CC BY
0
УДК 347.777
Kostoreva A.S.
master, University of Georgia School of Law
USA
THE DISTRIBUTION OF LEGAL RISKS AND RESPONSIBILITIES AMONG INTERNET ADVERTISING PROVIDERS AND ADVERTISING AGENCIES
Abstract
This article examines the distribution of legal risks and responsibilities between internet advertising providers and advertising agencies in the USA. It analyzes the intricate web of legal obligations that arise from the unique nature of the internet as a commercial and communication medium, focusing particularly on California's legal landscape. As the digital advertising domain continues to grow and evolve, understanding and managing these risks is essential. The study explores the various federal and state laws impacting online advertising practices, emphasizing the importance of compliance with data protection regulations and intellectual property laws, and underlining the significance of transparent contractual agreements between the involved parties.
Keywords
Internet advertising, legal risks, data protection, intellectual property, advertising agencies, copyright.
Introduction
In the rapidly evolving digital landscape, the advertising sector has seen a significant shift towards online platforms, leading to a complex web of interactions among various stakeholders, including internet advertising (IA) providers and advertising agencies. This transition has introduced a myriad of legal risks and responsibilities, necessitating a comprehensive understanding and strategic management to mitigate potential legal challenges and liabilities. The primary objective of this study is to analyze the distribution of legal risks and responsibilities among IA providers and advertising agencies, with a specific focus on the USA, particularly the state of California, which is renowned for its stringent and often precedent-setting legal standards in the digital and advertising industries.
Digital advertising is playing an increasingly important role in the modern economy. Legal difficulties are caused by the unique characteristics of the internet as a means of commerce and communication.
Main part
Internet advertising (IA), also known as online advertising or digital advertising, refers to the use of the internet to deliver promotional marketing messages to consumers. It encompasses a wide range of formats and channels, including display ads on websites, social media advertising, search engine marketing (SEM), email marketing, mobile advertising, and video advertisements. The goal of IA is to reach potential customers through the digital devices and platforms they use daily, leveraging data analytics to target messages more precisely and measure the effectiveness of marketing campaigns. IA serves as an essential link between businesses and consumers, playing an important role in increasing brand awareness and engagement around the world.
In 2023, the global internet advertising market witnessed growth, with its value surging to an impressive $472.81 billion, showcasing the sector's robust expansion and the increasing reliance of businesses on digital platforms to reach their target audiences [1]. Between 2000 and 2022, revenues from online advertising in the USA saw a significant increase (fig. 1).
Fig. 1 - Online advertising revenue in the USA, 2000-2022, billion dollars [2]
This growth is indicative of the shift towards digital channels, reflecting the evolving consumer behaviors and the digital transformation of advertising strategies. The substantial size of the market underscores the importance of IA not only as a key driver of global commerce but also as a dynamic field laden with legal complexities and challenges that necessitate careful navigation by all parties involved.
Legal risks in IA
The realm of IA, while offering unprecedented opportunities for brand promotion and customer outreach, is fraught with a spectrum of legal risks that necessitate vigilant consideration by both advertising providers and agencies. This complexity stems from the multifaceted nature of online platforms, where diverse regulations intersect with dynamic technological advancements.
In the legal field, ensuring confidentiality plays a crucial role, necessitated by stringent data protection laws. In the European Union, this is embodied by the General Data Protection Regulation (GDPR). In 2023, the USA witnessed an increase in cybercrimes related to personal data breaches, therefore ensuring privacy plays an important role (fig. 2).
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Fig. 2 - Annual number of data compromises and individuals impacted in the USA, 2005-2023 [3]
In the USA, there is no single law that regulates issues related to the processing of personal data and privacy. In 2022, the draft American Data Privacy and Protection Act was proposed, but it has not been adopted. Currently, the country's legislation consists of several federal laws that address personal data processing within specific sectors, as well as several independent laws adopted at the state level. The California Consumer Privacy Act (CCPA) deserves special attention, as it grants Californians rights regarding the information collected about them by businesses.
