The Federal Trade Commission enforces consumer protection laws to ensure that products and services are described truthfully online, free of deception and unfair practices as prohibited by the FCT Act. The general principles of advertising and marketing law apply online, but new issues arise almost as fast as technology develops, including issues surrounding space constrained screens and social media platforms.
The Doc Com Disclosure Guidance describes the information businesses should consider as they develop ads for online media to ensure that they comply with the law. It only addresses disclosures required pursuant to laws that the FTC enforces. It does not address disclosures that may be required pursuant to local, state or other federal laws or regulations.
Information Advertisers Should Consider
- Relevant limitation and qualifying information should be incorporated into the underlying claim, rather than having a separate disclosure qualifying claims;
- Disclosures should be clear, conspicuous, prominent and be placed in close proximity to the triggering claim;
- Audio disclosures should be presented in an adequate volume and cadence, and be presented for a sufficient duration;
- If an ad is viewable on a particular device or platform, any necessary disclosures should be sufficient to prevent the ad from being misleading when viewed on that device or platform;
- When a space-constrained ad requires a disclosure, incorporate the disclosure into the ad whenever possible – if it is not possible to make a disclosure in a space-constrained ad, it may, under some circumstances, be acceptable to make the disclosure clearly and conspicuously on the page to which the ad links;
- When using a hyperlink to lead to a disclosure, make the link obvious, place it as close as possible to the relevant information it qualifies, and label it appropriately to convey the importance, nature and relevance of the information it leads to;
- Preferably, design advertisements so that scrolling is not necessary in order to find a disclosure;
Rules and Guides That Apply to Online Advertising
Many rules and guides address claims about products or services, or advertising in general, and apply to online advertising, as well as to other media. The following rules and guides are included in this category:
- Guides for the Nursery Industry (16 C.F.R. Part 18);
- Guides for the Rebuilt, Reconditioned and Other Used Automobile Parts Industry (16 C.F.R. Part 20);
- Guides for the Jewelry, Precious Metals, and Pewter Industries (16 C.F.R. Part 23);
- Guides for Select Leather and Imitation Leather Products (16 C.F.R. Part 24);
- Guides Against Deceptive Pricing (16 C.F.R. Part 233);
- Guides Against Bait Advertising (16 C.F.R. Part 238);
- Guides for the Advertising of Warranties and Guarantees (16 C.F.R. Part 239);
- Guide Concerning Use of the Word “Free” and Similar Representations (16 C.F.R. Part 251);
- Guides for Private Vocational and Distance Education Schools (16 C.F.R. Part 254);
- Guides Concerning Use of Endorsements and Testimonials in Advertising (16 C.F.R. Part 255);
- Guides Concerning Fuel Economy Advertising for New Automobiles (16 C.F.R. Part 259);
- Guides for the Use of Environmental Marketing Claims (16 C.F.R. Part 260);
- Rules and Regulations Under the Wool Products Labeling Act of 1939 (16 C.F.R. Part 300);
- Rules and Regulations Under Fur Products Labeling Act (16 C.F.R. Part 301);
- Rules and Regulations Under the Textile Fiber Products Identification Act (16 C.F.R. Part 303);
- Energy and Water Use Labeling for Consumer Products under the Energy Policy and Conservation Act (“Energy Labeling Rule”) (16 C.F.R. Part 305);
- Contacts Lens Rule (16 C.F.R. Part 315);
- Prohibition of Energy Market Manipulation Rule (16 C.F.R. Part 317);
- Deceptive Advertising as to Sizes of Viewable Pictures Shown by Television Receiving Sets (16 C.F.R. Part 410);
- Retail Food Store Advertising and Marketing Practices (16 C.F.R. Part 424);
- Use of Prenotification Negative Option Plans (16 C.F.R. Part 425);
- Power Output Claims for Amplifiers Utilized in Home Entertainment Products (16 C.F.R. Part 432);
- Preservation of Consumers’ Claims and Defenses (16 C.F.R. Part 433);
- Mail or Telephone Order Merchandise (16 C.F.R. Part 435);
- Disclosure Requirements and Prohibitions Concerning Franchising (16 C.F.R. Part 436);
- Business Opportunity Rule (16 C.F.R. Part 437);
- Credit Practices (16 C.F.R. Part 444);
- Used Motor Vehicle Trade Regulation Rule (16 C.F.R. Part 455);
- Labeling and Advertising of Home Insulation (16 C.F.R. Part 460);
- Interpretations of Magnuson-Moss Warranty Act (16 C.F.R. Part 700);
- Disclosure of Written Consumer Product Warranty Terms and Conditions (16 C.F.R. Part 701);
- Pre-Sale Availability of Written Warranty Terms (16 C.F.R. Part 702); and
- Informal Dispute Settlement Procedures (16 C.F.R. Part 703).
