Do we need the Unfair Trading Regulations?

There’s a catchily titled new law that comes into force on the 26th May and that could have big impacts for the way some brands behave online: the Consumer Protection from Unfair Trading Regulations 2008. The regulations are wide-ranging and aim to target “sharp practice and aggressive selling tactics”; the impact they have on online marketeers, however, could be huge.

The law requires that people make it absolutely clear who they are working for, so brands that pose as customers to fake blogs, put overly positive reviews on Tripadvisor or secretly back online soap operas will all be affected. Using blogging and fake recommendations has become a lucrative new business stream for PR agencies, and the raft of blogs-gone-bad is possibly led by Edelman PR and Wal-Marting across the US. This law would make this kind of activity illegal, at least in the UK.

It’s clear that this law brings more consistency into marketing regulations – it is currently illegal in the UK to use product-placement in TV and Film, and this new law should help to mean that product placement online is either equally illegal or would need an obvious health warning. However, my concern is about the all-encompassing impact of this law. It’s true that brands should be dishonest online. If not because of the damage it could do to their consumers, but also because of the damage it will do to the brand. Social media and social networks are inherently open and trusting places – you are only successful online if you are open and honest about who you are and what you’re doing.

Perhaps some element of self-regulation would be better than making blogs like Wal-Mart’s illegal. In fact, when I was talking with Edelman’s Head of Social Media in Paris earlier this month they said that from their perspective the ‘uncovering’ of the blog was a huge success. We would, of course, expect them to say this. They’re in PR. But it’s true that the coverage created by the blog ended up far exceeding what they thought it would, and the monetary value of this coverage is huge.

It will be interesting to see how the law pans out, how the first applications impact brands, PR agencies and bloggers. But the behaviour it is trying to ensure – that people are honest online – is one I suspect would happen anyway by natural means. People trust honest people; and being honest online would always become the most successful and most popular wy of engaging customers. Even without the law.