How to stay within international law on the Internet

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

As you develop your questionnaire, keep in mind that many foreign attorneys practice very differently from U.S. lawyers. In countries with traditions of civil law (based on statutes rather than judges' decisions), lawyers tend to view the law restrictively. Thus, if a particular statute does not expressly permit a certain type of advertising or promotion, some foreign counsel may tell you that your ad is unlawful. Press your foreign counsel by asking pointed questions about what action the authorities could take against your advertising or promotion, and what changes to the material are necessary for it to fit into a sanctioned, permitted activity.

Once you have cleared your key countries, what do you do about the rest? For promotions such as sweepstakes and contests, marketers in Internet-based magazines should clearly state where entrants must reside. Most current, Internet-based prize promotions are limited to U.S. residents. Although residents of a foreign country may access the promotional material, they will not be able to participate.

Disclaimers are increasingly being used in financial services advertising. Mutual fund and other securities advertising, regulated by the SEC, often limit access to residents of a state in which the security has not been registered or for which an exemption from registration is not available. Disclaimers should work equally well on the international level, even for consumer goods such as cigarettes, food, cars and alcohol.

Assuming that your ad violates the collective morals, or the laws, of a country somewhere in the world with access to the Internet, what are the risks? If you plan to do business in that country, the risks can be substantial. Penalties, fines, damages and conceivably a ban on your product or service are all possible. If you do not do business in that country, and you do not have any assets in that country, your risk of being dragged into court there are low.

Because many advertisers view the world as shrinking and the world economy as becoming increasingly integrated, making a reasonable attempt to consider the international impact of your advertising and promotional material, and to clear that material in key countries prior to its dissemination on the Internet, is only prudent.

Lewis Rose is a partner and John Feldman an associate with Arent Fox Kintner Plotkin & Kahn in Washington, D. C.