FTC Finally Updates Its “.com Disclosures” – Welcome to the Small Screen

Written by Amy Malone

After rounds of comments and public workshops, the FTC has finally released an update to its digital advertising disclosure guidelines (here).  The FTC first released guidance on digital advertising in 2000 (see those guidelines here) and last May the FTC requested comments on how the guidelines could be updated.  The FTC points out on the first page that “consumer protection laws that apply to commercial activities in other media apply online, including activities in the mobile marketplace.”

Extending the same rules across media poses issues due to the space available (compare your phone screen to your laptop screen, and you get the idea).  How can you ensure your disclosures are up to snuff?  Well, the FTC focuses on providing disclosures that meet the “clear and conspicuous” standard and provides an appendix full of examples that include pictures of mobile screens displaying both acceptable and unacceptable disclosures.  The FTC also touched upon using endorsements and testimonials in advertisement (for more information on the guidelines the FTC released in 2010 see our blog post here).

Factors to consider in ensuring your ads meet the “clear and conspicuous” standard

•  Proximity and Placement.  Disclosures are most effective when placed near the claim it qualifies.  Close proximity increases the likelihood that consumers will see the disclosure and realize it relates to the claim or product.  On a mobile device it may be difficult, if not impossible, to include the disclosure on the same screen as the product or claim.  In those cases the advertisers are encouraged to provide “text prompts” that indicate to the consumer that more information is available (e.g. “see below for important information on restocking fees” alerts the customer to scroll and look for the information).  If you decide to use a hyperlink, make sure it’s obvious that the link provides a disclosure and use language that is clear; this point harkens back to our “see below for important information on restocking fees” example which could also be used as a hyperlink.  Advertisers should steer away from using hyperlinks that contain general statements like “important information.”

•  Prominence.  It’s your responsibility to draw attention to required disclosures.  Consider size, color and graphics that will affect the disclosure’s prominence and increase the likelihood that the consumer will associate the disclosure with the claim or product.

• Distracting Factors in Ads.  The FTC warns that graphics, sound, text and links that lead to other screens may entice the consumer away from the original screen and the disclosure.  You’d be wise to ensure that whatever graphics/sounds/text you have on a page are not so flashy as to draw the consumer away before reading the disclosure.

• Repetition.  Disclosing information more than once makes it more likely that a consumer will notice and understand the disclosure, but there is a fine line between helping the consumer and annoying them to the point that they ignore the disclosure.  Repetition is probably necessary if consumers can access and/or navigate the website or application in different ways.  Placing the disclosure in multiple places will help assure that the consumer sees it.

• Multimedia Messages and Campaigns.  Ads may contain audio messages, videos or animation that require disclosures.  If providing disclosures in a multimedia platform weigh factors such as: if it’s audio is the volume sufficient for a reasonable consumer to hear and understand it?  If you are using video, are the visual disclosures appearing for duration sufficient for consumers to notice, read and understand them?   The FTC points out that fleeting online disclosures are not likely to be deemed sufficient.

• Understandable Language.  Consumers need to be able to understand the disclosure.  Use clear language and avoid technical jargon and legalese.

Over the last year, the FTC has been on a mobile rampage, releasing guidelines on mobile app development, mobile app payment issues and bringing actions against mobile app and mobile device developers (see our blog posts here, here, here, and here).  Last week, the FTC released a video with additional tips for mobile app developers. Anyone working in the mobile sphere needs to be vigilant and aware of the regulatory focus.