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Disclosures in Online Advertising

To some, the "Information Superhighway" should be called the "Advertising Superhighway." It seems impossible to surf the Internet without running across advertisements for every product imaginable. But how is advertising on the Internet controlled when access is so readily available? Are there safeguards for consumers, or can business owners advertise in cyberspace however they wish?

The following information will clear up some of these important questions about disclosures, liability, and other considerations with respect to online advertising. See FindLaw's Internet and E-Commerce and Marketing and Advertising Laws sections to learn more.

FTC Rules for Internet Advertising at a Glance

The short answer is that there are safeguards in place, with new concerns and technological developments requiring constant revision of those protections. In addition, business owners advertising on the Internet must still follow certain protocols which are in place for the more traditional forms of advertising such as radio and television commercials and print-media advertisements. In addition, the Federal Trade Commission (FTC) has made it clear that online advertisers can be held liable to consumers for deceptive or unfair trade practices that are used in Internet advertisements.

In March 2013, the FTC released updated (from 2000) guidance concerning advertising and the use of disclosures on the Internet, entitled ".com Disclosures: How to Make Effective Disclosures in Digital Advertising." Disclosures in online advertisements must be "clear and conspicuous." The FTC working paper highlights the factors that will be considered in determining whether a disclosure meets these requirements. The factors include:

  • The placement of the disclosure in the advertisement and its proximity to the relevant claim;
  • The prominence of the disclosure;
  • Whether other portions of the advertisement, such as blinking spaces or bright colors, detract attention from the disclosure;
  • Whether the advertisement is long enough that the disclosure should be repeated in more than one place in the advertisement;
  • Whether, if the advertisement uses audio messages, those messages are presented in a manner that utilizes adequate volume and cadence;
  • Whether any audio messages are accompanied by visual disclosures that appear for a sufficient duration; and
  • Whether the language of the disclosure is understandable to the intended audience.
  • Whether the disclosure is written in plain language that most consumers will understand.

The Meaning of 'Clear and Conspicuous'

The FTC has indicated that online advertisements that require the consumer to scroll down the screen to see the disclosure are not problematic on that basis alone so long as there is a "clear and conspicuous" statement directing consumers how to reach the disclosure. In situations where the text of advertisements flows over more than one Web page, the disclosure may be on the second page without the provision of any specific direction to that disclosure because, according to the FTC, it is reasonable to assume that a consumer would "follow the text" to the second page and come across the disclosure there. In other circumstances a disclosure may be allowed to be available via a link in an advertisement.

Unsolicited Online Advertisements

Additional concerns of the FTC include how to handle unsolicited advertising on the Internet. It is one thing to actively seek out websites selling a pair of tennis shoes that you want. It is quite another to be "interrupted" while surfing the Internet by an advertisement for the same product. Traditional telemarketers are governed by the FTCs Telemarketing Sales Rule, which went into effect in its present form in 1995.

Need Professional Legal Help?

In many cases, it may be enough simply to know the FTC's rules, but every business is different and legal gray areas may arise. If you have doubts about whether your company's online advertisements are compliant with all applicable laws and regulations, you may want to call a business and commercial law attorney for guidance.

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