China is experimenting with a variety of laws to control how foreign companies do business. Some regulations are being relaxed such as those controlling foreign advertising companies. Censorship of advertising is a constant concern. TV ads for offensive products such as feminine hygiene pads, hemorrhoid medications, and even athlete’s foot ointment are not allowed during the three daily meal times. The Chinese authorities banned LeBron James Nike TV ad because it violates regulations that mandate all advertisements in China should uphold national dignity and interest and respect the motherland’s culture. Apparently LeBron battling a kung fu master isn’t appropriate in the land of Confucius. Also, magazines have been ordered to use a direct translation of the often obscure name that appears on their license or use no English name at all. Thus, Cosmopolitan would become Trends lady Woman’s day would become Friends of Health and Esquire would become Trends man. Such diversity of laws among countries extends to advertising, pricing, sales agreements, and other commercial activities. Indeed, on study suggests that governmental policies actually forestall firms from taking a marketing orientation in their operations.
There is some hope that the European Union will soon have a common commercial code. On step in that direction is the proposal to harmonize the pan-European regulation of promotions based on the conservations laws that cover promotions in Germany, Austria, and Belgium. However, this proposal is meeting with string resistance from several groups because of its severe restriction on promotions mean while others push for even broader based harmonization of marketing regulations involving the United States, United nations and the WTO.
Although the European Union is a beautiful picture of economic cooperation, there is still the reality of dealing with 25 different countries, cultures and languages as well as 25 different legal systems. Even though some of Germany’s complicated Trade laws were revoked in 2000, groups such as the Center for Combating Unfair Competition, an industry financed organization continue to work to maintain the status quo. Before the German was revoked, the Center’s lawyers filed 1,000 lawsuits a year, going after, for example a grocery store that offered discount coupons or a dell that give a free cup of coffee to a customer who had already bought 10; its efforts will surely continue.
Although the goal of full integration and a common commercial code has not been totally achieved in the European Union, decisions by the European Court continue to strike down individual country laws that impede competitions across borders. In a recent decision, the European Court ruled that at French cosmetics company could sell its wares by mail in Germany and advertise them at a markdown from their original prices, a direct contradiction of German law. As the single European market Act is implemented many of the legal and trade differences that have existed for decades will vanish. Surprisingly enough standards set by the European Union for food, software, cars, and other items affect US product standards as well. In many cases, the reconciliation of so many different consumer protection standards that existed in European countries prior to the European Union resulted in rules more rigorous than those for many US products. Consequently many US products have has to be redesigned to comply with European standards. Once, a product designed for US standards could be sold anywhere in the world; for many products this is no longer the case. For example, Carrier air conditioners have been redesigned to comply with European recycling rules; Microsoft has modified contracts with software makers; Internet service providers give consumers a wider choice of technologies; McDonald’s has ceased including soft plastic toys with its Happy meals and has withdrawn all genetically engineered potatoes from its restaurants worldwide. All this is because of the need to reconcile US standards with those of the European Union. For many US products with markets in Europe meeting EU standards is less expensive than designing products especially for Europe.