Monday, March 18, 2013

FTC Updates Rules for Internet and Mobile Advertising

Does your company advertise online or on mobile devices?  Do you promote your company on Twitter  and Facebook?  If so, you should take note that the Federal Trade Commission last week updated its guidelines for digital advertising.  Titled: ".com Disclosures: How to make Effective Disclosures in Digital Advertising," the new guidelines reflect changes in digital advertising practices since the FTC issued the last set of guidelines in 2000.

The new guidelines consist of 28 pages of guidance and an Appendix of 22 mock ads illustrating the points from the guidelines.  Four key points emerge:

  • Consumer protection laws apply to online and mobile advertising just as they do to print, radio and TV advertising.  Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices in advertising, is the touchstone here.
  • It has always been the law that, if disclosure of information is needed to prevent an ad claim from being deceptive or unfair, the disclosure has to be clear and conspicuous.  The new guidance from the FTC affirms that the disclosures must be clear and conspicuous on all devices and platforms on which consumers may view the ads.  This means that if an ad would be deceptive without a disclosure, and the disclosure cannot be made conspicuously on a particular device or platform, then the ad should not run on that device or platform.
  • The FTC now feels that disclosures should be "as close as possible" to the relevant claim.  Hyperlinks for disclosures involving key categories of information, such as pricing or health and safety information, are discouraged, and in any event should be labeled as specifically as possible.
  • The FTC acknowledges that space constraints can be a challenge to advertisers on certain devices and platforms.  But companies still have to make the necessary disclosures clearly and conspicuously.  The use of pop-ups is not a good idea, because there are so many technologies that block pop-ups.
The new FTC guidelines close with some food for thought:  instead of spending time on making disclosures meaningful and conspicuous, perhaps advertisers should rewrite the ads so the disclosures are not needed at all.

Other helpful advertising guidance for small businesses:

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