Frequently asked questions relating to the Internet

What kinds of restrictions is advertising subject to?

The British Code of Advertising and Sales Promotion applies to all adverts in Britain including those placed on the Internet by UK advertisers. There are specific requirements for distance selling advertisements and obligations on database owners. In particular, UK law also imposes restrictions on advertising, lotteries, gaming and betting in respect of certain classes of products

One of the problems facing Internet companies is the differing advertising and promotion regulations in different countries. Ensuring compliance with all these would be an extensive process, for example, in Germany "2 for 1" promotions are illegal. As a result, it is important to decide which countries you are targeting, establish whether the proposed advert or promotion is acceptable in that country and then include a statement that the site is only intended for access from those countries.

Comparative advertising using a third party’s registered trade mark is permitted, however, it may lead to actions of infringement or defamation if the comparison is contrary to honest practices, takes unfair advantage or is detrimental to the distinctive character or repute of the trade mark.

The Misleading Advertising Directive aims to harmonise the laws across the EU relating to comparative advertising. Advertisements must objectively compare one or more material, relevant, verifiable and representative features.

Who can be liable for defamatory material on the Internet?

Under the Defamation Act 1996 an author, editor or publisher may incur liability for defamation. An ISP will not be considered an author, editor or publisher if it is only the operator of or provider of access to communications systems by means of which the statement is transmitted, or made available, by a person over whom he has no effective control.

However, the ISP must have taken reasonable care to prevent the publication of defamatory statements. In a recent case, an ISP was found guilty of defamation in circumstances where it had failed to remove defamatory statements from a Usenet News Group, after having been informed of their existence. (Godfrey v Demon Internet Ltd 1999). As a result, ISPs and site owners where, for example, they invite comments to the website should act quickly to remove any statements which are or are alleged to be defamatory.

As a result of Godfrey v Demon (1999), an ISP shut down a magazine for homosexuals for fear of being held liable for defamation. However, the owner of the site is now bringing a legal challenge to the European Court of Human Rights on the basis that English libel laws breach the right to freedom of expression and that ISPs should only be liable if it had knowledge that a statement was both defamatory and untrue or had been recklessly indifferent. This case has yet to reach the courts, however, forthcoming legislation from Europe in the form of the e-commerce and copyright directives appear to be taking a route which relieves ISP's of liability provided that they are "mere conduits" of information, not taking steps to check or review it. This will also apply in cases of copyright infringement.

If you have any queries about these questions and answers, please contact John Armstrong, Commercial Partner by e-mail [email protected].