA's Web site at www.retailing.org.) If you see to it that your marketing, fulfillment, and customer service practices live up to the ERA standards, you'll have happier customers -- and you'll greatly reduce the chances of a government investigation into your business practices. And if enough Web marketers follow those guidelines voluntarily, our industry may avoid being saddled with the kind of government-imposed rules and regulations that burden the telemarketing industry and many other businesses.

Now if we could only do something about taxes . . .