Congressional Hearing Focused on Data Broker Collection of Sensitive Data, Including Data from Children

FTC Revises .com Disclosures

Published On March 28, 2013 | By ZwillGen | General
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Last week, the FTC released the long awaited update to its .com Disclosures, “.com Disclosures: How to Make Effective Disclosures in Digital Advertising.”  The FTC’s advice appears to be simple: “deception is unlawful no matter what the medium.”  However, when applying this principle in a constantly changing online context, the apparent simplicity is deceiving.

The FTC’s guidance stresses that while technology has dramatically changed over the course of the last 13 years, the overarching principals behind the FTC’s original guidelines remain the same:

(1)    Advertising must be truthful and not misleading.

(2)    Advertisers must have evidence to substantiate their claims; and

(3)    Advertisements cannot be unfair to consumers.

At the same time, the FTC provides practical advice regarding how these principals apply in an ever-expanding universe of technological advancement.  Specifically, the FTC discusses how qualifying information related to advertisements should be disclosed so as to prevent commercial claims from misleading consumers.

First, the FTC recommends that where practical, advertisers should incorporate relevant limitations and qualifying information into the underlying claim, rather than having a separate disclosure qualifying the claim.

Second, where a separate disclosure is in fact necessary, the FTC stresses that it should be clear and conspicuous, meaning that the required disclosure should:

  • Be placed as close as possible to the relevant claim, written in plain language, and prominently displayed when considered in relation to webpage as a whole;
  • Take into account the various devices and platforms consumers may use to view the advertising and ensure that any necessary disclosures are viewable in any medium.  By optimizing a site for mobile devices, advertisers may be able to eliminate the need for horizontal scrolling, which the FTC considers problematic because consumers very rarely scroll from side to side as well as vertically.
  • NOT be made through use of pop-ups that may be blocked by consumer browser settings, and if an interstitial is used, the FTC encourages requiring consumers to take an affirmative action to close the window, so that it is clear that they viewed the disclosure;
  • If an advertisement is space-constrained, for example if it is presented through social media or twitter, advertisers should still seek to include disclosures, especially if the disclosure is related to cost of the product or health and safety concerns.  Further, advertisers should make an effort to ensure that any republication of their ads will contain the necessary disclosure.
  • While discouraged, if necessary, it may be acceptable to make the disclosure through hyperlinks.  However, the FTC recommends that hyperlinks should be:
    • Obvious (e.g., displayed in a different color than standard text and underscored) ;
    • Labeled appropriately to convey the importance, nature and relevance of the information to which they lead (e.g., the FTC states that links that simply say “disclaimer,” “more information,” “details,” “terms and conditions,” or “fine print” are insufficient ;
    • Consistent with other hyperlinks on the page so consumers can easily identify them as hyperlinks and compatible with all platforms;
    • Placed as close as possible to the relevant text in the advertisement;
    • Designed to take the consumer directly to the disclosure, rather than to the top of a page containing the disclosure;
    • Assessed regularly by advertisers to ensure that click-through rates demonstrate that consumers are viewing the necessary disclosure.
    • Be “above the fold” so that consumers do not have to scroll to view it.  If scrolling is unavoidable, the FTC encourages the use of text or visual cues to lead consumers to the disclosure.
    • Be displayed before a consumer can “place the item in their shopping cart.”  Accordingly, advertisers cannot rely only on the order screen to provide necessary disclosures.  Additionally, if a product can be purchased within an interactive ad, all required disclosures must be included within that ad.
    • Repeated on lengthy websites or where necessary to ensure that a consumer is forced to view the disclosure within the screen flow.
    • Presented in the ad itself if the product advertised can be purchased from a brick and mortar store as well as online.
    • Not be relegated to the Terms of Use.

Third, the FTC urges advertisers, when determining whether their disclosure is “clear and conspicuous” to:

  • Consider empirical research regarding what portions of the screen the consumers will view; and
  • Recognize and account for any technological limitations that may conceal the disclosure.

Fourth, the FTC notes that where an advertisement cannot be presented on a particular platform in such a way as to provide a clear and conspicuous disclosure, t should simply not be disseminated to users of that platform.