These regulations impose rigorous consent requirements for data collection and usage, mandating
transparent data practices. Advertisers navigating these laws must ensure that their campaigns are not only compliant but also respectful of consumer privacy preferences to avoid substantial fines and reputational damage.
Copyright infringement presents another significant legal hazard in IA. The digital environment, with its ease of content sharing and reproduction, amplifies the risk of using copyrighted materials without proper authorization. The implications of such infringements can be severe, encompassing legal battles, financial liabilities, and negative publicity. Thus, advertisers are compelled to rigorously vet their content to ensure it does not infringe upon the intellectual property rights of others.
The risk of deceptive advertising practices is heightened in the digital domain, where misleading or false advertisements can rapidly circulate, attracting the scrutiny of regulatory bodies like the Federal Trade Commission (FTC) in the USA. These entities enforce laws that mandate honesty and transparency in advertising, penalizing misleading claims that could deceive consumers. The dynamic and interactive nature of IA, including the use of algorithms and targeted ads, necessitates a careful balance to avoid accusations of unfair or deceptive practices.
Contractual intricacies between IA providers and advertising agencies introduce additional layers of legal complexity. These agreements must meticulously delineate the rights, obligations, and liabilities of each party, including provisions for intellectual property usage, data handling practices, and dispute resolution mechanisms. The failure to establish clear contractual terms can lead to conflicts and liabilities, underlining the importance of comprehensive legal oversight in drafting and negotiating these agreements.
Navigating the legal risks in IA demands a proactive and informed approach, where continuous monitoring of legal developments and adherence to ethical advertising practices are paramount. By fostering a culture of compliance and responsibility, advertisers can mitigate these risks, safeguarding their operations against legal challenges while promoting trust and integrity in the digital advertising ecosystem.
Legislative regulation of the distribution of responsibility among IA providers and advertising agencies
The distribution of responsibility and legal risks between IA providers and advertising agencies in the USA is governed by a combination of federal laws, regulatory guidelines, and state-specific legislation. This intricate legal framework aims to ensure that both providers and agencies engage in fair, transparent, and lawful advertising practices.
Under federal law, the Federal Trade Commission (FTC) Act, particularly Section 5, prohibits unfair or deceptive acts or practices in commerce [4]. This broad provision is critical in regulating the conduct of both IA providers and agencies, emphasizing their responsibility to ensure that advertisements are truthful, not misleading, and substantiated. The FTC's endorsement guides further stipulate the need for clear disclosures of material connections between advertisers and endorsers, directly affecting how agencies and their clients manage endorsements and testimonials in online advertising.
The Children's Online Privacy Protection Act (COPPA) is another pivotal piece of legislation, imposing specific obligations on operators of websites and online services directed to children under 13 years of age [5]. COPPA requires the provision of notice and the obtainment of parental consent for the collection, use, or disclosure of personal information from children. This law places a distinct responsibility on advertising providers to implement age-gating mechanisms and ensure compliance with COPPA's privacy protections when targeting children.
In addition to federal regulations, specific states have enacted their legislation to further regulate IA, with California being at the forefront of such efforts. The California Consumer Privacy Act (CCPA), and its subsequent amendment, the California Privacy Rights Act (CPRA), significantly impact the distribution of responsibilities among IA entities [6, 7]. These laws provide California residents with unprecedented control over their personal information collected by businesses, including the right to know about, delete, and opt-out of the sale of their personal data. For advertising providers and agencies, this means a heightened level of responsibility in terms of
data collection, processing, and sharing practices. Compliance with CCPA and CPRA necessitates a thorough reassessment of how advertisers manage consumer data, requiring robust data protection measures and transparent communication with consumers about their data rights.
