In May last year the UK introduced the EU's Unfair Commercial Practices Directive and thereby implemented two pieces of legislation - the Consumer Protection from Unfair Trading Regulations 2008 and the Business Protection from Misleading Marketing Regulations 2008. All small businesses need to ensure that their company is trading within these pieces of legislation.

The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) prohibit five categories of practices which are deemed to be unfair.
  • Misleading actions - such as advertisements which involve false information or are likely to deceive
  • Misleading omissions - where traders omit or provide ambiguous information about their product or service
  • Aggressive practices - including the use of harassment, coercion or undue influence
  • Breaches of professional diligence - where business traders are expected to adhere to certain standards which go hand in hand with honest market practice and the principle of good faith
  • Blacklisted practices - the Regulations outline 31 practices that are prohibited including activities such as copycat marketing, posting fictional customer reviews on your own website and falsely describing products as ‘free' to name just three.
The Business Protection from Misleading Marketing Regulations 2008 provides protection to other traders, rather than to consumers. Traders are still prohibited from engaging in misleading or deceiving actions that may damage their competitors, both financially and competitively. The regulations also outline under what circumstances a trader can produce publicity comparing their products with their competitors.

Penalties
As well as an attempt to crystallise consumer protection legislation across Europe, the Unfair Commercial Practices Directive is a response to the explosion in social media and misleading online marketing techniques such as ‘astro-turfing' (websites used to create a false impression of grass roots support for an issue) and ‘sock puppetry' (posting entries under several different names to make something look more popular that it really is).

Given the wide extent of the Regulations, it is crucial that all manner of businesses take steps to understand the implications of the legislation and
Any breaches of the legislation may result in enforcement orders and criminal prosecutions.
assess their current trading practices to ensure compliance by themselves and their staff. Those who fall foul of the regulations run a real risk that they will be prosecuted. Any breaches of the legislation may result in enforcement orders and criminal prosecutions. Offenders may face an unlimited fine and up to two years imprisonment upon a conviction.

Top tips to ensure you comply with marketing legislation:
  • Do not make a statement - unless you can verify that it is true.
  • Comply with all applicable codes - e.g the Advertising Standards Authority's CAP codes. One way to avoid being deceptive in your advertising is by being very selective about the use of absolute statements or words like "always" and "never"
  • Make sure you provide all necessary information - when displaying goods for sale. For example the price must always be clearly visible when inviting consumers to purchase a product
  • Be aware of the blacklist! - This is a list of 31 practices which will be prohibited in any circumstances. It will be important for businesses and marketers to be familiar with the list as it prohibits some existing common practices.
  • Do not deliberately mislead the consumer - by producing products or trademarks that mirror a competitor with the aim of confusing the consumer.
  • Have strict due diligence procedures in place - to make sure that the advertisements you use to promote your goods or services will not in any way mislead your audience. Or if they are close to the line, then you will be able to identify where the line lies and confidently refute any challenges.
  • Awareness - deliver an in-house training programme to ensure all your sales team and in-house personnel are aware of the regulations. Identify who it is who is responsible for compliance - it could be you.

Browne Jacobson has produced ‘The Clarity Guide to Marketing Law', a free reference tool offering businesses practical advice and guidance. Download it free at www.brownejacobson.com/marketinglaw.