Avenue de Tervueren 270, 1150 Brussels Belgium
Contacts: Jan Ravelingien
Tel: 32.2.285.01.00
Fax: 32.2.230.33.39
Email: jan.Ravelingien@mvvp.be
Website: www.mvvp.be

INTERNATIONAL LEGAL ISSUES
IN
DIRECT RESPONSE MARKETING

Electronic Retailing Association Conference & Expo
October 14-17, 2001
Las Vegas, Nevada
USA

Introduction

This report is presented by the Global Advertising Lawyers Alliance ("GALA") to the Electronic Retailing Association ("ERA") in connection with its 2001 Conference held in Las Vegas, Nevada on October 14 - 17, 2001.

The purpose of the report is to present information from GALA members concerning laws and regulations applicable to direct response marketing in their home country which would be relevant to marketers in other countries. By "direct response marketing" we mean all forms of marketing involving a communication to a consumer that is designed to elicit a response from the consumer directly to the seller in the form of an order for that seller's products or services. Common forms of direct selling in the United States, e.g., include infomercials (generally thirty minutes in length), short form television commercials (generally two minutes in length), radio commercials, internet marketing, telemarketing, credit card syndication, direct mail, and product package inserts.

By necessity, this report can only touch on the broadest issues and concerns to the industry in any country. Clearly, this report cannot and is not intended to substitute for legal advice from an expert in the applicable laws and regulations. We believe that its value to marketers will derive from highlighting the issues that marketers should be aware of when considering whether to conduct a particular type of direct selling campaign in a given country. Nor is this report a substitution for local legal advice on specific marketing activities. Before engaging in any marketing campaign, a marketer should consult with legal counsel for advice on their proposed campaign.

Countries covered in this report include:

Australia Canada France Germany

Ireland Italy Singapore Spain

Sweden Switzerland United Kingdom United States

 

INTERNATIONAL LEGAL ISSUES IN DIRECT RESPONSE MARKETING: BELGIUM Marx, Van Ranst, Vermeersch & Partners Tweekerkenstraat 37, 1000 Brussels Belgium Contact: Jan Ravelingien Tel: 00.32.2.285.01.00 Fax: 00.32.2.230.33.39 Email: jan.ravelingien@mvvp-law.be

