Online marketing law: What companies and marketers need to know

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Every company especially small businesses now realise that online presence is no longer an option or reserved for tech companies and startups. Due to the Covid-19 crisis, online branding is a ‘do or die’ decision for brick and mortar companies affected by the lockdown crisis. Every day, traditional businesses are shifting their focus to sell and market their products and services to be sold directly to customers online.

If you are a company, an influencer or an online marketer helping these companies sell their products or services, do you know if your online marketing efforts are legally compliant? Take a look at this quick online marketing legal primer.

1. Know your business

An easy way to know if you have to pay extra attention to your client is to find out if the client’s business is in a regulated space.

Regulated industries like banking, healthcare, pharmaceutical, and food products have to comply with additional marketing and advertising restrictions. They are designed and imposed by regulators to protect the general public from any misrepresentation or false advertising.

If you’re designing an online campaign for a supplement company, certain ads or contents may need to be vetted and approved by the Health Advertising Board under the Ministry of Health. This is to avoid any misrepresentation or false advertising claims.

So if you will be dealing with a regulated business, you should check if your client may already have a branding guidelines which includes the dos and donts when it comes to online marketing.

2. Know the basics of personal data protection laws

All companies now need to comply with the personal data protection laws.

Essentially, they are a set of rules that companies need to follow so that the customers’ personal data are used in accordance to what they’ve promised to the customers as set out in the privacy policy or in the personal data protection notice.

Many countries now have their own version of personal data protection laws in place. All Southeast Asian countries with the exceptions of Cambodia and Bangladesh have their own respective personal data laws.

Without going through the specifics, you should at least know the differences between a ‘data user’ (ie a company that obtains personal data like full name, date of birth, contact details and so on) and a ‘data subject’ which is a customer providing the personal data.

As a marketer, unless there is a clear consent by a customer, you should be careful when posting contents that may contain personal information belonging to customers as they may be a breach of personal data protection laws.

3. Know consumer protection laws

If you will be promoting products or services, take note of the consumer protections laws as well.

For instance, Malaysia has the Consumer Protection Act 1999, which protects consumers against a range of unfair practices and enforces minimum product standards. The scope has been updated to cover ecommerce transactions and additional safeguards to protect consumers from unfair terms.

To cater to the growing ecommerce platforms, online sellers need to put up certain necessary disclosure to ensure consumers can make an informed decision before they buy a product online.

For example, in Malaysia, someone who is selling an online product needs to include:

  • name or name of the company or name of the business that operates the online business
  • company or business registration number, if applicable
  • contact address (email, telephone and address of the person or company
  • description of the goods or services provided
  • the full price of the goods or services. This must include shipping cost, tax and other costs that the seller intends to charge the buyer.
  • payment method
  • terms and conditions for the sale
  • the estimated time of delivery for goods purchased, which must include estimated time for all shipping options that you have offered, if any.

A company commits an offence if it fails to comply with any of the above disclosure requirements. This also includes if you gave false or misleading information to the public.

An unhappy consumer can file a claim with the Tribunal for Consumer Complaints. If the claim is successful, the company may be liable for a penalty imposed by this tribunal.

4. Know the local online contents regulations

Depending on where you operate your online marketing business, there may be local online contents regulations that you need to follow too.

In Malaysia, the Malaysian Communications and Multimedia Commission (MCMC) is a statutory body tasked to regulate the information technology and communications industries. To summarise, they regulate online speech, providing that “no content applications service provider, or other person using a content applications service, shall provide content which is indecent, obscene, false, menacing, or offensive in character with intent to annoy, abuse, threaten or harass any person”.

Online marketers of media content in violation of this provision may face criminal penalties.

The Act also enabled the establishment of the Communications and Multimedia Content Forum of Malaysia, which formulates and implements the Content Code – voluntary guidelines for content providers concerning the handling of content deemed offensive or indecent.

5. Have a formal engagement in place

Every influencer or online marketer should sign a formal engagement letter (send us an email for a free template) in place.

The engagement letter is a formal agreement setting out the expectations between the parties. Things like the scope and the fee can be set out in the document.

This will also let people know that you are serious and professional about what you’re doing. Many marketers make the mistake of not having an engagement letter in place, and end up having disputes later on when the client may have a different expectation on the scope of work to be delivered.

A good engagement letter should have the following commercial terms:

  • Clear description of the scope of work including timelines for the deliverables
  • Guidelines for acceptable postings and comments
  • Client agreeing to give access to social media accounts
  • Granting the limited licence by the marketer to use the client’s logos or brands
  • Contingency plan in the event of disaster
  • Obligation to report of any incident
  • Deliver up of account and materials upon termination
  • Indemnity by the client to the marketer

When it comes to intellectual property rights, it may also be worthwhile to take a look at our earlier guide on protecting your intellectual property rights for startups and technology companies.

6. Have a brand guidelines

Every company should have brand guidelines. This helps set out clear expectations on how a company’s collateral and digital assets can be published and used by third party online marketing or social media houses or influencers.

Online marketing will be the ‘new normal’ for companies. And the online marketing laws exist to promote a level playing field that is fair for all.

Feel free to book a free 30 mins initial consultation call with our technology lawyer to find out more on how we can help you craft a good engagement letter and navigate online marketing laws in Malaysia.

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