This Is Not an Ad: FTC Revises Its Guidance Document for Online Advertising

April 10, 2013

On March 12, 2013, the Federal Trade Commission (FTC) released an updated version of its guidance document on online advertising.  Although similar to the original, the latest “.com Disclosures: How to Make Effective Disclosures in Digital Advertising”  provide greater clarification on issues that have emerged since the report was first published in 2000.   For example, the revised paper addresses how an advertisement’s level of deceptiveness can change if the ad is viewed on a small-screen tablet or smartphone or if constrained in a 140-character tweet.  Remember, Twitter was founded in 2006.

These .com-Disclosures are not law; they are an indication of how the FTC will enforce Section 5 of the Federal Trade Commission Act (15 U.S.C.A. 45) .   As the FTC itself cautions, compliance with the updated guidance document is no safeguard from potential liability—not under the FTC Act and especially not under other state or federal laws that may also regulate online ads.

Like the original, the revised .com-Disclosures reiterate that online ads are subject to the same tenets of advertising law as an ad displayed via any other type of medium (e.g., print or broadcast).  Any claims made in an ad may be neither false nor deceptive.  False claims cannot be cured; they must be modified or the ad will be found misleading.  Deceptive claims, however, can be cured with an accompanying disclosure that qualifies the claim to ensure reasonable consumers will not be misled — and the .com-Disclosures  note that misleading even a “significant minority” of reasonable consumers constitutes a violation of the FTC Act.  To be deemed sufficient, the qualifying disclosure must be “clear and conspicuous.”

CLEAR AND CONSPICUOUS

The clear and conspicuous standard, and how it applies in an online marketplace, comprises the bulk of the revised guidelines.  The FTC first lays out the various factors it might consider when determining the adequacy of a disclosure:  proximity and placement of a disclosure to the claim it qualifies, any elements of an ad that may distract from a disclosure, whether a disclosure ought to be repeated, etc.   Then, it discusses each factor and how advertisers can ensure their disclosures meet the clear and conspicuous standard, given the particular obstacles encountered in an online world.  Helpfully, the FTC also provides examples of both good and bad ads to elucidate its points further.

While only a full reading of the updated guidelines will prepare marketers for how the FTC will protect consumers from deceptive digital advertisements, I summarized the major revisions I detected:

–          Small screens are no excuse for deceptiveness.  Disclosures are more conspicuous if placed near the claim they are qualifying.  Advertisers should avoid requiring consumers to scroll and/or zoom in to view a disclosure, even on tablets or smartphones.  If scrolling is necessary, however, the disclosure ideally should be unavoidable (i.e., the consumer must take an affirmative step before proceeding further through a website).  Providing websites optimized for viewing on mobile devices may alleviate the need to scroll for a disclosure.

–          Account for consumers’ possible software & hardware settings.  Advertisers should consider whether consumers will have the proper technology to view a disclosure.  For example, a pop-up blocker may thwart an attempt to use pop-ups to disclose necessary qualifying information.  Similarly, consumers may not have the required software, version of software, or plug-in (e.g., Adobe Flash Player) essential to display disclosures on mobile devices.

–          Space-constrained ads are not immune.  Given the exponential rise in advertising on social media platforms since 2000, it is not surprising the FTC added particular language to the revised .com-Disclosures to clarify how it will view disclosures in such a context.  Simply put, no matter how brief the advertising claim, if it requires a disclosure to avoid deceptiveness the disclosure must be effective.  The .com-Disclosures go into some detail:  (1) suggesting that disclosures be in every ad—for instance, an introductory tweet containing a disclosure may not shield later tweets making deceptive claims, even if the tweets are made in rapid succession; (2) cautioning against using short abbreviations like #ad or #spon to indicate that a message is an advertisement or a sponsored claim; and (3) even proposing that advertisers be cognizant of how their disclosures will appear if a claim is republished by others (hinting, perhaps, at retweets or sharing Facebook® posts).

 

Marketers should consider updating their social media policies to reflect the teachings in these updated guidelines, as well as other FTC guidance documents, and continue monitoring the adequacy of their disclosures.  Consider circulating periodic reminders, with representative examples and possible pitfalls, to employees and clients.

RESEARCH REFERENCES

The .com-Disclosures

The .com-Disclosures are available here.

Decisions/Commentary

To view decisions and commentary on the FTC’s disclosure document, try the following query, in either a WestlawNext global search or in our News content:

Query: “dot com” #.com /3 disclosure guid! & F.T.C. “federal trade commission”

Jurisdiction:  All Federal

Sort by date to view the most recent results.

Also, from this query’s results, click the link for  Administrative Decisions & Guidance.  I call to your attention FTC Commissioner Julie Brill’s statement made before the Association of National Advertisers on March 20, 2013 (2013 WL 1187673).  She talks of the recent revisions to the .com Disclosures and admonishes:

If a particular platform does not provide an opportunity to make clear and conspicuous disclosures, that platform should not be used to disseminate advertisements that require such disclosures.

Id. (emphasis added).

 Guidelines in the CFR

The .com-Disclosures references advertising guidance that can be found on everything from jewelry to home insulation.  For the endorsement guidelines see,   16 C.F.R. §§ 255.0 et. seq.