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Legal Update

Disclosures in 140 Characters or Less: New FTC Guidance on Online Advertising Disclosures Target Social Media and Internet Advertisers

19 March 2013
Mayer Brown Legal Update

The US Federal Trade Commission recently updated its guidance on online disclosures—Dot Com Disclosures: How to Make Effective Disclosures in Digital Advertising (the 2013 Dot Com Disclosures).1 In the guidance, the FTC re-emphasizes that its jurisdiction and requirements apply equally to advertisements appearing online, on mobile devices, in social media and in the mobile marketplace. The FTC likely will demand strict adherence to these policies. As FTC Commissioner Julie Brill recently admonished, if the type of media chosen cannot provide appropriate disclosures to protect the consumer, then the advertiser should not “do it at all.”2

The new guidance, issued on March 12, 2013, recognizes the changes in cyberspace that have occurred in the 12 years since the guidance was issued. Advertisers now regularly use Twitter, Facebook and other social media sites to hawk their products, and the ubiquity of small-screened smart phones provide space challenges for placement of advertising disclosures.

Same Rules Apply. The 2013 Dot Com Disclosures start with the premise, as noted above, that online and social media advertisers must abide by the same consumer protection laws as traditional media advertisers. Moreover, where practical, advertisers should incorporate any relevant limitations and disclosures into the advertisement itself, rather than in a separate disclosure. And, if the FTC’s guidance cannot be followed, then the advertiser either needs to modify its claims or not disseminate the ad.

Clear and Conspicuous Disclosures. If a disclosure is required, then the disclosure must be “clear and conspicuous.”3 A clear and conspicuous disclosure should be unavoidable and prominent and placed as close to the relevant claim as possible. Disclosures should be repeated if necessary, with the goal being that an advertiser has done all it can to ensure that the consumer is aware of the disclosure prior to purchase. Disclosures should be clear and easy to understand by the intended audience, and a consumer should not have to scroll through the ad to find the disclosure. A disclosure should not be made in a blockable pop-up window.

Use of Hyperlinks. Use of hyperlinks for disclosures should be avoided, but if a hyperlink is necessary, the hyperlink should be marked clearly. The FTC recommends that any hyperlinks are obvious and properly labeled “to convey the importance, nature, and relevance of the information to which it leads.”4 Advertisers also must be aware of whether the hyperlink will function properly on all technologies (computers, laptops, smart phones, etc.). Hyperlinks should be close to the relevant claim; and it should be easy for consumers to obtain the relevant information Advertisers are on the hook for knowing whether hyperlinked disclosures are being used; if not, then advertisers should use an alternative method of disclosure. Required disclosures regarding any serious health and public safety issues or regarding the products cannot be made via hyperlink: such disclosures are required to be part of the advertisement itself.

Squeezing in Disclosures. Importantly, the 2013 Dot Com Disclosures does not exempt from the disclosure requirements advertisements made in space-constrained social media or on space-constrained devices. Where it is not possible to include necessary limitations in the ad itself, the FTC recommends “creativity”5 to incorporate the required information. Advertisers also need to be mindful of republication: an ad or claim that can be republished must include the original disclosure in the republication.

In remarks before the Direct Marketing Association, timed for the day the 2013 Dot Com Disclosures were announced, Commissioner Julie Brill made clear that the FTC will pursue advertisers who fail to abide by its guidance. As Commissioner Brill promised: “There is a cop on the beat, and we are there to help ensure that consumers can safely enjoy the online and mobile space.”6

If you have any questions about the FTC’s new disclosures or advertising in social media, please contact  in our Washington, DC office, or or in our Los Angeles office.


Footnotes:
1 Available at http://www.ftc.gov/os/2000/05/0005dotcomstaffreport.pdf.
2 Julie Brill, Commissioner, Fed. Trade Comm’n, The Perfect Gift, Keynote Address before the Direct Marketing Association (Mar. 12, 2013), available at http://www.ftc.gov/speeches/brill/130312brilldma.pdf.
3 Dot Com Disclosures: How to Make Effective Disclosures in Digital Advertising, Fed. Trade Comm’n, Mar. 12, 2013, at 6, available at http://www.ftc.gov/os/2013/03/130312dotcomdisclosures.pdf.
4 2013 Dot Com Disclosures, at 11
.
5 2013 Dot Com Disclosures, at 16.
6 Brill Keynote Address.

Authors

  • Meytal McCoy
    T +1 202 263 3898
  • John Nadolenco
    T +1 213 229 5173

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