FTC Updates Guidance on Online Advertising Disclosures

On March 12, 2013, the Federal Trade Commission issued revised guidance for online advertisers on how to make "clear and conspicuous" disclosures to ensure that an online advertisement is truthful and not misleading. The guidance, .com Disclosures: How to Make Effective Disclosures in Digital Advertising, comes nearly 13 years after the FTC issued Dot Com Disclosures. It directly addresses what mobile and online advertisers need to consider when they communicate with consumers in the ever-changing digital age, including in connection with mobile devices with small screens and social media platforms.

The FTC guidelines emphasize that "deception is unlawful no matter what the medium." Mobile devices and social media present special challenges for advertisers. While there is nothing new about the FTC's guidance that disclosures must be "clear and conspicuous," new issues have arisen as to what that means in the online mobile device world. The guidelines state that online advertisers should place the disclosure "as close as possible" to the claim it qualifies. If space-constrained ads, such as a banner or tweet, require a disclosure, the disclosure should be incorporated into the ad whenever possible. Online advertisers should avoid using pop-ups to include any disclosures because they are often blocked.

If a particular device or platform does not make it possible to make a required disclosure clear and conspicuous, that device or platform should not be used to disseminate advertisements that require such disclosures. Disclosures should be displayed before a consumer can proceed with a transaction, and they may need to be repeated.

The guidelines also address how disclosures should be displayed if used in a hyperlink or require the consumer to "scroll" through a screen or webpage. If hyperlinks are used to lead to a disclosure, the hyperlink should be labeled appropriately "to convey the importance, nature, and relevance of the information it leads to" and take consumers directly to the disclosure on the click-through page, among other requirements such as being placed as close as possible to the claim that it qualifies. "Scrolling" is not preferred, and if "scrolling" is necessary to view a disclosure, the advertiser must use cues to encourage the consumer to scroll.

The ultimate test as to whether an ad is deceptive remains the same, and advertisers are responsible for ensuring that their message is truthful and not misleading. As to disclosures, the advertiser is responsible for ensuring that the information intended to be disclosed is actually conveyed to consumers. The new guidelines state that mobile and online advertisers should be aware of where consumers do and do not look on a screen, consumer uses of hyperlinks, and consumer habits and uses of the mobile device, online, or social platform containing the ad.

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Susan M. Kayser

Co-Leaders: Trademarks, Unfair Competition & Copyrights Subpractice

John G. Froemming

Meredith M. Wilkes

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