How to stay within international law on the Internet

Folio: The Magazine for Magazine Management, Jan, 1998 by Lewis Rose, John Feldman

The international aspect of the Internet presents yet another challenge for magazine publishers seeking to sell advertising on their World Wide Web sites. When a publisher displays advertising or a sales promotion on a server in Chicago, Boston or New York, that advertising or promotion may be accessed throughout the world. From a legal perspective, the question is whether countries other than the United States can exert jurisdiction over advertising or promotional material that is deemed unlawful by that foreign country.

In a widely publicized move, CompuServe Inc. blocked access by its subscribers around the world to over 200 sexually explicit Usenet discussion groups and picture databases in response to a charge by a federal prosecutor in Munich that the material violated German pornography and child-protection laws. In effect, the legal and ethical standards of one country's government dictated what the world could access. The CompuServe case illustrates how information uploaded onto the Internet in one country can elicit a negative legal response in another country.

Foreign entities have also felt the effects of "worldwide" advertising on the Internet. The British carrier, Virgin Atlantic Airways, advertised over the Internet that a 21-day advance-purchase ticket fare between Newark and London was $499 on weekdays during certain travel periods. In a separate section of its site, Virgin Atlantic advised consumers to check with reservations or a local travel agent for the latest fare and availability, and any taxes, charges or restrictions. The U.S. Department of Transportation slapped the British company with a $14,000 fine for failing to disclose clearly that a tax of $38.91 applied to each ticket. Whether or not the advertising met legal standards in Great Britain, and regardless of where Virgin Atlantic's Internet server was located, the U.S. Government successfully asserted jurisdiction over advertising that could be downloaded to a personal computer in the United States.

In the case of an Internet service provider, one could argue that because the provider does not have control over the information posted on a bulletin board, it has no knowledge of and no reason to know when objectionable material is on its system. An Internet magazine publisher, by contrast, does not have that argument. A publisher will be deemed to control what goes onto a site, and consequently faces a stronger risk of liability for the content -- both editorial and advertising -- of an Internet magazine.

This chilling realization has not necessarily frozen Web publishers or advertisers out of their sites. Even in the face of worldwide exposure, some U.S. advertisers and marketers choose simply to ignore foreign laws, taking the ill-advised position that if the advertising has been cleared in the United States, it will probably pass muster in other countries. That may not be true. Countries, such as Germany, that prohibit comparative advertising or that may have different standards regarding sexually explicit advertising, could challenge the advertising and could initiate an action to have it banned. Some countries, such as France, have strict language requirements. The rules of a consumer skill contest open to French residents must be in French, for example. Other countries, such as those that have adopted versions of the European International Code of Advertising Practice of the International Chamber of Commerce (the "ICC Code"), may regulate the "decency" of a particular advertisement much more stringently than any regulatory body in the United States.

Clearing the way

It is the rare advertiser or publisher who has the resources to conduct a comprehensive, international clearance program for an advertising or promotion -- but there is an alternative. A reasonable approach is to pick the key foreign markets targeted by the ad or promotion, and clear the material in those countries.

How do you conduct an international clearance? The first task is to make sure your advertising or promotional materials (e.g., contest or sweepstakes rules) conform to U.S. law. Then, collect the names and fax numbers of counsel in the key countries where your advertising will be seen. (Your U.S. counsel may be able to suggest colleagues overseas, especially if he or she handles foreign clients.)

The most important step comes next: preparing the instructions for foreign counsel. The package of material should contain three components: your advertising or promotional package; a cover letter discussing timing and fees; and a questionnaire. The questionnaire should be carefully designed to elicit the precise information you need. For example, every questionnaire should include the ultimate question, "Can a publisher/ advertiser run this advertisement in your country?" This should be followed by "What changes, if any, should be made to the advertising in order for it to conform to your country's laws?"

Depending on the type of advertising or promotion involved, you may want to include specific questions on a variety of specific topics: comparative advertising; environmental claims; charities; educational institutions and courses; financial services; loans and credit: toys and children's advertising; travel; lotteries/sweepstakes/contests; privacy and data protection; mail-order and direct-response promotions; premium offers; portrayal of women/minorities; testimonials/endorsements; special products (e.g., alcohol, cosmetics/hygiene products, nonprescription drugs or tobacco); language requirements; decency; denigration; intellectual property; guarantees.