17/03/2020

Capitalising on Fear Prohibited in Marketing

The outbreak of COVID-19, or the coronavirus, has been declared a pandemic, and its impacts are being felt in every corner of society. Unfortunately, this public health emergency is being taken advantage of in the form of questionable product marketing.

The coronavirus outbreak is a rapidly developing situation. This information reflects the situation at the time it was published 12 March 2020 and is subject to change.

In response to improper marketing, tech giants such as Google, Amazon and Facebook have taken action voluntarily and have to date already removed tens of thousands of ads and posts seeking to profit from people’s fear and spread disinformation. In Finland, online marketplace Tori.fi has banned the sale of face masks and disinfectants as well as advertisements claiming that a product could protect against or prevent coronavirus infections or stop the spread of the virus.

Online marketplaces and tech companies have taken the initiative in championing responsible marketing and ensuring the availability of correct information in this crisis. From a lawyer’s perspective, this active social role taken by various companies is a voluntary and advance filtering by these companies of marketing that could be deemed illegal.

Prohibition of Unfair Marketing and Inappropriate Practices Seeks to Protect Consumers

The Consumer Protection Act states that no conduct that is inappropriate or otherwise unfair from the point of view of consumers shall be allowed in marketing.

Marketing is considered unfair if it is clearly in conflict with social values. The unfairness of marketing is assessed by taking into account all of the circumstances of each individual case, so it is an overall case-by-case assessment. There is no doubt that the current public health emergency would affect this assessment.

Marketing is considered inappropriate if it violates generally accepted business behaviour and the marketing clearly undermines the ability of consumers to make a reasoned purchasing decision or other decision relating to consumer goods. This assessment requires that the marketing would lead to a consumer making a decision that they would not have made without the behaviour. If marketing is targeted at a group that is particularly susceptible to influence, the inappropriateness of the marketing will be assessed from the perspective of this group.

Marketing does not have to have factually led to a consumer buying goods or services and the behaviour does not have to be proven to have caused concrete harm or damage to a consumer for it to be found inappropriate. In this case, a purchasing decision does not just mean whether the consumer purchases goods or services, and includes, e.g. the prices and other conditions under which they buy the commodity.

For example, Amazon has removed over a million products that were misleadingly marketed as preventing coronavirus infection or that had extortionate prices, and Facebook and its subsidiaries announced that they are blocking the advertising of face masks entirely.

Market Products Truthfully

The law prohibits marketing that provides false or misleading information. Specifically, this prohibition means that the key information on a commodity must be true, and information that is true in and of itself cannot be presented in a misleading manner.

So, for example, marketing face masks as protection against the epidemic is clearly misleading, as scientists and medical professionals have been clear that wearing a face mask will not protect a healthy person from infection. By contrast, face masks are recommended for people who have already been infected, as they could prevent them from spreading the infection.

Despite this people have been stockpiling face masks around the globe, and prices have gone through the roof. This has been a cause for concern, for example, in the United States, where face masks have been aggressively marketed to consumers, leading to an explosion in demand. At worst, this could lead to healthcare personnel running out of masks, which would place society at large at risk.

Responsible Marketing and Information Are Key in a Crisis

In a crisis, the marketing, decision making and publication of decisions by companies have a major impact on whether a company ultimately incurs goodwill or badwill.

For example, Google’s CEO Sundar Pichai published a release stating that Google is approaching the situation responsibly, fully aware that many rely on Google’s search engine every day. The company announced that it is combating false information, e.g. by directing searches relating to the coronavirus primarily to the sites of the WHO and national authorities and by removing all advertisements capitalising on the epidemic from Google Ads.

It is a good idea to be particularly careful even if your business does not revolve around face masks. For example, if you are marketing nutritional supplements or other health products, unjustified claims that your product may curb the symptoms of coronavirus or help protect against it would very likely be considered, inter alia, misleading and both unfair and inappropriate behaviour. In the current circumstances, this could also happen if your marketing excessively emphasiseas the disinfectant properties of your cleaning product.