Introduction

This article is relevant primarily to internet marketers doing business in the United States.

Most new internet marketers seem to give little, or no, thought to complying with the state and federal laws which directly apply to them. That can be a costly mistake.

All of the applicable laws cannot be covered in a brief article such as this one. The goal here is to alert you to the laws which affect internet marketers so that you can do further research and discuss them with your own legal advisers.

What Laws Directly Affect Internet Marketers?

As mentioned, we can't cover everything here, but the following list contains some of the most important questions you should ask yourself about the legal issues facing you, as an internet marketer:

• Are You Complying With The Can-Spam Act Pertaining To Commercial Emails?
• Do You Know The Disclosures That The FTC Requires You To Have On Your Websites?
• Do You Know What You Can, and Cannot, Do With Testimonials?
• Do You Know What You Can, and Cannot, Do With Endorsements?
• What Are Common Mistakes You Must Avoid With Your Review Sites?

The Can-Spam Act

The Can-Spam Act, in its full glory is the "Controlling the Assault of Non-Solicited Pornography and Marketing Act." Boy! That's a mouthful.

Perhaps a better name for the Act would be the "Can't Spam Act," because Spam is what it seeks to control - unsolicited emails relating to pornography or commercial activity.

Very briefly, to comply with Can-Spam, emails you transmit must contain:

1. A clear and conspicuous identification that the message is an advertisement, and
2. A clear and conspicuous notice of the opportunity to decline to receive further messages from the sender, and
3. A valid physical postal address for the sender.

There are fines for violating the Can-Spam rules. What you may not realize is that those fines can be up to $16,000 per violation, and each email you send is a separate violation! Ouch!

FTC Rules Pertaining To Disclosures Of Financial Relationships

Many internet marketers are affiliate marketers. As such, you earn your income primarily from affiliate links on your websites which link to other websites and products which you are receiving commissions to promote.

The Federal Trade Commission expects you to disclose these financial connections in a "clear and conspicuous" way on your website in close proximity to the affiliate links. The days of burying your disclosures in tiny print in your footer or deep in your Terms of Service Agreement are over.

The Use Of Testimonials

In the infancy of internet marketing it was not uncommon for unscrupulous marketers to make up a bunch of testimonials purporting to praise the virtues of their products. Undoubtedly, some marketers continue in this folly to this day, oblivious to the potential legal problems they are inviting.

To make a long story short, if you use testimonials these days, they had better be legitimate and you'd better have proof of that fact to back you up when the FTC comes calling.

The Use of Endorsements

Endorsements are very much like testimonials, and the FTC rules are the same. If you show someone, a celebrity or not, endorsing your product, that had better be an actual current user of the product. You can't just pay someone to say they use the product when they don't.

Rules For Review Sites

Review sites are very common in the internet marketing world. I have no data to back this up, but my guess would be that somewhere around 90% of the reviews on review sites are written by internet marketers who have never used the product being reviewed.

The overriding principle under which the FTC operates is that your communications with your potential customers, whether that is accomplished through your website or by email, must be honest.

So many review site owners put up websites comparing and rating a bunch of products (for all of which they are affiliates). These "reviewers" either expressly or impliedly claim that their reviews are impartial and based on their personal knowledge of the products, when in fact they are neither impartial nor based on knowledge of the products being reviewed.

These marketers have a direct financial interest in the products being reviewed and many (dare I say, most) of them have never used the products, or even researched the products' features. Suffice it to say, this is a big No-No.

Summary

Don't be one of those people who start an online business without considering the legal requirements that apply to them. For some odd reason, many new internet marketers operate under the mistaken assumption that "anything goes" on the internet, and that the usual laws and regulations don't apply. That is a mistake you don't want to make.

It is advisable to do a more comprehensive review of legal issues that may affect you, and you should always discuss your legal issues with your personal legal advisor.

This article is designed only to alert you to some of the more important legal issues that affect internet marketers in general. Nothing in this article should be regarded as legal advice.