Small businesses need a way to market and advertise their products and services, and the internet and other communications technologies offer many opportunities that are both effective and affordable. Traditional advertising can be quite expensive, particularly in media like television, making it difficult for small businesses with small budgets to get much exposure. This is where the internet can offer excellent opportunities for many businesses.
The New York Daily News profiled a New York company offering what it calls a “digital marketing tool” for small businesses last week. The company touts its ability to help small businesses reach a wide range of consumers online through multiple platforms. It allows a business to announce new deals or promotions near-simultaneously via e-mail to customers, postings to blogs and social media sites, updates to the business’ website, and notices to publishing networks all at once. The company claims that it is signing up a hundred new customers per month, with sales approaching $3 million. The company faces stiff competition from social media companies, companies offering “daily deals,” and search engine optimization companies, all of which offer marketing opportunities to small businesses.
New technologies for advertising and marketing sometimes lead a business to forget about the old rules governing such activity. From the standpoint of a small business’s legal concerns, small businesses must abide by the same laws governing advertising, marketing, and sales as any other company. This includes laws prohibiting deceptive trade practices and governing how products are marketed to the public.
New York law prohibits companies from “false advertising,” which is broadly defined to include a failure to reveal material facts about a product or service as well as a false or misleading statement about the product or service. It applies not only to statements but also images, designs, or any other context presented in an advertisement. A business cannot mislead consumers about a feature or benefit of a product, and it cannot deliberately withhold material information about a risk inherent to the product. The New York Attorney General can bring a civil lawsuit against people or businesses believed to be in violation of the statute. A business found to have committed a deceptive trade practice could be held liable for up to $5,000 per violation.
A recent case against the pharmaceutical company Johnson & Johnson offers a rather extreme example of these laws in action. A jury in Arkansas recently found that the company presented misleading information to both doctors and patients regarding risks associated with Risperdal, an antipsychotic medication. The jury found that the company not only concealed information about the drug’s risks when it marketed it for certain uses, but also defrauded Medicaid by not reporting these risks and by overcharging for the drug. A judge ordered the company to pay $1.1 billion for violation of the state’s consumer protection laws. All of this arose from the company’s conduct in its marketing of the drug. Small businesses have the same obligations, even if on a smaller scale.
The New York business attorneys at Samuel C. Berger, PC offer fixed-fee packages of legal services to businesses and entrepreneurs who want to do business in New York and northern New Jersey. To speak to a member of our skilled legal team, contact us today online or at (212) 380-8117.
More Blog Posts:
New York and New Jersey Small Businesses Consider Moving to the Cloud, New York & New Jersey Business Lawyer Blog, April 5, 2012
Trends from 2011 for New Jersey Businesses, New York & New Jersey Business Lawyer Blog, January 5, 2012
Small Businesses Must Adapt in Order to Make It in a Bad Economy, New York & New Jersey Business Lawyer Blog, January 24, 2012
Photo credit: ‘Woman-typing-on-laptop’ by Matthew Bowden www.digitallyrefreshing.com (http://www.sxc.hu/photo/145972) [Attribution], via Wikimedia Commons