Tip #1: Clear and Conspicuous Disclosures in Online Advertisements
Advertisers are responsible for ensuring that all express and implied claims that an ad conveys to reasonable consumers are truthful and substantiated. The focus should be on individual phrases or statements, as well as the advertisement as a whole – including the text, product name and depictions.
If an advertisement makes express or implied claims that are likely to be misleading without certain qualifying information, the information must be disclosed. A disclosure can only qualify or limit a claim to avoid a misleading impression. It cannot cure a false claim. If a disclosure provides information that contradicts a material claim, the disclosure will not be sufficient to prevent the ad from being deceptive.
Disclosures that are required to prevent an advertisement from being deceptive, unfair or otherwise violative of an FTC rule, must be presented “clearly and conspicuously.” Whether a disclosure meets this standard is measured by how consumers actually perceive and understand the disclosure within the context of the entire ad. The key is the overall net impression of the ad upon reasonable consumers — whether the claims consumers take from the ad are truthful and substantiated.
Disclosures should be placed as close as possible to the claim they qualify. Advertisers should keep in mind that having to scroll increases the risk that consumers will miss a disclosure. Draw attention to disclosure.
To evaluate whether a particular disclosure is clear and conspicuous, consider:
- The placement of the disclosure in the advertisement and its proximity to the claim it is qualifying;
- The prominence of the disclosure. The size, color and graphics of the disclosure affect its prominence;
- Whether the disclosure is unavoidable;
- The extent to which items in other parts of the advertisement might distract attention from the disclosure;
- Whether the disclosure needs to be repeated several times in order to be effectively communicated, or because consumers may enter the site at different locations or travel through the site on paths that cause them to miss the disclosure;
- Whether disclosures in audio messages are presented in an adequate volume and cadence and visual disclosures appear for a sufficient duration; and
- Whether the language of the disclosure is understandable to the intended audience.
- A disclosure is more effective if it is placed near the claim it qualifies or other relevant information;
- Disclosures that are an integral part of a claim or inseparable from it should not be communicated through a hyperlink;
- When hyperlinking ensure that hyperlinks are properly labeled and noticeable;
Tip #2: Consider Different Display Options
Advertisers should consider different display options to ensure that qualifying information is displayed clearly and conspicuously. Evaluating the prominence of the disclosure in relation to the rest of the ad, as it may appear on various devices, helps ensure that consumers are able to view the disclosure.
Always account for viewing on different devices. Most webpages viewable on desktop devices may also be viewable on smartphones. Therefore, unless a website defaults to a mobile-optimized (or similarly responsive) version, advertisers should design the website so that any necessary disclosures are clear and conspicuous, regardless of the device on which they are displayed.
If a disclosure is too small to read on a mobile device and the text of the disclosure cannot be enlarged, it is not a clear and conspicuous disclosure. If a disclosure is presented in a long line of text that does not wrap around and fit on a screen, it is unlikely to be adequate. Do not bury it. The prominence of the disclosure also may be affected by other factors.
Tip #3: Avoid Distracting Features in Advertisements
It is important to consider the entire advertisement. Elements like graphics, sound, text, links that lead to other screens or sites or “add to cart” buttons may result in consumers not noticing, reading, or listening to the disclosure.
Do not let other parts of an advertisement get in the way. Sometimes it may be necessary to disclose information more than once to convey a non-deceptive message. Repeating a disclosure makes it more likely that a consumer will notice and understand it, and will also increase the likelihood that it will be seen by consumers who may be entering the website at different points.
Tip #4: Multimedia Campaigns Count
Online ads may contain or consist of audio messages, videos, animated segments or augmented reality experiences with claims that require qualification. The disclosure should accompany the claim. In evaluating whether disclosures in these multimedia portions of online ads are clear and conspicuous, advertisers should evaluate all FTC guidance, including, but not limited to:
- For audio claims, audio disclosures should be in a volume and cadence sufficient for a reasonable consumer to hear and understand it;
- Disclosures triggered by a claim or other information in an ad’s written text should be made in writing, and not be placed solely in an audio or video clip;
- Display visual disclosures for a sufficient duration;
- Use clear language and syntax and avoid legalese or technical jargon;
Tip #5: Consumer Protection is Key
The FTC continues to enforce its consumer protection laws to ensure that products and services are described truthfully online. The agency also continues to evaluate online advertising, using traditional criteria, while recognizing the challenges that may be presented by future innovation. Advertisers should consult with experienced experience FTC compliance and defense counsel when developing online ads and ensuring compliance with the law.
- 1 Information Advertisers Should Consider
- 2 Rules and Guides That Apply to Online Advertising
- 3 Tip #1: Clear and Conspicuous Disclosures in Online Advertisements
- 4 Tip #2: Consider Different Display Options
- 5 Tip #3: Avoid Distracting Features in Advertisements
- 6 Tip #4: Multimedia Campaigns Count
- 7 Tip #5: Consumer Protection is Key