At seomoz.org, attorney Sarah Bird has posted a summary of the portions of a new U.K. law against stealth marketing - the practice of manufacturing an imaginary groundswell of support for a product in an effort to raise brand awareness and facilitate "buy-in" from the target market. The U.K. law implements portions of an E.U. directive 2005/29/EC, prohibiting Unfair Commercial Practices.
Examples of the newly prohibited practices include: paid reviews or "advertorials" in magazines that fail to disclose the commercial relationship between the magazine and the advertiser; paid blog comment seeding; fake blogs (like the kinds used to promote new movies); and fake comments praising books on amazon.com.
While here in the U.S. we have laws against false advertising, for the most part these laws are only designed to protect competitors, not consumers. Consumers have recourse to warranty law in regard to false claims, but so far have no recourse against viral marketers who somehow quietly influence them to purchase a particular product. Two things about this stand out: (1) It is not immediately clear what the harm of this is, odd though it may seem to us older folks, and (2) how little consideration is given to the protection of speech in Europe. While here in the U.S., commercial speech is not entitled to the same level of protection as non-commercial speech, we are nevertheless far removed from having the power to enact this sort of sweeping legislation.
For the record, neither seomoz nor anyone affiliated with the company paid me to link to their article.
Final note: if you are a North Carolina company doing business in Europe, or targeting customers there, European courts may be able to exercise jurisdiction and subject to you being sued in their courts. Accordingly, a full review of this new law should be undertaken to assess its applicability to your overseas marketing.
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