Federal Trade Commission issues new “.com Disclosures” guidance for online advertising

On March 13, 2013,  the FTC updated its “.com Disclosures” guidance document for online disclosures to address new issues resulting from the expanding use of smartphones and other mobile devices for advertising purposes.

Originally published in 2000, the FTC guide addresses how companies who are engaged in online advertising should provide the various disclosures that are required by the laws that the FTC enforces. These disclosures include those required to prevent a claim that a particular advertisement is misleading or deceptive.   Examples include:

  • disclosures of certain warranty terms;
  • disclosures of energy information on certain home heating and cooling equipment under the Energy Labeling Rule; and
  • disclosures relating to non-independent endorsements.

The original guide encouraged advertisers to avoid using hyperlinks for disclosures that involve product cost or certain health and safety issues

The new guide recognizes the space constraints associated with mobile devices, and it acknowledges that hyperlinks may be the best option in such situations.  The new guide explains that a hyperlink that leads to a required disclosure should:

  • be obvious;
  • be labeled to convey the importance, nature and relevance of the linked information;
  • be used in a consistent manner;
  • be placed as close as possible to the information that it qualifies;
  • take consumers directly to the disclaimer; and
  • be monitored for appropriate adjustments based on consumer click-through rates.

In every situation, the new guide repeats the original guide’s mantra that online disclosures be “clear and conspicuous.” For example, a link should not merely be placed alongside an ad.  Rather, it should be labeled in a way that the consumer understands its relevance.

As an example, the guide explains that the following ad sent via Twitter:

Twitter 1

may be misleading because it does not disclose that the tweet comes from a paid celebrity endorser, and because it does not disclose whether the listed weight loss is typical. Although the hyperlink leads to the disclaimer, the hyperlink is not labeled, and its relevance is not explained.

The guide explains that these issues may be addressed without a hyperlink with only a few additional characters, as follows:

Twitter 2

In this ad, the initial four characters “Ad:”  disclose that the tweet originates from a paid endorser. In addition, the typical weight loss results are disclosed without any hyperlink at all.

The new guide contains many other examples involving tweets, social media sites and mobile apps.

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