FTC Considers Applying Online Disclosure Guidelines to Emerging Digital, Mobile Platforms5 Jun, 2012 By: Linda A. Goldstein
The Federal Trade Commission (FTC) hosted a full-day public workshop on May 30 to consider whether its current guidelines for disclosures in online advertising, known as the Dot-Com Disclosures, need to be modified or revised in light of the technological advances in digital, social and mobile media that have occurred since they were first issued in 2000.
Marketers who have begun to market through the use of mobile and social media have likely encountered the challenges that these platforms present when trying to make clear and conspicuous disclosures that comply with the existing guidelines. For example, the current guides generally require that material terms and conditions of an offer be presented in close proximity to and on the same page as the triggering claims, that the disclosures be “unavoidable” and that certain material information, including in particular health and safety information, cannot be made through the use of hyperlinks. They also require that hyperlinks when used be properly labeled to indicate the nature of the disclosures contained therein and that consumers who click on the hyperlink be taken immediately to the relevant disclosures.
Given the limited real estate available on social and mobile media platforms – 140 and 160 characters respectively – it is virtually impossible to disclose all material information that may be applicable to a particular offer in close proximity to, and on the same page as the offer itself. In addition, given that most content is now viewed on multiple platforms, with different infrastructures and operating systems, a one-size-fits-all approach to disclosures is simply not practical.
While the FTC did not provide any specific guidance or recommendations during the course of the workshop, but served primarily as facilitators and moderators of the various panel discussions, a number of key themes did emerge.
First, industry participants on the various panels uniformly advocated in favor of greater flexibility in the guidelines regarding how and where disclosures need to be made. Those representing the marketing community argued that without greater flexibility on the part of the FTC and a recognition that it will not always be possible to make disclosures on the same page as the offer, marketers may be functionally precluded from utilizing certain media platforms, including Twitter and mobile. Consumer protection advocates and state attorneys general representatives responded by suggesting that marketers limit their disclosure obligations by limiting the claims that they make and further cautioned that if the offer is simply too complicated to properly explain in 140 or 160 characters or less, perhaps the offer simply shouldn’t be presented on those platforms.
Secondly, free trial and negative option offers were prominently featured among the hypothetical examples utilized by the FTC staff. These hypotheticals were used to make the point that with negative option marketing, there is a heightened requirement to disclose all of the material terms and conditions. In addition, through the use of these hypotheticals, FTC staff strongly suggested that not only must disclosure of the full terms of the negative option offer appear immediately adjacent to where the consumer indicates consent, but further suggested that a check box or some equivalent evidence of consent would be required.
Third, strong emphasis was placed on prioritizing disclosures and presenting them in a hierarchical fashion. While the panelists uniformly acknowledged that it is not possible to present all material terms and conditions in the main text of an offer, it was strongly recommended that marketers identify and present those disclosures that are likely to be most material to consumers at the top of any disclosure statement utilized.
The FTC staff indicated that it would likely publish revised proposed guidelines for comment in fall 2012. In the interim, however, marketers should assume that the FTC will expect marketers to comply with the current disclosure guidelines, even on new media platforms.
Linda Goldstein is chair of the Advertising, Marketing and Media division of Manatt, Phelps & Phillips LLP, based in the firm’s New York office. She can be reached at (212) 790-4544 or [email protected].