I just found out that the lecturer of an undergraduate course I'm tutoring in has given the students an assignment to evaluate a product from the company he works for. To evaluate it, they need to read articles written by people in his company and write up a report. They don't have alternative assessment options. Is this okay? It feels weird to me, but I suppose there's nothing wrong with it? I just wish I'd known before because I would have mentioned conflict of interest to them, but we presented the papers as straight research papers (when they were actually written by the same people who sell the product).
It would be ethically questionable if the person who assigns the question gets to benefit from the assignment, directly or indirectly. For example, if students had to buy a product and the lecturer gets a cut of the revenue from his employer. Or if the company later uses student reports to improve the product or its marketing, and the instructor benefits from this.
On the other hand, if it's just an exercise in evaluating articles and writing reports, then what the topic really is doesn't matter all that much. After all, we give homework on all sorts of completely made up and contrived topics; why not use a real-world testcase, in particular if the instructor is familiar with it and can give actual and informed feedback? You might learn more from this example than you might if the instructor made up the documents you have to evaluate, or if you had to evaluate things the instructor is only marginally familiar with.
If the students are doing original work such as research on the current market or work to expand or improve the product it would be an issue. If the assignment was something simple and the professor assigned it due to his/her knowledge of the area, it's not as big a deal, but still may be ethically dubious. It's unlikely the students are specifically being exploited as unpaid labor by the professor, but it's still possible they violated the school's guidelines.
Your school should have an ethics policy or guidelines for what constitutes conflicts of interest that you can consult to see if any major rules were broken.
It is unlikely that undergraduates in the field would be contributing anything groundbreaking to the market research of the product. But if it were a graduate class, then, maybe. Based on what you've said, I assume the teacher is just teaching from something he or she knows intimately, which can often produce the best constructive feedback for his or her students.