California's Civil Code requires businesses to disclose to customers, upon request, the categories of personal information shared with third parties for direct marketing purposes [8]. This regulation further delineates the responsibility of advertising entities to manage consumer data carefully and transparently.
In today's digital world, online advertising is becoming an increasingly important component of any company's marketing strategy. Online advertising providers and advertising agencies bear legal responsibility for their activities. Table 1 presents the characteristics of this responsibility.
Table 1
The legal responsibilities of advertising agencies versus IA providers in the USA
Legal Responsibility Advertising agency IA provider
Compliance with advertising laws Must ensure all advertising content complies with federal, state, and local advertising laws, including truth-in-advertising standards set by the Federal Trade Commission (FTC). Required to comply with online advertising standards and regulations, such as the FTC's guidelines for digital advertising and disclosures.
Intellectual property rights Responsible for ensuring that all creative content does not infringe on copyrights, trademarks, or other intellectual property rights. Must implement systems to prevent the distribution of content that infringes on intellectual property rights, especially in programmatic advertising.
Privacy and data protection Obligated to protect consumer data according to privacy laws (like the California Consumer Privacy Act (CCPA) and General Data Protection Regulation (GDPR) for European audiences), especially in data collection for marketing research and targeting. Must adhere strictly to data protection and privacy laws in the collection, usage, and storage of user data for targeting ads, including obtaining necessary consents for tracking cookies and similar technologies.
Advertising to children Must follow specific regulations regarding advertising to children, such as the COPPA in the USA, which restricts the collection of personal information from children under 13. Especially responsible for ensuring that their platforms do not unlawfully target or collect data from children, in accordance with COPPA and other relevant laws.
Endorsements and testimonials Required to follow FTC guidelines on endorsements and testimonials, ensuring that any endorsements or testimonials are honest, not misleading, and disclose material connections. Must monitor and ensure that ads containing endorsements or testimonials comply with disclosure requirements and are not misleading.
Accessibility Must ensure that advertising materials are accessible to people with disabilities, complying with the Americans with Disabilities Act (ADA) and other relevant guidelines. Required to ensure that online ad platforms are accessible, which includes making sure that ads served are accessible to users with disabilities.
Liability for deceptive practices Liable for any deceptive advertising practices, which can result in significant fines and legal action from regulatory bodies or affected consumers. Shares liability in cases where the platform knowingly runs deceptive ads, including responsibility for due diligence in ad content review.
The legal landscape governing the distribution of responsibility and legal risks in IA is both complex and dynamic. It requires advertising providers and agencies to maintain a vigilant and proactive approach to compliance, staying abreast of regulatory changes and evolving best practices [9]. By understanding and adhering to these legal obligations, entities can mitigate risks, protect consumer rights, and foster trust in the digital advertising ecosystem.
Comparison with the international context
In the complex and interconnected realm of digital commerce, the distribution of legal risks and responsibilities among IA providers and advertising agencies presents a dynamic challenge that transcends national borders. This globalized context necessitates a comparative analysis of the legislative frameworks that govern internet advertising across different jurisdictions (table 2).
The global trends in IA regulation reveal a gradual shift towards greater transparency, enhanced data protection, and increased accountability for advertisers [10]. International standards, as exemplified by the guidelines of the Organisation for Economic Co-operation and Development (OECD) on digital content and consumer protection, further catalyze this shift, encouraging harmonization of laws and practices to facilitate cross-border digital trade while safeguarding consumer rights.
Table 2
Comparative analysis of IA and data protection legislation
Feature / USA European Union United Kingdom (UK Canada (PIPEDA)
Jurisdiction (GDPR) GDPR)
Legal basis for data Sectoral approach, Explicit consent, Similar to EU GDPR. Consent, contractual
processing depending on the state and specific sector. legitimate interest, contractual necessity. necessity, legal obligations.
Consumer rights Varies by state, e.g., Right to access, Similar to EU GDPR. Right to access and challenge
CCPA in California rectify, erase data; the accuracy of personal
provides rights to object to information.
access, delete, and opt- processing; data
out of sale of personal portability.
data.
