FTC Staff Updates Advertising Disclosure Guidelines

On March 12, 2013, the Federal Trade Commission released guidance that updates its 2000 guidance for online advertising disclosures entitled “Dot Com Disclosures.”  The new guidance accounts for new developments in the digital marketplace, including advertising on social media, the use of voiceovers and video, as well as disclosures presented through hardware with smaller screens such as tablets and mobile phones.

As always, the guidance is directed at all industries that advertise through online media and offers advice businesses should consider when developing digital ads, including:

• The same consumer protection laws that apply to commercial activities in other media also apply online, including in mobile marketplaces;
• Where practical, advertisers should incorporate relevant limitations and qualifying information into the underlying claim;
• Disclosures required by law must be presented in a clear and conspicuous manner;
• If an advertisement requires a specific disclosure, and it is not possible to present that disclosure in a clear and conspicuous manner online or through a mobile phone or tablet, then the advertisement should not be disseminated to the public.
• Clearly and conspicuously display the full cost of a product’s, including any additional fees, before a consumer incurs a financial obligation and before the consumer has made the decision to buy (e.g., before the consumer clicks on an “order now” or similar purchase or application button);
• Optimize advertisements to be clearly and conspicuously displayed across multiple types of hardware devices;
• With respect to displaying complicated or lengthy advertisement disclosures, use text such as “see below for important information on . . .” to prompt potential customers to scroll for all of a product’s key terms and conditions.
• Hyperlinks that explain details about additional fees that may be too complex to describe adjacent to a price claim should be clearly labeled to communicate the specific nature of the information it contains, and appear adjacent to the advertised price;
• Institute best practices to ensure key disclosures are reproduced if an advertiser’s ad is republished by a third party;
• Require consumers to affirmatively acknowledge negative options, such as by clicking on an authorization box which has not been preselected, to confirm the purchase of products or services that are different from the main product or service being sold (Note: negative options are regulated by the Restore Online Shoppers’ Confidence Act and sale of add-on products).

The new guidance also contains 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.

Always keep in mind that the need for a disclosure may oftentimes be an indication that the underlying representation may possess a deceptive element.  Consult with an experienced advertising law attorney.

Learn more about these guidelines at the FTC.gov website.

Richard B. Newman is an Advertising and Marketing Law Attorney at Hinch Newman LLP.  He can be reached at (212) 486-9494 or via email at rnewman@hinchnewman.com.

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.