If you’ve ever heard the term “Industry Self-Regulation”, but never understood what it really means, this post is for you. Below, we’ll answer the six most popular questions about this topic and define it clearly.
Industry self-regulation refers to the process by which industries establish their own set of standards and guidelines for businesses to follow. This is done in lieu of outside regulation by government entities, such as the Advertising Standards Authority or FTC regulations.
Self-regulation guidelines are set forth by industry groups in order to help ensure that all businesses within that industry are following the same rules and codes of conduct. Companies who violate these codes may face repercussions from the industry association, such as monetary fines or suspension from membership.
By establishing their own industry code of conduct, companies are able to ensure that they are adhering to ethical standards and behaving responsibly within their respective industries. Additionally, this can help prevent overregulation by government entities.
Advertising regulation laws are put in place by government entities, such as the FTC, in order to protect consumers from unfair or deceptive advertising practices. Industry self-regulation aims to accomplish similar goals but does so within the confines of an industry association rather than a governmental entity.
Consumers benefit from industry self-regulation, as they are able to trust that companies within an industry are behaving ethically and following a set of guidelines. Additionally, companies benefit from self-regulation as they are able to establish a level playing field with their competitors and avoid potential legal repercussions for unethical practices.
One example of industry self-regulation can be found in the entertainment industry, where ratings systems are used to help inform parents about the content of movies and TV shows. Another example can be seen in the pharmaceutical industry, where guidelines are set forth by associations like the American Medical Association to ensure ethical advertising practices.