Cross-border data Generally less Strict conditions; Similar to EU GDPR, Subject to adequacy
transfers regulated, but specific adequacy considering post-Brexit assessments, similar to GDPR
requirements can apply decisions; agreements. standards.
in sectors or states. appropriate safeguards.
Regulatory Federal Trade National Data Information Office of the Privacy
authority Commission (FTC) and Protection Commissioner's Office Commissioner of Canada
state attorneys general. Authorities (DPAs). (ICO). (OPC).
Special Federal laws focus on Stringent on data UK may diverge in the Focus on accountability and
considerations specific sectors; state minimization and future for digital trade privacy management
laws like CCPA and purpose limitation. and innovation. frameworks.
CPRA lead in consumer
privacy.
This comparative analysis elucidates the multifaceted regulatory landscape IA providers and agencies must navigate. It not only underscores the variances in legal obligations across jurisdictions but also highlights a converging trajectory towards stricter data privacy and consumer protection standards worldwide. As digital advertising continues to evolve, staying abreast of these global trends and standards becomes paramount for entities seeking to minimize legal risks and foster ethical, responsible advertising practices in the international market.
Implementation of responsibility for online advertising in practice
In the USA, the Federal Trade Commission (FTC) has increasingly evaluated advertising agency liability for deceptive marketing practices. The FTC and state attorneys general have shown that merely acting under the direction of an advertiser, who has «ultimate responsibility to approve content», does not absolve ad agencies of liability for illegal acts or practices [11].
This case underscored the critical nature of compliance with data protection laws and the potential legal risks for companies failing to protect user privacy. One specific example of an IA lawsuit case is the case of Monster Energy Co. v. Vital Pharmaceuticals Inc., ruled by the United States District Court for the Central District of California, October 6, 2023, which does business as Bang Energy [12]. This case became one of the largest false
advertising verdicts in history, where Monster Energy was awarded $293 million in damages from Bang Energy for allegations of false advertising and trade secret theft related to labeling their product with Super Creatine. The jury awarded $272 million for false advertising and $18 million for wrongful interference.
In California, a notable instance where the responsibility for IA fell on the provider, rather than the advertising agency, is highlighted by the enforcement actions under the California Consumer Privacy Act (CCPA). Although not directly related to advertising content, these actions emphasize the legal responsibilities of businesses, including IA firms, regarding the collection and handling of personal information which indirectly affects IA practices.
One CCPA enforcement case example involves a fitness center chain that had a confusing «Do Not Sell My Personal Information» opt-out process on its website [13]. The unclear language and toggle options misled consumers, essentially opting them into third-party cookies and the sale of their personal information when they intended to opt-out. After being notified of alleged noncompliance, the fitness center chain was required to simplify the opt-out process, making it clear and easy for consumers to understand, thereby ensuring full compliance with the CCPA's requirements for transparency and consumer control over personal information.
These examples underscore the responsibility of both IA providers and advertising agencies towards their clients and the law. It is important to ensure transparency, legality, and full compliance of all digital marketing methods with regulatory standards to protect the interests of consumers.
Conclusion
As the internet advertising sector expands, providers and advertising agencies encounter an array of legal risks and responsibilities. A proactive approach to compliance, including thorough adherence to evolving data protection laws, intellectual property rights, and transparent contractual practices, is essential to navigate the complexities successfully. This will not only safeguard the interests of the businesses involved but will also protect consumers, thus contributing to the integrity and reliability of the internet advertising ecosystem. References:
1. Internet Advertising Global Market Report 2024 //Research and Markets.
2. Online advertising revenue in the USA from 2000 to 2022 // Statista URL: https://www.statista.com/statistics/183816/us-online-advertising-revenue-since-2000/ (date of application: 04.03.2024).
