CMA Marketing Ethics & Legal Compliance 1 — Questions and Answers
Question 1: What does the CAN-SPAM Act regulate in the United States?
- Social media advertising standards
- Commercial email messaging, including requirements for opt-out mechanisms and sender identification (Correct answer)
- Television advertising content
- Telemarketing call scripts
Correct answer: Commercial email messaging, including requirements for opt-out mechanisms and sender identification
The CAN-SPAM Act sets rules for commercial email in the US, requiring honest sender identification, subject lines, and a clear opt-out mechanism.
Question 2: Under FTC guidelines, when must social media influencers disclose paid partnerships?
- Only when the payment exceeds $500
- Always, whenever they receive payment, free products, or other compensation to promote a brand (Correct answer)
- Only when posting on platforms with more than 1 million users
- Only when the brand requests disclosure
Correct answer: Always, whenever they receive payment, free products, or other compensation to promote a brand
FTC guidelines require influencers to clearly disclose any material connection to a brand, including free products, whenever they endorse it.
Question 3: What is 'greenwashing' in marketing?
- Using green color schemes in brand design
- Making misleading environmental claims to appear more sustainable than a company or product actually is (Correct answer)
- Environmentally friendly packaging design
- A strategy to market products to eco-conscious consumers honestly
Correct answer: Making misleading environmental claims to appear more sustainable than a company or product actually is
Greenwashing involves making false or exaggerated environmental claims to mislead consumers into believing a product or company is more eco-friendly than it is.
Question 4: What is the principle of 'marketing ethics'?
- Maximizing profit through any available means
- Applying moral standards and values to marketing decisions to ensure honesty, fairness, and respect for consumers (Correct answer)
- Complying with only the minimum legal requirements
- Setting the highest possible prices the market will bear
Correct answer: Applying moral standards and values to marketing decisions to ensure honesty, fairness, and respect for consumers
Marketing ethics applies moral principles to marketing practices, ensuring honesty, fairness, and respect for consumers and society.
Question 5: What does GDPR stand for, and how does it affect US marketers targeting EU consumers?
- General Data Rights Protocol; it has no impact on US marketers
- General Data Protection Regulation; US companies must comply if they collect data from EU residents (Correct answer)
- Global Digital Privacy Rule; it only applies to EU companies
- Government Data Privacy Regulation; it requires US government approval
Correct answer: General Data Protection Regulation; US companies must comply if they collect data from EU residents
GDPR is an EU regulation requiring companies worldwide, including US marketers, to protect EU residents' personal data and obtain clear consent.
Question 6: What is 'deceptive advertising' under FTC standards?
- Advertising that uses humor or exaggeration
- Advertising that contains a material misrepresentation or omission likely to mislead a reasonable consumer (Correct answer)
- Advertising targeted at niche audiences
- Comparative advertising that mentions competitors by name
Correct answer: Advertising that contains a material misrepresentation or omission likely to mislead a reasonable consumer
The FTC defines deceptive advertising as containing material misrepresentations or omissions that could mislead a reasonable consumer and cause harm.
CMA Marketing Ethics & Legal Compliance 1
What does the CAN-SPAM Act regulate in the United States?