CBS researcher to renew the Danish Marketing Practices Act
Photo: Professor Torben Hansen, CBS
Front page photo: Photographer Stepan Popov
When companies serve up disguised advertising on private consumers' blogs it may be at the edge of the law, if not downright against the law. It is one of many new problems emerging with new media marketing. With the spread of social media and smart phones, the Marketing Practices Act is having a hard time keeping up.
Henrik Sass Larsen, Minister of Business and Growth, has therefore appointed a committee to revise the Marketing Practices Act. There is "a need for thorough review of the Marketing Practices Act," states a memorandum from the Ministry of Business and Growth.
Torben Hansen, Professor at the Department of Marketing at CBS, has just been appointed to participate on the committee as an expert. He has researched consumer behaviour through 20 years and is co-author of the bestselling textbook Marketing Management. For many months to come he will participate in analysing the current law in relation to market conditions.
- It is difficult for companies and consumers to recognise what is allowed and what is not. It shouldn't be so complex. Hopefully we can revise the act to benefit both companies and consumers. That will create the best market and the best competition, says Torben Hansen.
Act impedes competitive capacity
There is a great need to change the act. New rules from the EU have never been implemented, and that has made both the Consumer Ombudsman and the European Commission wag their finger at Denmark, explains the Ministry memorandum.
One consequence of the outdated Marketing Act is that it may be in the way for companies to try new media marketing types, Torben Hansen points out.
- When companies are unsure of whether they are on the right side of the law, there is a risk that they will hesitate to take new initiatives. The insecurity can thereby dampen the market dynamics and impede the competitive capacity. That is inexpedient, the market should be able to run smoothly, the Professor says.
The committee is expected to have a draft ready for a new Marketing Act in the first quarter of 2016.
Read more on the Marketing Act revision in the memorandum from the Ministry of Business and Growth (in Danish) pdf.