Federal Trade Commission DotCom Disclosures

The Federal Trade Commission (“FTC”), a government body tasked with “preventing business practices that are anticompetitive or deceptive or unfair to consumers and enhancing informed consumer choice and public understanding of the competitive process,” released DotCom Disclosures – a guidance document “for mobile and other online advertisers that explains how to make disclosures clear and conspicuous to avoid deception.” (FTC).

History: In May 2000, the Federal Trade Commission (“FTC”) first issued DotCom Disclosures, which was subtitled “Information About Online Advertising, and which examined “how the FTC’s consumer protection statutes, rules, and guides apply to online advertising and sales and discussed FTC requirements that disclosures be presented clearly and conspicuously, in the context of online advertising.” (FTC).

The overarching message of the original DotCom Disclosures was that the FTC's traditional views about disclosures were the same regardless of whether the medium was print, television, radio, or the internet. As such, an advertiser must make sure that (1) all relevant information is disclosed, and (2) all disclosures are clear and conspicuous. (FTC).

In the original guidance, the FTC focused on disclosures that appeared on separate pages or that were available only via hyperlink. The agency urged advertisers to:

- Place disclosures near the claims they related to, ideally on the same screen;

- Ensure that disclosures are easily seen and not buried in distractions, given that consumers do not read every word of ads;

- Use a hyperlink only if the disclosure is lengthy or needs to be repeated in several places, make the link obvious, and label it appropriately;

- Signal to consumers if they need to scroll down a page to see a disclosure; and

- Make all necessary disclosures to consumers before they commit to making a purchase. (FTC).

In March 2013, the FTC issued the first revision of its DotCom Disclosures since that guide's original publication in May 2000. Beginning in May 2011, “FTC staff began seeking input to modify and update the guidance document to reflect the dramatic changes in the online world in the preceding eleven years. After three public comment periods and a public workshop, this revised staff guidance document [subtitled “How to Make Effective Disclosures in Digital Advertising] was issued in March 2013.” (FTC).

Revised DotCom Disclosures

The FTC’s revision to its existing DotCom guidelines, while not surprising in terms of content, “recognized that although the underlying message of the DotCom Disclosures remained valid, the rules themselves needed an update to reflect technological innovation, including the facts that many consumers now access the internet on mobile devices; use software to block pop-up ads; and view advertising mixed with posts from friends on social media sites such as Facebook, Twitter, and Pinterest.” (BNA).

For advertisers preparing an online or social media campaign, the key takeaways from the new DotCom Disclosures include (BNA):

- When practical, advertisers should try to include “relevant limitations and qualifying information” within the claim itself, rather than in a separate disclosure.

- Disclosures are required to be “clear and conspicuous” no matter what the format or what space constraints exist.

- Advertisers need to consider how their ad will display on the full range of devices and platforms on which people may view it. If your disclosures are clear and conspicuous when your ad appears on a computer or tablet, but disappear on a smartphone screen, then you will need to revise your ad.

- Consumers who zoom in to read text on a smartphone may concentrate on the center of the screen and miss those disclosures at the edges. Ideally, a website optimized for mobile devices should not require left- or right-scrolling.

- Advertisers need to monitor the effectiveness of their hyperlinks, including click-through data and time spent on the disclosure screen. The FTC expects that if data show consumers are not following hyperlinks or reading disclosures, the advertiser will find another method to convey the necessary information.

- If consumers must scroll to see a disclosure, then ideally, the disclosure should be “unavoidable”—that is, the consumer can't continue to the next screen until she scrolls.

- Hyperlink disclosures may be acceptable in some circumstances, but simple disclosures should never be behind a hyperlink, nor should cost, safety, or health information.

- Hyperlink labels should “convey the importance, nature, and relevance of the information” to which the hyperlink leads. It is not enough for the hyperlink to say “Disclaimer” or “Terms and Conditions.”

-  Hyperlink styles should be consistent.

- Hyperlinks should be placed as closely as possible to the text they modify.

- The hyperlink should take the consumer directly to the disclosure.

- Pop-ups that can be blocked by pop-up blocking software should not be used for disclosures.

- Methods of disclosure that cannot be viewed on certain mobile devices, such as disclosures using pop-ups or Adobe Flash Player, should not be used for ads that will be seen on those devices.

- If the product being advertised is available from sources other than direct purchase from the advertiser (for instance, at brick-and-mortar stores or other websites), then disclosure must be made before consumers go to the store or website to make a purchase.

The new .com Disclosures also offers specific guidance for social media. For instance:

- When a paid endorser posts an endorsement on Twitter, the post must disclose that it is an advertisement.

- “#Ad” or “#Sponsored” are acceptable disclosures.

“#SPON” is not an acceptable disclosure because the FTC does not believe that consumers necessarily understand it to mean that the post is an ad.

- The indication that the post is an ad should appear at the beginning of the post.

-  Each social media ad stands alone. You cannot make a disclosure in one of a series of tweets and assume that consumers will understand the disclosure to apply to the entire series.

-  In some circumstances, a tweet may direct or hyperlink consumers to a website for more information (for instance, if the tweet does not mention the product name, or if the product or special offer being touted is available only through the advertiser's website). The website linked to must prominently feature the full disclosure.