3. Annual number of data compromises and individuals impacted in the United States from 2005 to 2023 // Statista URL: https://www.statista.com/statistics/273550/data-breaches-recorded-in-the-united-states-by-number-of-breaches-and-records-
exposed/#:~:text=In%202023%2C%20the%20number%20of,have%20one%20thing%20in%20common (date of application: 06.03.2024).
4. Federal Trade Commission Act URL: https://www.ftc.gov/legal-library/browse/statutes/federal-trade-commission-act (date of application: 02.03.2024).
5. Children's Online Privacy Protection Act URL: https://www.ftc.gov/legal-library/browse/statutes/childrens-online-privacy-protection-act (date of application: 02.03.2024).
6. The California Consumer Privacy Act URL: https://theccpa.org/ (date of application: 03.03.2024).
7. California Privacy Rights Act URL:https://thecpra.org/ (date of application: 06.03.2024).
8. California's Civil Code URL:https://leginfo.legislature.ca.gov/faces/codes_displaySection. xhtml?sectionNum =4&lawCode=CIV (date of application: 03.03.2024).
9. Tinyakova, V. Usage of various metrics for clustering key queries in contextual advertising / V. Tinyakova, Ya. Lavrinenko, A. Blinov // Economic and Social Development : Book of Proceedings, Moscow, 18-19 октября 2018 года / Editors: Aleksander Malole tko, Natasa Rupcic, Zoltan Baracskai. - Moscow: Российский государственный социальный университет, 2018. - P. 907-917
10.Golmgrein, Irina. (2023). A Comprehensive Overview of Monetization Strategies in Creative Industries.
International Journal of Latest Engineering and Management Research (IJLEMR). 8. 10.56581/IJLEMR.8.4.90-100.
11.Marketing Architects, Inc. URL:https://www.ftc.gov/legal-library/browse/cases-proceedings/162-3101-marketing-architects-inc (date of application: 07.03.2024).
12.Monster Energy Company v. Vital Pharmaceuticals, Inc., et al. URL: https://www.thetmca.com/files/2023/11/ Post-Trial-0rder-_1731000-1731015-https-ecf-cacd-uscourts-gov-doc1-031140986784.pdf (date of application: 07.03.2024).
13.Fitness Center Chain Updated its Website Opt-Out and Cookie Options // State of California Department of Justice URL: https://www.oag.ca.gov/privacy/ccpa/enforcement (date of application: 06.03.2024).
© Kostoreva A.S., 2024
УДК 34
Атаева Г. К.,
Преподаватель.
Туркменский государственный медицинский университет имени Мырата Гаррыева.
Ашхабад, Туркменистан.
ПОНЯТИЕ ПРЕСТУПЛЕНИЯ И ЕГО ПРИЗНАКИ В УГОЛОВНОМ ПРАВЕ
Аннотация
Спор между личностью и обществом является одной из основных проблем уголовного права. Согласно статье 10 УК деяние (действие или бездействие), причинившее вред или угрожающее причинить вред объектам, охраняемым уголовным законом, признается преступлением, представляющим общественную опасность. Составы (основные стороны) преступления определяются в законе на основе юридического определения преступления.
Ключевые слова:
преступление, наказание, уголовное право, уголовная ответственность, правонарушение, общество, индивид.
Ataeva G.K.,
Teacher.
Turkmen State Medical University named after Myrat Garryev.
Ashgabat, Turkmenistan.
THE CONCEPT OF A CRIME AND ITS SIGNS IN CRIMINAL LAW
Abstract
The dispute between the individual and society is one of the main problems of criminal law. According to Article 10 of the Criminal Code, an act (action or inaction) that causes harm or threatens to cause harm to objects protected by criminal law is recognized as a crime posing a public danger. The elements (main parties) of a crime are determined by law on the basis of the legal definition of the crime.
Key words:
mme, punishment, criminal law, criminal liability, offense, society, individual.