1. Lobbying 1.1 How can an association like ERA successfully lobby in your country to maintain a friendly regulatory environment? The legal aspects of advertising in Belgium (as well as in the rest of the Member States of the European Union) are increasingly, but not yet mainly defined by the European Union. Having pointed this out, the European Union has already harmonized to a great extent the legislation on different specific Trades Practices and Consumer Protection. Sales at a distance is the classic example. Therefore lobbying by ERA has to include both the European and national level. There are no noteworthy restrictions on lobbying activities in Belgium. 2. Laws and Regulations 2.1 Are any forms of direct response marketing prohibited in your country? In general any direct response marketing has to be recognizable as marketing and advertising and should be unmistakably recognizable as such, but direct response marketing is not prohibited if this technique is not tied to a purchase obligation. Some techniques that can entail the use of a direct response (although not necessarily so) are in general prohibited: games of chance, lotteries and sweepstakes in general. Direct response techniques using sales structures or promises of advantages to the respondents that bring in several more participants are prohibited if a pyramid structure arises behind the technique. In some fields of products and services, direct response marketing is heavily restricted and sometimes prohibited. Tabaco is an example. Direct response marketing that is part of a combined offering is possible if the direct response is nothing more than a response and if consumers do not perceive the marketing as a premium or expectation of advantage in one fashion or another. 2.2 What are the major restrictions in your country on direct response marketing, which sellers should be aware of? Marketing is regulated by the Trades Practices and Consumer Protection Act of 1991. Direct marketing falls under the scope of the Privacy Act of 1992, which has set up a system of opt-out. Distance sales (including marketing aspects) are heavily regulated by the Trade Practices and Consumer Protection Act of 1991. Audiovisually, radio and television rules are diverse: we have several language communities; teleshopping is specifically regulated,though not in detail. 2.3 Are there any laws or regulations pending in your country that could have an impact on direct response marketing? The Directive 2000/31/EG on electronic commerce has to be transposed in Belgian law before January 17th 2002. 2.4 Identify any governmental or regulatory agencies charged with regulating the direct selling industry in your country and the business sector(s) they regulate. Ministry of Economic Affairs, Directorate of Trade Policy; Services of the responsible Ministers themselves. 2.5 What are the current hot issues among regulators and enforcement agencies in your country that could have an impact on direct response marketers? There is a great deal of discussion about direct marketing (opt-in or opt-out?) and internet advertising. 2.5 Explain briefly what types of penalties may be imposed on marketers by these agencies for violating the laws. The Trade Practices and Consumer Protection Act of 1991 foresees an action to cease and desist the targeted violations. The judge may order the publication of this court decision in national newspapers (e.g. SABENA vs. RYANAIR). Damages may be awarded (our legal system only accords curative, simple damages). There are some specific penalties for very specific violations and/or specific areas of advertising. In general, the environment is not highly risky in Belgium. Damages are hardly ever awared. 2.6 Can a company directly sue a competitor for false or deceptive advertising and, if so, what are the penalties if such a suit is successful? Yes. The company may start a procedure to cease and desist the advertising. The response to the question about penalties is answered under 2.5. 2.7 Does your country recognize the concept of "class actions" whereby a law firm can represent all consumers within a particular "class" and sue a marketer for false or deceptive advertising? If so, what are the penalties if such a suit is successful? Our legal system does not have a concept of "class action", although consumer protection organizations and professional organizations are competent to file complaints. In fact, the reality comes near to the one of a class action. Class actions are not frequently filed. Again, penalties upon a successful 'class action' lawsuit are small. Damage has to be proven. Punitive damages are not accepted. 3. Consumer Privacy Issues 3.1 What is the current law in your country relating to privacy of personal information? The Privacy Act of 1992, as changed by the Royal Decree of 1998. 3.2 Does the law distinguish between information collected on the Internet and information collected through other marketing methods, e.g., by telephone or by mail? No. 3.3 Does the law distinguish between different types of personal information, e.g., name and address vs. financial information such as consumer credit card numbers? If so, how are they distinguished? What restrictions exist on the transfer of credit card or bank account information for marketing purposes? The Privacy Act distinguished between several types of personal information, such as for instance medical information. Any personal information fall under the scope of the Act and for some categories of personal information (e.g. medical information) the obligations are stricter. Any collection or treatment of personal information, including the mentioned financial information falls under the scope of the Act. 3.4 Does your country require "opt in" or "opt out" as the method for the consumer to grant consent to disclosure of their personal information? Opt out. But: consent needs to be granted specifically before personal information may be collected, treated and disclosed. This the first phase in any private data collection. Some information may not at all be collected, treated or disclosed. 4. Specific Marketing Methods The following marketing methods are currently under scrutiny in some countries, e.g., the United States. The discussion below indicates the extent to which such marketing methods are scrutinized in the reporting country, and if so, what legal restrictions apply: 4.1 Free Trial Offers and Free to Pay Conversion Offers. A marketing plan whereby the consumer accepts an offer to try a product or service free of charge for a specified time period, e.g., 30 days, prior to purchasing. At the end of the trial period, the consumer is automatically charged or billed for the product or service (usually on a credit card), unless he or she takes affirmative action to cancel. If these offers do not infringe on fair trade practices, there is no problem. It is under the Trial Offer safe however, to follow some formal requirements that normally apply to sales at a distance if the method used is a sales at a distance. 4.2 Continuity Plan Offers. A marketing plan whereby the consumer agrees to receive periodic shipments of products or services unless and until the consumer affirmatively declines a periodic shipment or cancels his participation in the plan. The consumer is billed for each shipment of product or service. See 4.1. Continuity Plan Offers have to grant consumers the right to terminate the membership to the Plan and normally have to grant each time a product is shipped the right to change the consumer's mind during a period of 7 working days following the receipt of the product. The participating consumer has to receive particular warning texts about her or his rights to cancel at all times in a business-to-consumer relationship. An attenuation to this rule exists for some products or services such as newspapers or magazines. Sometimes, you have only once a cancellation right: at the beginning if it is a sales at a distance. 4.3 Automatic Renewal Offers. Generally a feature in a subscription or club membership offer whereby the subscription or membership is automatically renewed at the end of the initial term and each subsequent term unless the consumer affirmatively cancels. See in 4.1. 4.4 Revenue Enhancement Programs. Also known as an "up-sell" offer, this marketing method presents to a consumer multiple product offers from different marketers on one telemarketing call. Typically, the consumer agrees to the first offer and provides their credit card number. The telemarketer then "up-sell" the consumer with additional offers. If the consumer accepts the additional offers, the consumer's credit card number is provided to the other marketers. See 4.1. It is not possible to pass-on credit card numbers without the specific prior consent thereto. 5. Specific Product Categories 5.1 What special laws or regulations apply in your country to the direct marketing of products or services in the following categories: 5.1.1 Dietary supplements Due to health protection, advertising for food, dietary supplements, diet and/or weight loss products, biologically produced food, alcohol, beverages, tobacco, spices, coffee, tea, is regulated. The special regulations are very diverse and apply to very specific products. In essence, direct marketing of dietary products that are not to be qualified as drugs is allowed. Special attention is to be given to the regulatory side before marketing is conducted and to the labeling and description of the ingredients, as well as of the nutritional value and quantities of every ingredient. 5.1.2 Diet/Weight Loss products See answer 5.1.1. 5.1.3 Drugs Advertising for drugs is regulated by an Act of 1964, as changed by an Act of 1998. Some other issues fall under the scope of other regulations. In general, advertising for drugs is allowed, but strictly regulated. Most sales promotion techniques remain prohibited. Sales promotion in form of direct marketing for drugs is still prohibited. 5.1.4 Electro-muscle stimulators The general regulations of the Trade Practices and Consumer Protection Act are applicable. 5.1.5 Health and fitness products See 5.1.4. 5.1.6 Beauty products Possible. Advertising for beauty products is regulated by a Royal Decree of 1997. There is a lot of self regulation in cosmetics codes. 5.1.7 Travel offers State lottery acts and regulations in respect of trade promotion travel offers. 5.1.8 Magazine subscriptions Possible. The general regulations of the Trade Practices and Consumer Protection Act are applicable. 6. Extended Liability 6.1 In principle the advertiser will be held responsible for false or misleading advertising. If the advertiser doesn't have his residence, which is a very specific legal notion, in Belgium, then the publisher or the producer may be held responsible. If they don't have their residence in Belgium, then the printer or maker may be held responsible. Finally, the distributor or any person who has help to assure that the advertising had any effect may be held responsible. 7. Advice to Foreign Marketers 7.1 To always comply with the distance selling rules, even if this is not compulsory for a specific technique of direct selling used and to have particular attention up front for the payment conditions.