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FTC: In Making Disclosures, Size Doesn’t Matter

20 Mar, 2013 By: Doug McPherson

WASHINGTON – Ads on social media or mobile phones must provide clear disclosures and follow the same rules newspaper and TV messages. That’s the gist of updated Dot-com Disclosure Guides the Federal Trade Commission (FTC) released last week.

FTC Commissioner Maureen Ohlhausen made the announcement and explained that new media was spurring the FTC’s decision to issue the guidelines. “The new guidelines focus on two trends – one, the movement toward advertising seen on small screens and how you make disclosures useful, clear and conspicuous to consumers; and two, the use of social media for marketing,” Ohlhausen said.

The upshot for marketers? Overall, the recommendations signal that lack of space is no excuse for failing to inform consumers about key conditions, said advertising lawyer Linda Goldstein, chair of the advertising, marketing and media division at Manatt, Phelps & Phillips. “You’re going to have to make those disclosures regardless of the format you’re advertising in,” she said.

And Jeffrey Greenbaum, an advertising lawyer with Frankfurt Kurnit Klein & Selz, said, “It’s a big warning to advertisers that they need to review their websites on a mobile device, and make sure that everything works there. It’s a very, very broad recommendation, and one that could require advertisers to make substantial changes in the way their websites work.”

So presenting hyperlinks that just say “disclaimer” or “more information” isn’t adequate, according to the guidelines.

The FTC’s update recommends marketers clearly and conspicuously disclose all terms, conditions and disclaimers to consumers – including those who access on small mobile screens. The agency adds that some companies might have to rework sites that were originally designed to be viewed on desktops.

“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,” the report states. “If a disclosure is too small to read on a mobile device and the text of the disclosure cannot be enlarged, it’s considered not to be 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.”

The FTC also specifies in the new recommendations that key terms and conditions need to be disclosed before consumers make the decision to buy – meaning before they place items in their shopping cart.

In related news, the Digital Advertising Alliance is expected to release new mobile privacy standards this week. The standards will be consistent with the DAA’s long-standing guidelines requiring members to notify consumers about online behavioral targeting, but updated with new mobile-specific rules.

According to those familiar with the final or near-final draft, the new standards will address targeting ads based on information collected across apps, and would allow consumers to opt out. The mobile rules also are likely to require companies to obtain users’ opt-in consent before collecting some information, such as address-book data.

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