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Important: FTC Updates Advertising Disclosure Guidelines

Updates to the Federal Trade Commission’s guidance document, Dot Com Disclosures, have been anticipated for almost two years.  After receiving substantial written feedback and in response to the increasing use of both social media-based marketing and smartphones with smaller screens,  the Commission has now issued updated guidelines entitled .Com Disclosures: How to Make Effective Disclosures in Digital Advertising.

The evolution of online advertising and the digital marketplace necessitated the need for the revised guidelines – aimed at overall compliance with the §5 of the FTC Act – which prohibits unfair or deceptive advertising, marketing and sales practices.  According to the Commission’s release, the updated guidelines seek to describe “the information businesses should consider as they develop ads for online media to ensure that they comply with the law.”

The guidelines also contain mock advertisements that illustrate the updated principles.  For example, FTC staff advised marketers in 2000 to consider the placement of disclosures and their proximity to the ad claims they explained or elaborated on.  The old guidelines defined “proximity” as “near, and when possible, on the same screen.”

The new advice?  Disclosures should be “as close as possible” to the relevant claim.  Another design consideration from the 2000 document was the advice to avoid buried or generically labeled hyperlinks.  It also warned against using hyperlinks for disclosures involving key categories of information, such as how much a product costs or certain health or safety information.

The updated guidelines build on that, calling on advertisers to label hyperlinks as specifically as possible.  You must also consider how hyperlinks will function across the broad range of programs and devices consumers are likely to use.

Perhaps the most important thing about the new .com Disclosures is, actually, what has not been changed.   Regardless of how or where you market, truth-in-advertising principles continue to apply to print, radio, TV, and online advertising.

Nothing really new here, either.  Well, not exactly.  It has always been the law that if the disclosure of information is necessary to prevent an online advertising claim from being deceptive or unfair, it has to be made clearly and conspicuously.  However, according to the updated guidelines, advertisers should make sure their disclosures are clear and conspicuous on all devices and platforms that consumers may use to view their ads.

In other words, if an advertisement could potentially be deceptive without a disclosure but the disclosure cannot be made clearly and conspicuously on a particular device or platform, then you should not run that advertisement on that device or platform.

One of the more interesting considerations for the Commission has been real estate limitations on various social media platforms.  The updated guidelines acknowledge this marketing challenge, although, companies will not be relieved of the obligation to ensure that all disclosures are made clearly and conspicuously.

Pop-ups are potentially problematic given that so many technologies exist for blocking them.  You will want to consult with advertising compliance counsel early on in the creative compliance process in order to assess advertising campaigns and the need for disclosures.

Something to consider – the need for a disclosure may oftentimes be an indication that the underlying representation may possess a deceptive element.  A skilled advertising law attorney will be able to assist with the design or reformulation of cleaner advertising claims that incorporate relevant limitations into the underlying representation, rather than having numerous separate disclosures qualifying the claim.

Learn more about these guidelines at the website.

Information conveyed in this article is provided for informational purposes only and does not constitute, nor should it be relied upon as legal advice. No person should act or rely on any information in this article without seeking the advice of an advertising law attorney.

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Richard B. Newman

Richard B. Newman is an Internet Lawyer at Hinch Newman LLP focusing on advertising law, Internet marketing compliance, regulatory defense and digital media matters. His practice involves conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing clients in high-profile investigative proceedings and enforcement actions brought by the Federal Trade Commission and state attorneys general throughout the country, advertising and marketing litigation, advising on email and telemarketing best practice protocol implementation, counseling on eCommerce guidelines and promotional marketing programs, and negotiating and drafting legal agreements.

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  1. Good article, and one that applies to any website operator large-and-small. A definite burden to online business that now require a full-time Compliance Director.

  2. I have come to find over the years that no matter the rules, laws or disclosures there are going to be those that just don’t read period. There are also those that just don’t have common sense, hence the reason for all of the warning labels on products, you KNOW someone at one time or another did exactly what they are warning you not to do. Your post was great and opened my eyes to a few things. Thanks for all the info!

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